Some believe that when a butterfly flaps its wings in New York, that makes it rain in Beijing. We don’t know if that’s true, but keeping a supply chain operational, let alone efficient, can certainly feel that way. Roughly speaking, supply chain costs break down into four categories:
- Inbound Supply
- Managing Inventory
- Outbound Supply/distribution
- Labor
4 Stellar Ecommerce Supply Chain Strategies
The key to an outstanding supply chain strategy is finding efficiencies in and across all four of these areas. Any one of these categories could warrant an entire post of its own (indeed, we’ve written a few of them ourselves, and could easily write a few more). In this post, we’ll focus on best practices that can increase efficiencies across all four categories.
1. Improve supply chain visibility
Supply chains today can have multiple components spanning continents, time zones, and language barriers. Managing such a multi-headed monster is a challenge, and in the face of the many other challenges of running an Ecommerce business, it can be tempting to do as rotisserie oven aficionado Ron Popeil suggests: “set it and forget it.” But tempting as this may be, this is a crucial mistake. After all, you can’t fix what you can’t see.
The need for visibility in a supply chain extends to every link in the chain. The better you understand how weather, politics, demand and countless other factors all interact to affect your customers’ needs and your ability to fill them, the more resilient your chain will become. Stay on top of every aspect of your supply chain as much as you can, and you may be able to forecast dips or surges in demand that could be ruinous for less prepared business owners.
2. Investigate Third Party Partnerships and Outsourcing Opportunities
Trying to do everything in house can seem optimal to the inexperienced (no middlemen!) but is often calamitous for the business. It’s unreasonable to expect one enterprise to be able to optimize every aspect of its supply chain. There are firms and partners who specialize in just one area, whether it be warehousing, manufacturing, or customer fulfillment, who have had years of experience learning optimization lessons the hard way. Explore partnerships with those companies who have developed expertise in these areas, and remove the pressure of having to outperform more experienced competitors across the entire chain.
Many functions that require significant outlays in time and labor can also be outsourced. These include customer centric functions such as customer support, as well as logistical concerns like manufacturing and warehousing. Determine where your skillset truly differentiates you from your competitors, and find efficient alternatives in those areas outside of your expertise.
3. Build Relationships
It can be said in any business relationship that one surprise is inevitable, two surprises is a trend, and three surprises is negligence. As the visibility of your supply chain increases, business owners may become aware of cyclical surges or dips in customer demand that require more flexibility from their partners all along the supply chain. The key to meeting these demands is clear lines of communication from supplier/partner to retailer, so surprises become opportunities rather than inconveniences.
4. Integrate Management Systems
Good supply chain management requires visibility, knowledge, forecasting, constant monitoring, and a host of other issues all integrated seamlessly across departments. This can be a logistical nightmare and a timesuck for an Ecommerce owner. Fortunately, the technology for monitoring all these issues as well as integrating them into a single coherent system is available, liberating the business owner to do what he or she does best.
Ecommerce Supply Chain Strategy Married With Great Tech
Having a strong wholesale Ecommerce supply chain strategy is a good start, but having good B2B Ecommerce capabilities to capture and process your orders as well. Zoey can help, and we’d love to talk to you about how to solve that part of the equation:
Patrick Gallagher is a financial writer with nearly a decade of experience in communications with business owners and other high-net worth individuals. He was a writer for the New York Times and worked for several nonprofits. He holds an M.B.A. from the University of Minnesota. He lives in Atlanta with his family and two very rambunctious dogs.
