Supply chain management in e-commerce
Supply chain management is the backbone of any e-commerce business. It aids in streamlining the process of taking your goods from point A to point B. For instance, it could involve moving materials from the factory to your warehouse and then from your warehouse to your customers. But how does e-commerce help in supply chain management?
Supply chain management is an umbrella term for all aspects of logistics, including manufacturing, procurement, distribution, transportation, warehousing and retailing. The goal of supply chain management is to make sure all parts of your company’s operations are working together seamlessly to provide excellent customer service at every stage of their purchase experience with you, as well as ensure that their products reach them quickly and reliably so they can enjoy them right away after purchasing them.
What is a supply chain?
A supply chain comprises interconnected links that make up your company’s logistics. These links work together to ensure that your products reach customers at the right time, in the right place, and at the right price.
Supply chains consist of components: raw materials, suppliers, production facilities, distribution centres, and retail stores. They can vary in size and complexity depending on the type of business you are running and how many customers you have.
Supply chains are essential because they help companies reduce costs by ensuring they are working with reliable suppliers who provide quality materials at competitive prices. They also ensure that products get from point A to point B efficiently so there aren’t any delays or extra costs associated with shipping them over long distances (which could result in lost sales).
E-commerce helps in supply chain management by providing a platform for online orders and payments, as well as tracking shipments and inventory. It also improves the speed at which you can receive orders, and allows customers to find your products more easily.
Why Supply Chain Management (SCM)?
As the global economy is expanding and becoming more complex, supply chain management is essential for companies to remain competitive.
As an entrepreneur, you know that your supply chain is one of the most critical aspects of your business. From the moment you purchase to the moment it gets to your customer’s hands, you want to make sure that everything goes smoothly—and that’s where supply chain management comes in. But how does the eCommerce supply chain work, and how can it help you run a business?
Here are five ways it can help you:
- You can get the products/services you need
The first advantage of supply chain management is that it helps you get the products and services you need.
For example, if your company needs a new type of software for its employees, but it is not available in the marketplace, supply chain management will help you find another company that has the software and then find a way to work with them to use it for your company.
- Reduce waste and increase efficiency
Supply chain management also helps reduce waste by streamlining processes across multiple companies to be more efficient and effective. But how does the e-commerce supply chain work?
For instance, if there’s an error in one part of the process or one company doesn’t perform up to expectations, all the other parts of the process are affected as well. But supply chain management helps eliminate those problems by making sure everyone involved has all the information they need and knows what their role is.
- Ensures that all products meet your quality standards
Supply chain management ensures that your products meet your quality standards. It allows you to track the movement of goods from their origin to the end user, ensuring that all parts meet your quality standards and specifications. This can help you avoid situations where a product is being used but not performing up to mark or where a defective part causes injury or damage to someone’s property.
- Improves collaboration with suppliers and customers
Supply chain management also improves collaboration with suppliers and customers. By tracking all aspects of a product’s movement from supplier to customer, you can better understand how a product is made, what it costs, and how customers use it. This allows you to work more closely with suppliers and customers on improving processes for producing and selling goods. This helps both parties get what they want out of the process.
- Reduces risk due to faster decision-making
One of the most significant advantages of supply chain management is that it can help reduce risk. By managing and tracking the flow of goods and materials at every stage in their journey, you can better understand and predict when they will arrive, ensuring they arrive on time and in good condition. This gives you more time to make decisions and plan.
Supply Chain and Logistics process in the E-commerce industry
The supply chain and logistics process in the e-commerce industry is a complex and delicate balancing act. The logistics team ensures that products get to their customers promptly while keeping costs low. But how is supply chain management used with e-commerce? Here’s how:
|Supply Chain and Logistics process in the E-commerce industry|
|Plan the supply chain|
|Store product inventory|
|Plan delivery routes and routines|
|Deliver goods to customers|
- Plan the supply chain
With the advent of e-commerce, the supply chain has become more complex. With so many different product categories, a company must figure out how to optimize its supply chain for each product type. If a company doesn’t plan its supply chain well enough, it could waste inventory and slow delivery times.
- Source materials
The second step in knowing how supply chain management is used with e-commerce is sourcing materials. This includes finding suppliers and negotiating contracts with them. It can also mean managing your materials if you are planning on selling directly to customers rather than through retailers or other distributors.
- Manufacture products
This step involves processes like injection molding or 3D printing and assembly lines where workers combine finished products from components sourced elsewhere in the supply chain.
- Store product inventory
The next step in the e-commerce supply chain is to store product inventory. This means that you need a warehouse to hold all your products and a system for storing and tracking them.
- Plan delivery routes and routines
Once you have an inventory system in place, you need to plan how you will deliver your goods to customers. This includes figuring out what routes are best for different types of deliveries and how often they should occur. Some companies use their employees as delivery drivers, while others hire outside contractors or partners to help with this process.
- Deliver goods to customers
The final step in understanding the supply chain in e-commerce is getting your product from its warehouse into the world where customers can buy it. This may involve sending a truck with an employee driver to make local deliveries or hiring a third-party logistics company (3PL) that specializes in shipping large quantities of products across long distances using specialized vehicles like boats or trains.
Benefits of supply chain management in e-commerce
When you are operating in the e-commerce space, it is essential to have a solid supply chain management strategy in place. It is the only way you can ensure that your customers are getting the best possible experience and that your costs are as low as they can be. But how does it benefit you as an entrepreneur?
Here are few benefits of supply chain management in e-commerce:
- Reduced cost
Cost is a huge factor when it comes to e-commerce. When you consider the amount of time, energy and money that goes into developing, producing, marketing and distributing a product, the last thing you want to do is spend money unnecessarily.
E-commerce is a massive and growing market, but it is also very complex. By implementing supply chain management, you can reduce the cost of shipping, improve customer service, and more.
- Better customer experience
Your customers depend on you to provide them with the best possible experience, and they will tell everyone they know if you don’t. Supply chain management helps you keep your reputation intact by ensuring every product arrives on time and in good condition.
- Improved quality control
Supply chain management allows for more accessible quality control by monitoring shipments and communicating with suppliers about any issues that arise during shipping or production. This ensures that quality is maintained from beginning to end of production and delivery.
- Improved inventory management
With supply chain management, there’s no need for inefficient inventory management practices like overstocking or understocking because the system will monitor how much stock is available at each location, so you always have just enough on hand but not too much or too little.
- Improved delivery time
With a supply chain management system, you can predict the delivery time for your customers. This means that instead of guessing when your customers will receive their products, you can make an accurate estimation and send it to them.
- Improved communication between employees
You can create a communication platform where all employees can communicate with each other quickly and effectively in one place. A company wide communication system will help ensure that everyone stays informed and communicates effectively.
Real-world applications of Supply Chain Management in e-commerce
Understanding the basics of SCM is essential before you implement it in your business. Here are some examples of best practices and applications of SCM in e-commerce around the world:
- Keeping track of inventories
Amazon’s warehouse workers use a handheld device to scan items as they come in, which automates much of the manual data entry process. This allows Amazon to keep track of inventory levels at all times and ensure no gap exists between the arrival of a product and its sale.
- Monitoring supply chain with the help of data analytics
E-commerce giant Alibaba uses big data analytics to monitor supply chains, allowing them to identify trends in consumer behavior so it can better anticipate demand for specific products or services. This helps them improve their service levels and reach new markets faster than their competitors.
- Tracking food products with blockchain technology
Walmart recently announced that it would use blockchain technology to track its food products. This will allow the company to provide customers with more accurate information about where their food comes from and what’s in it.
- Identifying customers needs with AI tools
Companies use supply chain management in e-commerce by using artificial intelligence (AI) software. AI software lets companies know precisely what their customers want at any given time, so they can quickly meet demand without overproducing or underproducing products.
The supply chain management course available on the Online Manipal platform is a lucrative career choice. It combines the strengths of various disciplines, including business, technology, and the sciences, to give you a well-rounded education that will help you succeed in any field.
Whether your goal is to become a supply chain manager or another position within the field of SCM, there are many benefits to choosing Online Manipal. You will gain access to high quality instruction from professors who have real-world experience with the topics they teach. You will also have access to the same curriculum taught in-person at all MAHE campuses worldwide, which means you can transfer credits easily if you decide later on that you want or need to switch programs or schools.
If you are ready for an exciting new career as a supply chain manager, take advantage of this opportunity today.
- MAHE’s supply chain management program will help ensure that your customers get what they want when they want it, leading to happier customers and repeat purchases more often.
- Customers expect to be able to purchase items at any time, so it is critical that you have an accurate supply chain management program in place and that you can keep up with demand.
- With a robust supply chain management program in place, you will be able to reduce costs associated with shipping and storage, as well as increase profits through better pricing on orders.
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