September 2, 2021

5 Tips on Better Managing Your E-Commerce Supply Chain

Miles Varghese
Miles Varghese
Helping independent freight forwarders/brokers better stay in-sync, collaborate, and improve operations with their shippers/clients. Co-founder & CEO @ Cargologik.com
e-commerce supply chain

As the logistics industry reaches its peak season and complexity, managing the e-commerce supply chain is paramount to success. With the introduction of omnichannel experiences and other technological advances, many businesses struggle to compete with digital freight forwarding companies. For better management, leaders must adapt to the growth in the economy and the booming demand for goods. The best way to follow through is to integrate new software with existing systems, learn to capture data to improve forecasting and harness the power of automation.

Here are some quick ways you can get your feet wet when it comes to managing the e-commerce supply chain:

1. Integrate Your Shipping and Inventory Management Systems

Any team must take the first step to enhance performance measures by deploying and integrating shipping and inventory management systems. The more connected your systems are, the better.  Although it’s easier said than done, seek out solutions that are interoperable and that can connect via APIs. Be wary of solutions that are “walled gardens,” meaning that they work well and integrate, but only with the software provider’s other software and modules. That often you will have to pay for. In this day and age, there’s so much room for innovation, yet very little seems to be happening in tandem with one another. 

As the digital freight tech frontier continues to leave everyone behind, it means management needs to get on board. The e-commerce supply chain needs more advanced approaches to support the need and demand during peak season. While these systems work in tandem, it leaves little room for error when these two systems combine. 

2. Capture Data to Improve Transportation Needs Forecasts

To ease into the powerful flow that will come in the busy season, data can help those who need it. Be careful what you wish for though, while technology does streamline operations and make things easier, sometimes it can create a cognitive burden.  That is, an overload of data where it’s difficult to parse through it to find meaningful, actionable insights which are necessary for today’s modern forwarder.

For a business’s e-commerce supply chain, access to previous data will help improve transportation need forecasts. Being able to retroactively review operations over time, even at the individual representative level, can allow you to hone in on your most profitable lanes, people, and clients.  And when it comes to improving margin and reducing costs, focusing on these areas and removing the ones that are not as profitable can help an independent forwarder to differentiate while also improving their margin.

Generally, this type of information is hard to track and the relevant data hard to get a hold of. This is rapidly changing with forwarding systems and the new class of logistics software known as freight collaboration and communication.

Regarding this year, due to the unprecedented economic growth in the last part of 2020, this type of info has been very difficult to track – especially if you didn’t have the software or tools to understand what was happening with your business and customers. To combat this, implement a centralized data system and add systems that can collaborate with existing technology. Real-time visibility also assists management with forecasting as they can see what happens when it happens. 

3. Apply Analytics to Measure the Fiscal Health of Your Operation

Capturing data allows team members to measure and apply analytics to the operations. Doing so also enables those with an e-commerce supply chain presence to manage the overall financial health of the network. This data and these tools can serve as your true north, directing what you should be focusing on and generally maximizing, which is what you’re great at as a forwarding organization. 

This is also critically important for those who need to remain competitive against those who utilize a digital freight network. We encourage our independent logistics companies to be wary of utilizing these networks without truly understanding the economic drivers and motivation of the software provider. Sometimes the strategies of these software companies span many years, and if they’re not operating transparently and sharing this information with you, then just be careful. 

Often these networks can be races to the bottom, predicated too highly upon price. When that’s the case, then you end up commoditizing your business and exchanging differentiation for a short-term fix for your revenue issues. Seek out software that not only helps secure business but also that empowers the forwarder or broker. 

Keeping up with fiscal health can help prevent any high overhead costs or other transportation costs with the right systems to help you manage this over time will allow you to succeed in today’s environment.

4. Leverage Automated Workflows to Manage by Exception

Another opportunity to enhance collaboration by digitizing your freight network means leveraging automation to include workflows to manage by exception. The idea behind this is to decrease the wasted time for issues that do not always need human intervention. If you find yourself engaged in the same redundant activities over and over again in your commercial business, take a second look at them. See if there are consultants, software, or other ways to redesign the business in order that you can remove some of this redundancy. 

Automated workflows for the e-commerce supply chain will keep time-consuming errors at bay and increase productivity. Redundancy and the associated wasted time and costs associated with both the forwarder and the shipper is the real commercial killer keeping your margins low and preventing you from expanding your client base effectively.

5. Avoid Ambiguity With Real-Time Data and Clear, Concise Communications

Encouraging collaboration and technology in freight forwarding help clear confusion using real-time data too. A lightweight system of record that can be easily accessed or managed by partners and clients might just be the answer for many international forwarding companies.

Regarding the business itself, many aspects may be left up to interpretation, but those split-second decisions can cost valuable time and resources without all available data. And in worse cases of oversight or sloppiness, can cost you the business if you cannot effectively get that e-commerce cargo to where it needs to go on time and on budget. This is why transparency is so key to all parties.

According to Supply Chain Dive, those with an e-commerce supply chain presence have the leg up, but planning should parallel forecasting for a continuous clear picture. 

Put These Steps Into Action in Your E-commerce Supply Chain by Choosing the Right Tech Partner

Start the path by following the steps above. And remember that upgrading and implementing collaborative technology to the existing network will boost productivity and profitability. It doesn’t need to be a massive investment either, or something where you’re trading a significant portion of your revenue away for. Baby steps eventually turn into real steps, and simply getting started can put you on the right path forward to start building a culture of differentiation that can keep up with customer demand and tech. Decreasing costs and increasing the flow is made easier with the right partner. It’s time to take action to get ahead this peak season, gain visibility, and get the most out of upgrading by contacting Cargologik today.

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