ECommerce is growing at an astonishing rate. In fact, the number of online sales rose 16.3-percent annually, reports Jeffrey B. Graves of Inbound Logistics, accounting for nearly one-half of $1 trillion by 2010. Meanwhile, the number of warehouses has not yet grown enough to accommodate the surge in order fulfillment and processing. As a result, today’s shippers need to work more efficiently and productively to stay competitive and provide customers with viable solutions. Fortunately, shippers and warehouse managers who follow these best practices can improve production to meet the surging demand.
Integrate Your eCommerce System With Compliance Requirements.
The U.S. and much of the world is hypervigilant in the wake of numerous terrorist attacks, attacks of police and increased violence. It stands to reason that compliance requirements, such as the EDI 856 Advanced Shipping Notice, will continue to become more important. For example, the required information could easily expand to include details that are not mandated as of now. While you need to pull this information throughout the day, it should be an automated process. In fact, this details should be compiled and reported from within your warehouse management system (WMS), which reduces the amount of time required in processing thousands, if not tens of thousands, of orders.
1. Manage Returns Quickly and Effectively.
Returns not simply a nuance for shippers; they are critical to providing consumers with peace of mind while shopping online. As explained by Carl Marin of Advantage Business Media, large-scale online retailers, including Amazon and Wal-Mart, are serving consumers with unparalleled return options, making any possible returns easier and virtually free to consumers. Unfortunately, consumers are far less likely to complete an online purchase if return policies are non-existent or too expensive, and many consumers will simply forgo purchasing your products if it can be obtained with a returns’ guarantee from another eCommerce solution. In other words, shippers need to be prepared to take on the costs of free return shipping, assistance when printing shipping labels and processing returns as they come in.
2. Proactively Pull Orders as They Come In.
ECommerce warehouses are processing more orders than ever before. As a result, a single eCommerce warehouse may actually be responsible for processing groceries, fresh fruits and vegetables, beauty supplies, apparel and practically any other type of product. Shippers need to proactively pull orders as they come in, but the key to making this practice success is prioritizing order picking to meet the demands of the consumers. According to the following graphic, created by the Ivey Business Journal, prioritizing can be broken down by type:
3. Manage All Order Types Under One Roof.
Historically, order channels were split among different distribution centers. Orders for retail spaces came from one center. Meanwhile, orders processed online were left exclusively in another center. Yet, the separation was even more apparent as small package shippers operated almost independently of large-scale shippers using less-than-truckload (LTL) and full truckload (FT). However, the unyielding push toward cheaper products, low shipping costs and faster delivery is making it harder for shippers to operate independently of one another.
In this space, the role of using a dedicated transportation management system (TMS), which includes a WMS, has become vital to success. A TMS combines the perks of working independently with the benefits of working together, and shippers can combine orders from different channels and of different modes into one environment, reducing unnecessary delays and costs along the way, reports Roberto Michel of Logistics Management.
4. Use Metrics to Track Progress and Order Fulfillment Processes.
The endless flow of incoming orders via eCommerce actually reflects one part of the multichannel supply chain. In other words, an eCommerce order may be a final order by a retailer when a customer placed an order in the physical store. Ultimately, the role of eCommerce stretches beyond purely eCommerce order and transportation needs. However, shippers should use metrics to track the percentage of orders fulfilled within time requirements, numbers of orders shipped within a given time frame, accuracy in orders picked, packaged and shipped, and labor productivity. Each of these metrics relates directly to consumer promises, such as free two-day shipping.
5. Use Incentives.
Having metrics to track progress and productivity is only half of the battle. Your staff members need to have a reason for working more efficiently than the fear of not being employed. Furthermore, threatening the employment and financial security of your staff will only breed hostility. Instead, you should implement an incentive-based program to encourage all staff members to work together and increase progress and productivity. This increases collaboration, which can also be leveraged to increase collaboration across other parts of the supply chain.
For example, staff members who have the lowest error scores for a month’s worth of eCommerce orders may be awarded additional PTO orders. As a result, your employees will be more willing to make changes in order to access cheaper, faster and more efficient shipping options, such as outsourcing auditing of small packages to a third-party logistics provider.
6. Optimize Transportation Requirements During Picking.
Aside from the labor costs of having staff members physically pick products, the cost of transporting a shipment to the customer represents one of the highest costs in the supply chain. While many small orders may come in, the warehouse should proactively work to reduce the transportation costs by picking and packaging products for intermodal transportation, asserts Art Eldred and Tony Hollis of Supply Chain 24/7. As a result, shippers can reduce transit times and fuel costs, which promotes faster, on-time delivery.
ECommerce shows no signs of slowing, and those who refuse to enhance warehouse and shipping processes will lose their competitive advantages and fail. However, the future for eCommerce is filled with opportunity. If shippers and warehouses can leverage the power of insurmountable demand to improve the processes during order fulfillment and shipping, they can become the industry profiteers of tomorrow.