E-commerce spending will surpass $4 trillion annually by 2020, reports eFulfilmentService, accounting for approximately 15 percent of total global retail spending. To meet demand, shippers must rapidly ramp up production and move more product, but the industry is struggling. The capacity crunch continues, and the ELD mandate has lowered the number of trucks available. This creates a major problem for managing e-commerce fulfillment when orders spike and shippers need to understand how data analysis may help.
Challenges in Managing E-Commerce Fulfillment
The challenges of managing e-commerce fulfillment go back to the need to rapidly scale operations to meet changing demand. This implies a need to gain greater accountability and efficiency throughout the entire supply chain. Instead of focusing on individual challenges, it is best to categorize the issues into their overarching causes. According to Webgility, these may include:
- Manual processes and activities.
- Lackluster insight into freight spend and poor freight management controls.
- Disjointed systems and data silos, creating delays in processing and deficiencies in visibility.
How Surface Mode Shippers Can Compete in E-Commerce Logistics
Get Your Free White Paper Today
Data Analysis Enhances E-Commerce Forecasts and More
Take a moment to consider what goes into managing e-commerce fulfillment. Warehouse Managers and logistics services providers need to have an estimate of the projected demand for all given times. This is about demand forecasting and understanding the ability of a facility to handle changes in demand. Fortunately, data analysis allows Warehouse Managers to gain the insights necessary to create metrics to track performance, which are also known as key performance indicators (KPIs). According to Conveyco, KPIs should be established through data analysis to measure these key areas:
- Warehouse capacity.
- Order picking accuracy.
- On-time shipments.
- Modes of transportation used in terms of costs and delays associated with each.
- Order volume.
- Picking efficiency and productivity.
- Label accuracy.
The list of metrics can go on and on, so shippers should consider streamlining the entire process by automating supply chain controls and notification systems with business intelligence. This will contribute to fewer headaches in managing KPIs and free Warehouse Managers to focus on work, not following up on countless metrics.
Shippers must also estimate the space required, determine the effect on logistics, reslot the warehouse, move toward a just-in-time inventory management process, clear receiving, boost returns management, consolidation SKUs, and develop robust practices to enhance supply chain efficiency for e-commerce, explains Brian Barry of Multichannel Merchant.
Benefits of Data Analysis in Managing E-Commerce
Data analysis KPIs help Warehouse Managers improve operations and ensure success. Gains in productivity are often the result of implementing new best practices in the e-commerce supply chain, so knowing how to leverage data is key to success. Some of the best uses of data, asserts Don White of Multichannel Merchant, include:
- Use of automated picking technologies, such as robotics, resulting in efficiency gains in orders picked.
- Slotting optimization, reducing foot traffic in picking more orders.
- Flexibility to enable better insights into data, like increasing employees to meet short-term spikes in demand.
- Performance measurement of team members, helping leaders know when coaching or additional training may be necessary.
Handle Sudden Changes in E-Commerce Fulfilment Now
E-commerce places a heavy strain on Warehouse Managers. Existing systems may be stretched to their max, and maintaining productivity in competition with Amazon, are difficult goals to accomplish. Organizations that leverage data analysis can mitigate the sudden changes in e-commerce fulfillment and demand, preventing bottlenecks and confusion.