If you’re selling goods online, then having a strong grasp of your supply chain is essential. It can often spell the difference between success and failure. In the modern era, customers expect goods to arrive the very next day – or, in some cases, same day delivery! To deliver this kind of service, you need to look into effective supply chain management for ecommerce.
What is supply chain management?
Supply chain management concerns the effective flow of resources from one link in the supply chain to the next. If you’re mining rocks to turn into tiles to sell to kitchen installers, for example, then it’s critical that you’re able to move the goods on quickly in order to free up space, and save on warehousing costs.
In the modern era, the chain tends to be overseen with the help of management software. This allows for rapid communication, which allows problems to be spotted and mitigated early. The supply chain sees cash flow from one end to the other, while the products flow in the opposite directions. The modern standard for supply chain management software is ERP (or enterprice resource planning) software.
The stages of ecommerce supply chain management
You can think of a supply chain as being divided into five distinct stages.
First, you’ll need to plan the chain. This plan will be based on your assessment of market demand for the products being supplied. The more people want your goods, the more capacity you’ll need to supply in order to maximise profit.
Next, you’ll want to source the firms that will make up the chain in the primary, secondary and tertiary sectors. Suppliers and retailers need to be able to collaborate.
Next, you’ll need to actually make the products from the raw materials you’ve sourced. This includes any necessary packaging at every stage of the process.
Delivery is the final step. You can’t be said to have supplied something if it hasn’t actually been delivered to the end user. But there is an extra step, too: the returns process will need to be in place to deal with any defective or otherwise unsatisfactory products.
How to create an effective supply chain management system
Your system should ideally do several thiungs. It should look to lower your costs and shipping times, and to direct your workers to where they’ll actually be most productive and effective. It should also allow you to deal with your warehousing better, by helping you to assess demand (and in some cases pool warehousing resources with your collaborators.)