There is a complex mechanism at work behind the easy online shopping experience enjoyed by 100 million Indians. And it is constantly developing, improving and adding greater convenience to the repertoire of ecommerce. This complex mechanism is what is referred to as the ecommerce supply chain. It contains within it the entirety of every single order's life cycle, from start to finish.
To ensure your customers enjoy their online shopping experience, they must also enjoy their delivery experience. This means that your supply chain must operate as a highly functional well-oiled machine. Managing your supply chain effectively could save you a lot of money in shipping costs, reduce overall losses and max out customer satisfaction levels. Given the importance of supply chain management in the current eCommerce atmosphere, we'll be deep-diving into the ocean of knowledge to explore this treasure close-up.
2) What is eCommerce Supply Chain Management?
A basic guide to eCommerce supply chain management will tell you that it refers to the procurement, production and distribution of goods for sale. However, we’re here to give you an advanced guide, designed to let you take your business growth to the next level.
Looking deeper into how your supply chain works, you’ll find that each of these major functions contains a plethora of activities that need to be completed. Supply chain management essentially means that you must take control of your goods from the moment you get the raw materials to create them. You then need to oversee the creation of your products and their movement to warehouses.
You have to keep track of your entire inventory spread across multiple storage locations and ensure stock is available to fulfill orders as they come in. Finally, you would have to ensure you're using the right shipping tools to get the orders to customers in a safe and timely manner. You'd need to be able to track orders on the way, resolve issues as they arise, remove obstacles in delivery and keep your customers updated every step of the way. These are just some of the elements that supply chain management enables you to take control of.
3) What is the Role of eCommerce Supply Chain Management
We've given you an idea of some of the functions that fall under the purview of supply chain management. But looking at the ecommerce supply chain from the outside, it appears in the form of a tangled web of manufacturing and shipping functions.
To really understand how supply chain management can empirically improve your overall business serviceability, it's best to break down your supply chain to its major steps. These are the various aspects of your business that supply chain management allows you to oversee and enhance.
3.1) Ensure Stock Availability
Your first and foremost job as an ecommerce enterprise is to source out products that customers want. This may mean you buy the products from manufacturers or delegate the job of production. The end goal is to have a regular flow of stock available to ship to customers.
3.2) Maintain a Shipping Strategy
Shipping to customers isn't as easy as it sounds. If you really want to make sure the process of sending orders to customers goes smoothly, it's always good to plan ahead. Your shipping strategy should contain information pertaining to supply chain.
3.3) Set Delivery Targets
At the end of the day, eCommerce businesses make promises to customers, and you need to keep those promises. That's what targets are for. Delivery targets can be set on the basis of the number of orders fulfilled, pin codes serviced and accuracy of delivery information given to customers.
3.4) Adapt to Market Trends
The most efficient ecommerce business is one that is constantly evolving. Supply chain management requires you to keep up with the latest advancements and offerings used by your competitors as well as listen carefully to demands from your customers. This along with a flexible supply chain, lets you stay 2 steps ahead of the rest.
3.5) Maximise Order Fulfillment
We’ve established that the first step in eCommerce supply chains is the procurement of the output. That means the final step is to get rid of as much of that output as customers will buy. The true goal is to ensure every single customers' order is fulfilled. That is the highest aim of any ecommerce endeavour.
4) How eCommerce Supply Chain Management Works
The supply chain of any business is a constantly flowing and constantly evolving mechanism. But the way the logistics industry works has remained largely unchanged. The goal of this industry has been to enable maximum order fulfillment. With the advent of ecommerce, the logistics industry had to make use of all available resources to keep up with customer demands.
However, an eCommerce supply chain continues to follow the same major movements as any traditional vendor. Just with larger order volumes, greater customer reach and tech-enabled convenience. Catching the minute details is where technology has played a powerful role. Viewing your supply chain as the sum of its pieces, rather than as a whole, allows you to view each step in the supply chain (listed below) under a microscope.
4.1) Inventory Management
Inventory management is the first task in the supply chain. It essentially refers to the entire process of turning raw materials into final goods and then readying those final goods for sale. Inventory management allows you to keep track of, produce and store stock in accordance with customer needs. You would need to be aware of how much inventory is required in any given time frame so you're not left with an overload or empty hands during peak sales times.
4.2) Warehousing and Distribution
Warehousing and distribution of your goods is the next big step. Once your goods are ready for sale, you need to keep them at easily accessible locations. You may keep some at your physical location if you have one. But more often than not, you would need to rely on third-party tools to store your inventory in well-distributed warehouses. This gives you the upper hand when it comes to speed up shipping to different pin code ranges.
4.3) Processing Order Information
Once your supply is ready, stocked and aimed at your customers, it's time to pull the trigger. In the case of eCommerce, pulling the trigger has multiple steps. After each order is placed, an appropriate shipping partner has to be selected.
The order must then be processed by that shipping partner to ensure it reaches the right location within the promised period of time. This process includes the creation of shipping labels and the AWB (airway bill), packaging the product and then assigning it for delivery. Automating this process with supply chain management software can turn this process into a quick-trigger system.
4.4) Transportation of Orders
Warehousing and order processing are tasks that can be entrusted to third-party tools. This frees up your shipping partners to focus on the vital part of the transaction, i.e., actual transportation of the orders to customers.
Shipping partners can use multiple transportation methods, like air, sea or road. Some may even be able to provide additional shipping services like insurance for high-value products, temperature-controlled transit for perishables, and even specialized handling for bulk or hazmat goods. These options add further utility to your eCommerce enterprise.
4.5) Successfully Delivering Orders
Now we're reaching the end of your supply chain, i.e., your customers. The life cycle of an order typically ends once it has reached its final destination. And to ensure maximum fulfillment, an order's ideal final destination is the customer's location.
To ensure delivery has been successful, you can request proof of delivery to be submitted or customer feedback forms. In case an order is rejected or delivery fails on repeated attempts, the order's journey ends when it returns to the origin warehouse. In such cases, you would need to reach out to the customer to determine why order wasn't successful so this cycle of rejection won't repeat itself.
5) Top Supply Chain Management Tools Used in eCommerce Industry
By now you should hopefully be starting to see the bigger picture. The supply chain is essentially like the human body. It requires the help of multiple systems to maintain optimal functionality. The respiratory system and the nervous system are both equally vital to our health, but susceptible to different ailments. We treat different issues keeping in mind the intricacies of each system.
An ecommerce supply chain function must be maintained in a similar manner. There are a variety of tools and systems available to aid in production, distribution and shipping operations. Understanding what role these companies play is the key to delegating different steps while still maintaining full control over your supply chain.
Your suppliers are the ones responsible for creating the life force that flows through the veins of your eCommerce body. At the end of the day, you need vendors that can regularly provide a steady flow of high-quality products to keep your business running smoothly. An eCommerce enterprise with an unstable supply is like a body that can't produce cells. Your choice of the supplier must therefore be extremely careful as it is the core of your business, and what customers first look at.
5.2) Shipping Companies
Now we move on to the eCommerce shipping companies, which basically act like veins. They ensure the transportation of your supply units to the necessary destinations. You may need more than one system of transit to ensure your goods reach every single location that your goods need to reach.
And they need to be able to provide these services constantly. The entire body suffers when blood to even a single limb stops. If there are delays or difficulties in this flow, these are problems that can usually be fixed by addressing the cause of the blockage. These causes can be identified by breaking down the different aspects of your supply chain.
5.3) Third Party Logistics Services Providers
Third party logistics services providers refers to any other third party company that offers tools to speed up or enhance your supply chain functionality. These can include selling channels like Shopify and Magento, marketplaces like eBay or Amazon, accounting software like QuickBooks, Warehouse management systems (WMS), Enterprise Resource Planning(ERP), inventory management software and numerous others. These help to fill up gaps that exist in your supply chain between your suppliers and your shipping partners. They can help you optimise a variety of smaller but equally important functions
5.4) Shipping Aggregators
As we mentioned earlier about shipping companies, you may need multiple to reach every extremity. This becomes a necessity when your company reaches a certain level of growth. It can be quite a task juggling multiple shipping partners as each one has its own protocols and procedures that it follows.
To understand the actions of each shipping partner, you would have to track them individually through their respective platforms. This is where eCommerce shipping aggregators help. They allow your eCommerce enterprise to tie up with multiple pre-selected shipping partners and let you track their movements through a single platform. There are still limitations to the functional uses of shipping aggregators.
5.5) eCommerce Supply Chain Management Software
Supply chain management software use technology to manage nearly all partners and functions used in your supply chain. Like aggregators, they provide a unified view of all shipping partner activity. However, these software also enables you to choose from a wider range of shipping partners and get access to a greater variety of services. Supply chain management software focuses on data science and automation.
It enables you to link your inventory management system with your WMS, your storefronts, and your shipping partners. And it further allows you to communicate with your customers more proactively through automated responses. Look at your e-commerce business like it is a genetically engineered child. Adding a supply chain and shipping management software to its operations turns that baby into Cyborg.
6) Top 10 Best eCommerce Supply Chain Management Software, Tools and Solutions
A supply chain management software is essentially the communication hub for your ecommerce entity. That's why we liken it to the human nervous system. Unlike with our nervous systems, you get the opportunity to tie up with the supply chain management software of your choice. There are numerous companies operating shipping and supply chain management software in various parts of the world. They’re primary function is to enable easy order tracking but each one offers numerous other potential benefits.
You can distinguish between them based on area of operation, serviceability, tech capabilities, cost, and features. Even then, it can be hard to narrow in on even a few, leave alone a single one out. Hopefully, this list of the top eCommerce supply chain management software around the world will give you a basic jumping-off point for potential future searches.
ClickPost was founded in 2015 and is currently one of the leading shipping and supply chain management software for eCommerce operations in India and the Middle East. It is an effective solution for large enterprises with high order volumes and provides integration with 120+ shipping partners and many selling channels. ClickPost makes use of both Push and pull APIs to provide real-time order tracking updates and automatically push them to customers as well as display them on a customized branded tracking page for your business.
Order processing and manifestation (which includes AWB generation, shipping label printing, packaging and assignment) is automated through it. It also offers options for NDR Management and Returns management to actively reduce RTOs and losses. This is carried out with the help of regular analytic reports, created with AI-driven mechanisms that identify problems in delivery and determine how to correct them on a cause-basis.
MetaPack is a shipping management software for eCommerce enterprises that was founded in 1999. It is based out of London and continues to operate primarily in the UK as well as a few other major countries.
Much like other shipping software, it provides a single platform for tracking orders across multiple carriers, as well as over 3 Lakh storage centres to enable faster shipping. MetaPack is also tied with 400+ global carriers, and aids with navigating customs clearances. It also automates creation and printing of shipping labels.
ShipWell is an American company based out of Austin, Texas. The logistics management software it provides was created by 2 former MIT students with an understanding of ecommerce endeavours. This software is primarily accessible in the US as well as for certain brands in major foreign countries.
Like ClickPost, it automates order processing and order tracking for ecommerce enterprises. It also uses data to select optimal routes for delivery and identify delivery exceptions. A proprietary load-board matching algorithm is made available through it which matches orders to the appropriate courier partners.
ShipStation began providing its shipment tracking and management software services in 2011. It is currently operational for use by global eCommerce businesses located in Asia, Europe and North America.
This software offers integration with multiple carriers and storefronts as well as the creation of customised labels and packaging (brand-specific). With this software, you can also integrate with other third-party logistics services providers like Quickbooks or your respective WMS. It also provides inventory-based analytics to better ensure stock availability.
Narvar is a company founded in 2013, based out of California that provides eCommerce software that aids in various aspects of supply chain management. Over 800 different global brands across 38+ countries use Narvar.
It is primarily operational in Asia, America and Europe. Much like a few of the other software on this list, it enables order processing, shipping label creation and packaging. It also offers a tracking mechanism for all orders, complete with a branded tracking page for customers. It uses Concierge centres to enable quick pickup and dropshipping, though access to concierge services is restricted based on shipping partners.
Like Narvar, Shippo is based out of California. It was first introduced to the eCommerce world in 2013 and continues to be headquartered in San Francisco. While it is used by numerous brands across the United States, it is also considered to be a globally operational software and is known for handling international order management.
In fact, Shippo is preferred by global e-commerce enterprises as it aids in customs clearances and provides efficient tracking for imports and exports. In addition to order tracking, it also provides automated solutions for processes like printing shipping labels and packaging.
FreightPop is another California company, this one was founded in 2015. It is one of the foremost transportation and fleet management software companies in the world and provides its solutions on a global scale. Ecommerce businesses with both a domestic and international customer base can make use of FreightPop to streamline their transportation mechanism.
This is because the software offers integration with 300+ carriers at negotiated rates. This software essentially allows easier warehouse management even for companies that are not employing any WMS or ERP.
Aftership is a company that is based out of Hong Kong. Since 2011, this company has been providing its eCommerce shipment tracking software to businesses operating all over the globe. It currently provides integrations with more than 600 different shipping companies and multiple selling channels.
The major feature of this software that has gained it much popularity is its package-tracking feature. This feature tracks orders being shipped across large destinations and then relays the information back to your online business. This also enables it to provide time-specific analytic reports.
Founded in 2014, this European software company focuses on simplification of eCommerce functions and operates largely within its continent of origin. The most well-utilized part of this software is its Operations Experience Platform. This platform provides shipping partner integrations as well as integrations with storefronts and marketplaces.
Its main purpose is to enable businesses to proactively communicate with customers using personalized communication methods. Parcellab also offers order tracking and data collection mechanisms so that orders can be monitored and defects in the delivery process can be corrected.
Veeqo is a shipping and inventory management software that was developed by a UK-based company in 2013. Numerous different eCommerce businesses located in Great Britain and the surrounding regions make use of this software. While it is not at the top of the list when it comes to ordering tracking, it is one of the most effective software for inventory management.
Each vendor must be individually integrated with, but once process is complete, this software synchronizes inventory with all vendors among all selling channels & storage facilities. This essentially ensures that you are always aware of how much inventory is available in any given location, so stock is always available for any order placed. This also enables regular stock appraisals to be performed, so you can have an inventory forecast in regular intervals.
7) What are the Key Benefits of eCommerce Supply Chain Management
Efficient supply chain management basically requires you to balance the cost of your operation with the satisfaction of your customers. The idea is based around the old addage, "You've got to spend money to make money". You'll be spending on additional shipping services, the use of third-party tools and software to manage them all.
At some point (ideally prior to spending), you should ask yourself what tangible results you want out of each tool and out of your overall supply chain management system. This is what supply chain management software aims to aid you with. With an effective, tech-enabled supply chain management solution in place, you should see the following benefits evolve.
7.1) Better Customer Experience
A good customer experience will tempt your customers to return to you for more services. Providing the best customer experience guarantees that they will. With proper supply chain management, you can ensure your customers rarely witness even the slightest disability in your services.
It can help ensure that no order they place is later met with a "Stock Unavailable" error message. You can proactively reduce delays and failed or fake deliveries. Communication is key for customers. So with better order tracking, you can keep them informed every step of the way so they feel the presence of their order before its arrival.
7.2) Greater Visibility
It isn't just customers that require clear communication and transparency. This is a must-have for your business as well. The entire purpose of supply chain management is to allow you to see your entire ecommerce flow as a whole and in fragments. With supply chain management software, you can zoom in and zoom out to view different parts of your supply chain.
You can take a look from atop and decide to upgrade your entire WMS. Or you can narrow in on the performance of a single shipping partner and ensure they use route optimisation to avoid delayed deliveries to a particular region. This visibility ensures you can catch and address both big and small issues.
7.3) Automate Shipping Functions
Once you know how your supply chain works from end to end, you can start breaking it down into smaller functions and tasks. This enables you to determine how these functions can be automated. Automation enables faster speeds, greater accuracy and more overall efficiency. Supply chain management software provides specialty tech capabilities for eCommerce endeavours and already automates numerous functions. The selection of shipping partners for orders can be done with the help of AI-driven recommendation engines.
ClickPost is a supply chain management software that provides a single API for order processing, which turns the whole thing into a single-step process for you. Even tracking can be done more effectively using both Push and Pull API integrations, like those enabled by ClickPost. Through automation, you can actively reduce costs and losses while increasing efficiency and improving customer experience.
7.4) Improve Delivery Mechanisms
When you add better visibility to the automation of important functions, you can definitely expect some improvement in your overall system. However, streamlining your delivery mechanism is about making constant improvements based on small and large factors. Take, for example, NDRs. Non-delivery reports occur when a delivery fails. The best way to turn it into a successful delivery is to determine why it went wrong, and then attempt to rectify the error.
This is a doable task for NDRs occurring due to incorrect delivery information or unavailability of customers. Less so for rejected orders. Accordingly, you could improve your delivery mechanism simply by segregating NDRs on the basis of their causes and approaching customers immediately after notification. This is a part of the NDR workflow offered by ClickPost. Seemingly small improvements like this can have a huge impact in the long run.
7.5) Maintain Flexibility and Growth
Every ecommerce business needs to have a clear and firm structure to ensure it operates smoothly. This is the structure you will see when you look at your entire supply chain from a distance. Products are received from the supplier or vendor, added to stock and sent to warehouses, after which shipping partners deliver them to customers.
And all the while, you can watch this entire process unfold through your supply chain management software. However, to make those improvement initiatives we mentioned above, a certain degree of flexibility and adaptability is needed.
Your overall structure should remain the same but certain areas and protocols may need to be added or amended to make things move faster or ensure successful delivery. Managing your supply chain effectively turns you into the ultimate contortionist, allowing you to maintain this flexibility on both big and small scales. This enables customers to access either streamlined solutions or customized solutions, as per their preference.
8) Final Conclusion
Supply chain management is an end-to-end process that defines the direction your business will go in. As your place in the market grows, you'll need to acquire more and more resources to meet customer demands.
As you tie up with shipping partners and more third-party logistics tools, supply chain management becomes a juggling-esque task. But you can gain mastery in juggling with the help of a leading supply chain management software. It should give you a 360-degree view of your eCommerce operations. And it should empower you to innovate and enhance every mechanism in your supply chain.