In a world that has never been more “on demand”, an agile supply chain can quickly adapt to market changes, anticipate spikes in demand, and meet customers’ delivery expectations. So, is your e-commerce business’s supply chain up to the task? Read on to discover the key things you should consider to run a truly agile supply chain.
The pandemic disrupted global supply chains on a scale never seen before. Many companies have since taken the opportunity to build their operations back better, ensuring their supply chains are more flexible, more resilient, and more agile – all of which means they’ll be able to navigate and overcome future challenges more easily.
Agility in the supply chain is not a new concept – especially for e-commerce brands. Take the rise of “fast fashion” brands like ASOS1, for example, where the ability to churn out new trends within a short timeframe is a must.
If you’re an e-commerce business owner, you no doubt already understand the importance of speed along the supply chain – from reacting to market changes in real time, to the Express delivery service you offer your customers at checkout. In our on-demand world, an agile supply chain is your best bet at getting your products to your customers without delay.
David M Gilgor looked at the five dimensions of agility for the Supply Chain Quarterly2. The five metrics identified are:
- Alertness – The ability to predict new trends by listening to customers and exchanging information with suppliers.
- Accessibility – Access to the types of data that will help you decide how to act, shared via the supply chain – not just the IT department.
- Decisiveness – Making decisions on how to respond to opportunities. As supply chains become more complex, agile decision-making falters.
- Speed – Delivering on a chosen course of action swiftly. “Fast fashion” brands rely on bringing new products online at speed.
- Flexibility – Upscaling the way you operate, the markets you trade in, or the service levels of your business partners to take advantage of opportunities.
So, how do these five dimensions translate into actionable steps you can take to optimize your supply chain? Read on for the features you should be considering.
Regular and fast communication
Admittedly, the pandemic is an extreme example of a supply chain disrupter, but there are plenty of more “regular” events – like the weather – that can cause their fair share of problems, too. Mother Nature’s plans cannot always be anticipated, yet ensuring a clear communication line with your suppliers can.
Agile firms have robust cross functional communication in place. Holding calls with your suppliers means you’ll know in real-time when there is a disruption further up the supply chain and you can plan alternative processes accordingly. During a crisis, these calls should be regular, even daily to ensure effective supply chain management.
Order Management Systems
The growth of e-commerce required systems that automate processes along the supply chain, getting more orders processed with fewer delays.
An order management system (OMS) is the answer. Think of it as the super smart heart of your supply chain, all knowing and all seeing. It can monitor data from your various systems to track sales, orders, inventory and fulfilment so that you can get your orders to your customers cheaper and faster. Essentially it keeps everything moving forward; maintaining customer satisfaction and protecting a company’s reputation.
When orders are cancelled, inventory quantities change, or there are delays with fulfilment, the OMS knows immediately. In the event that a customer’s order is delayed, for example, customer support software can be integrated with the order management system, allowing support agents to have a full overview of the customer account and manually help them resolve their issues. This ensures better overall customer experience, from when users purchase online, to when they receive their delivery.
OMSs are designed to be scalable, so can grow with your business. It just takes a little research to find the one best for your needs.
Supply and demand: don’t be left short…
For e-commerce businesses, there will always be peak periods of trading to prepare for, including special holidays– Valentine’s Day, Black Friday and Christmas, to name just a few obvious examples. But the very nature of online shopping – ordering anything, any time, from anywhere – means sometimes trends can be unpredictable.
To manage supply and demand volatility, smart software such as POS (point-of-sale) systems can give you access to data that will provide a real-time overview of your inventory.
Ultimately, knowing your customers’ buying behaviors, habits and motivations means you can more accurately predict peak periods and ensure you’re stocked up to meet demand. Utilize customer data from surveys, social media platforms and cookies to project future product demand, and tap into analytics solutions (such as Google Analytics), too.
…or with too much
At the other end of the scale, an agile supply chain avoids excessive inventory; smarter planning means less wastage and leftover stock. A report by McKinsey & Company3 found that up to 94% of companies that had implemented supply chain practices with other solutions were able to deliver on time and in full, without keeping inventory in excess of 85 days. In contrast, companies that did not implement agile practices often had inventory levels remain in the warehouse for more than 108 days, and only 87% of deliveries were on-time4. All of which means more costs for the business, and unsatisfied customers.
This is why integrating an OMS (as mentioned above) into your commerce platform is key to helping you manage inventory. By having visibility, you can adjust your sales strategy accordingly – for example, offering discounts or a flash sale to shift excess stock.
Partner with an international expert
If you own an e-commerce business, there’s a big chance you already ship internationally – after all, digital innovations mean it has never been easier to connect your online store with markets across the world. Yet, it’s still important to consider the hurdles you may face when selling cross-border. Navigating customs, duties and tax requirements, and border regulations can be complex, and varies by country. Political events – such as Brexit – can disrupt global trading routes, too.
That’s where it pays to partner with an international logistics expert like DHL, which has the global knowledge and local market presence to take care of shipping for you, and ensure your goods get to where they need to be, without delay.
Remember last mile delivery
Speed is the name of the game for customers – they expect Express, Next Day or even Same Day delivery options at checkout, and they want to be kept updated about the progress of their orders with real-time tracking and notifications.
To meet these customer expectations, businesses are increasingly integrating supply chain visibility solutions. In fact, a recent report by Zebra Technologies5 found that 72% of retailers are working on digitizing their supply chains in order to achieve real-time visibility6.
Supply chain management software will enable you to see where manufacturing, warehousing and shipping are in the fulfilment process, so you can be transparent with your customers about when their orders will arrive. Consider too, the proximity of your warehouse(s) to your customers – the closer they are, the faster you can fulfil their orders.
Talk to DHL today about how to optimize your supply chain to ensure your customers receive their orders on time, every time. Remember, satisfied customers come back!
- Supply Chain Quarterly, October 2015
- McKinsey & Company
- McKinsey & Company report, LinkedIn, April 2017
- Zebra Technologies
- Zebra Technologies report, Detego, April 2020