How E-Commerce is changing the Supply Chain.
Over past few weeks, we have been talking about E-Commerce and Supply Chain. In our articles, we discussed what is E-Commerce. We also stressed the importance of Supply Chain and Supply Chain Management. Managing the Supply Chain is such a job important that should be done by the right person. With a help can come skilled headhunter who will find a person with just right experience. Nowadays a recruitment consultant who specializes in recruiting personnel to work within Supply Chain (or E-Commerce) can be easily found.
Today we would like to talk a little about, how E-Commerce is changing the Supply Chain. There is no doubt that growing E-Commerce has a huge impact on the Supply Chain which has to accommodate growing demands of business. But which areas of Supply Chain were mostly affected by booming E-Commerce market?
For those, who missed the article about E-Commerce a quick recap. E-commerce is a transaction of buying or selling online. Therefore, unlike the traditional way of shopping it requires to ship purchased items to the buyer. That is creating additional tasks within Supply Chain of an E-Commerce company. It particularly involves the logistics aspect.
As we explained in our articles, all processes in a business fall under Supply Chain, such processes take place in each and every company. We can clearly see the direct impact from increased E-Commerce sale on such company’s Supply Chain. It is understandable that companies selling their goods online can see the increase in processes that lead to closing the sale. Each item purchased by the individual consumer must be packed, labeled and shipped to a provided address. Many single parcels directed to different addresses not only increase the cost of logistics, they also create a workload that has to be managed. In this competitive market, meeting costumers demands might be challenging.
In a survey conducted in 2016 over 60% retailers stated that they provide free delivery as well as returns to their customers. It also isn’t uncommon to see same day delivery in urban areas. Staggering 90% of surveyed companies stated they offer 24 delivery time. Such short delivery deadlines put a huge strain on logistics.
To meet before-mentioned consumer expectations companies must look for solutions that are both cost-effective and time-effective. We can see big companies such as Amazon or FedEx investing in a network of warehouses that allow them to meet tight delivery deadlines.
Also, a key role in Supply Chain Management plays innovation. Development of new systems that allow sharing purchase data with the appropriate department or an outside logistics company allows companies to save precious time when fulfilling costumers’ orders. While logistics departments or courier companies like FedEx or UPS work towards shipment standardization that speeds up processes such as parcel sorting or labeling.
Since the buyers become more and more demanding, expecting fast delivery at no extra cost, companies that want to see growth in their online sales must take actions to provide shipment service that is expected by the consumers. And seeing a constant increase in E-Commerce sales implementation of required innovations seems to be worth it.