E-commerce has presented wholesale distributors and original equipment manufacturers (OEMs) with a crown opportunity for growth, but it comes at the cost of transitioning from single-channel shipping. According to the U.S. Department of Commerce, U.S. e-commerce retail sales have increased 3.9 percent from the first quarter of 2018. Over the last year, average e-commerce sales have increased more than 15 percent, revealing the increasing demand for multichannel fulfillment and shipping.
Challenges in Multichannel Fulfillment and Shipping
Multichannel fulfillment and shipping come with unique challenges that are in direct contrast to the way supply chains operated previously. Today, consumers can shop any time of day and from around the globe. Unfortunately, manufacturers and OEMs may lack the infrastructure necessary to facilitate such changes, and resellers face challenges in optimizing procurement for the world of e-commerce. Implementing a multichannel fulfillment strategy carries additional challenges. Some of these, reports Channel Advisor, include:
- Multichannel fulfillment has an increased cost in comparison to traditional shipping.
- Setup time. Adapting supply chain systems to succeed in multichannel fulfillment and shipping, also requires additional setup time. This may be the result of moving manufacturing closer to end-users and developing business-to-business sales channels.
- Supported channels. The biggest problem with developing a multichannel fulfillment shipping strategy lies in the need to develop and support e-commerce platforms.
- Branding concerns. It may not be possible for some small and midsize businesses (SMBs) to implement robust e-commerce platforms, so outsourcing the process may be necessary. Unfortunately, this can lead to brand confusion, reducing your brand value.
- Warehouse selection. Finally, manufacturers and wholesale distributors must consider changing where product is stored, requiring a review of available warehouses and alternative shipping strategies.
- Trouble blending organizational silos. Supply chain partners may have trouble blending organizational silos. In other words, they may not be able to successfully integrate e-commerce in brick-and-mortar fulfillment into a single operation.
- Lack of visibility into the supply chain. Lackluster visibility within the supply chain also contributes to increased costs and poor customer service in the age of e-commerce.
- Inability to improve operations. SMBs may struggle to improve operations, as well as experienced delays in scaling a company.
- Talent deficiencies. Although the importance of e-commerce is growing, manufacturing’s perception as a dirty, work-intensive process continues to result in talent deficiencies and a lack of policy standardization.
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Collaboration Is Key to Success in Multichannel Fulfillment and Shipping
To empower successful multichannel fulfillment shipping, distributors and manufacturers need to rethink existing operations and tailor existing systems to meet the needs of an e-commerce-driven world. This will enable better collaboration, which is possible through the following:
- Centralized platform controls.
- End-to-end transparency and connected supply chain management.
- Synchronize systems.
- Automated processes.
- Unified inbound and outbound strategies.
This could sound like a nightmare, but it has a simple premise. Shippers must upgrade systems and leverage the latest technologies to bring harmony to the multichannel fulfillment and shipping operations.
Best Practices in Multichannel Fulfillment and Shipping
Manufacturers and distributors seeking to improve multichannel fulfillment and shipping can streamline the processes by understanding a few basic best practices. According to Michael Hu of Ivey Business Journal, following such best practices will help to achieve strategic value in multichannel fulfillment and shipping. These include:
- Define shipping solutions and customer strategy simultaneously.
- Be flexible with shipping options and capabilities.
- Align metrics and incentives with unique e-commerce goals.
- Balance growth and profitability.
- Define KPIs and thresholds for change.
Putting It All Together
Manufacturing and distribution are evolving in the wake of the growth of e-commerce. Manufacturers and distributors have an opportunity to bring renewed growth and sustainability to their enterprises, but they must understand the unique considerations and challenges inherent in multichannel fulfillment shipping. It is not enough to succeed in brick-and-mortar shipping and fulfillment anymore, and those that do not adapt to the changing supply chain strategy will face the threat of bankruptcy. Cerasis now offers easy-to-integrate e-commerce solutions, enabling multichannel fulfillment and shipping across a multitude of companies, including those outside the U.S. Ultimately, more shippers will soon choose to implement multichannel fulfillment and shipping strategies, and those that hold out will be poorly prepared to succeed in the new age.