The success of your e-commerce business often hinges on the strength of your supply chain.
In this instant gratification world, customers want their products yesterday. If you can’t provide that product faster than your competitors, you’re likely to lose a sale. Should this be the case? Probably not. Quality products are important, but speed is the name of the game.
A disruption in your supply chain is one of the worst things that can happen to an e-commerce business. You can expect an angry email, if not worse, from these disruptions. Avoiding disruptions isn’t always possible — there are a lot of factors outside your control, especially now.
The COVID-19 pandemic has created some logistical nightmares. A lot of these stem from supply chain disruptions due to outbreaks at warehouses, particularly in China. The big names, such as Amazon, are making changes. Amazon is investing a lot of money to prevent delays.
Here are 5 simple ways to strengthen your supply chain and make customers happy — even without $4 billion:
1) Investigate
The first step to strengthening your supply chain is investigating areas for improvement. There is a lot of useful software that will help you monitor your supply chain. These help you track inventory, along with other useful analytics.
You’ll be able to identify any points of weakness in your supply chain. These programs also make your systems more efficient.
There is software for every type of business, big and small. Start with a simple Google search: “best supply chain software for __________ business.” Comb through the reviews to see which software best fits your needs. You may consider hiring a consultant during this phase. Consultants can work with whatever software you choose to help strategize on next steps.
2) Implement New Technology
Now that you’ve investigated your supply chain — and identified any weaknesses — it’s time to continue using technology to increase efficiency. It may make sense to look into automating certain components of your warehouse or encouraging your suppliers to do so.
Amazon relies heavily on automation and robotics. Automation and technology helps avoid delays due to labor shortages, which are becoming increasingly common due to the COVID-19 pandemic.
Obviously, not everyone can afford this technology. But even small e-commerce businesses can improve their technology — particularly in their pick and pack systems — to speed up delivery times.
3) Evaluate and Improve Your Relationships
Your two main supply chain relationships are with your employees and your vendors.
Starting with your employees. You’ll want to evaluate training programs. Even if you’re able to automate certain processes, your employees will always be the most crucial component of your operation. Evaluate your employees and training programs based on empirical measures such as order processing speed.
Next, take a look at your suppliers and measure their ability to fulfill orders. Are certain vendors lagging others in delivery time? You may need to have important discussions regarding expectations and what you need to satisfy your customer’s needs. This is a good opportunity to discuss important issues such as the ability to handle increased demand and contingency plans for any COVID-19 related delays.
4) Get Closer to Your Customers
Location, location, location. While getting closer to your customers in large metros may be expensive, it will expedite your delivery times.
Amazon has placed an increased emphasis on warehouse location in recent years. Their large fulfillment centers are located near major metro areas, usually nearby secondary airports in those cities. By utilizing smaller airports, they can avoid traffic jams at major hubs.
Having warehouses near your customers is key to reducing the distance your product has to travel. Walmart has been dominating e-commerce since the COVID-19 pandemic because, well, they’re everywhere.
Amazon is looking to buy failed retailers such as J.C. Penny’s to act as local fulfillment stores. The bottom line is: the closer you are to customers, the quicker you can deliver, which means increased customer satisfaction. Do a cost-benefit analysis to determine how increased rental prices near major metros could increase business.
You’ll also want to consider the location of your suppliers. The closer they are, the shorter the links in your supply chain.
5) Get Creative
It may be time to take a creative approach to your supply chain management.
One such approach is to increase warehouse space. Obviously, the more product you have readily available, the quicker it will get to customers. You don’t want to have too much space and not enough product, so you’ll want to consider increasing orders if you take this approach.
A cheaper option is increasing your warehouse space by better organizing it. This will allow you to use the space you already have more efficiently. This will also allow quick access to products for your pickers.
Another option is insourcing your manufacturing. While this can get expensive, it will decrease shipping expenses and speed up delivery times.
Unprecedented times require creative solutions, especially when it comes to supply chain management and all its moving parts. It’s a worthwhile investment to improve customer satisfaction to keep them coming back.
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