Startups want to get big, and SMEs want to get bigger. But no matter your industry, idea or product, no company can scale up without efficient supply chain management.
It isn’t what you do, it’s how you do it. It’s one of the fundamental pillars of managing a successful business. You can create unique products that sell and provide incredible services that leave your customers wanting more. However, if you don’t sort out how to improve your supply chain management – it is all for nothing.
So let’s review.
- Make a Report
- Track These KPIs
- Implement Changes
What is Supply Chain Management?
Managing your supply chain is about three things: Product, Information and Cash.
Your supply chain starts from the supplier (or manufacturer) and ends with the consumer.
- This flows from supplier to consumer in one direction
- Cash goes along the supply chain from consumer to supplier
- Travels both ways
Supply chain management is the process of optimising the exchange of product, cash, information or a combination of all three. A strong supply chain should be as quick and reliable as possible without paying unnecessary extras along the way.
Why is eCommerce Supply Chain Management So Important?
You are constantly either producing (or arranging the manufacture of) your products. Meanwhile, there is a steady stream of consumers that want your product. Any friction points along your supply chain can inhibit your profits and the service you produce.
With bad supply chain management you see:
- Delayed delivery times
- This can lead to a lack of repeat customers, bad reviews and even returns
- Breakdown of organisation
- When multi-channel selling goes wrong, it goes really wrong. This can lead to misdelivered orders and general chaos within your inventory
- More expensive operating costs
- Supply chain management isn’t just about organising, it can also reduce your operating costs. A bad supply chain will inevitably incur more fees.
- Less accurate financial forecasting
- Financial forecasting is essential for startups to see how much they will have for future investments. With an unreliable supply chain, it becomes that much harder to plan ahead.
Clear, organised supply chain management takes care of all of these problems. It can lead to cheaper logistics, tidier inventory and more satisfied customers!
How to Improve Your eCommerce Supply Chain Management?
Make a Report
It won’t fix things by itself, but it will help later, trust us. Not only can you use the report to answer some of the questions down below, but it can give you a visual representation of your supply chain. A supply chain audit, even done by yourself, gives you vital information such as products, operations, spending, cash flow and outgoings.
Track These KPIs
Supply Chain Cycle Time
This value will demonstrate how quickly you can fulfil an order at zero inventory. The quicker the supply chain cycle time, the better your supply chain, and you can use your initial value as a way to determine if your efforts are paying off.
Cash to Cash Time (C2C)
How quickly can you get paid, and how quickly can you pay? This metric is particularly essential if you are dropshipping, or reselling products to Amazon or through Amazon. Is it quick and easy for customers to pay you, and is there a delay between that time and you paying your suppliers for the product?
How quickly can you deplete your inventory in a set time period? This metric is also an excellent indicator of many other parts of your business, but it can potentially highlight supply chain management issues too.
Simply divide your Cost of Goods Sold (COGS) by your average inventory.
Your fill rate is the percentage of customer orders that you fulfilled without resorting to back orders or cancelled sales. It is the total number of orders successfully filled within a time period divided by the total number of orders placed, and then multiplied by 100.
Perfect Order Index
The Perfect Order Index is considered to be the overall result of your supply chain management. While it will not highlight any particular problems, the POI will gauge your supply chain’s health.
The POI calculation is: (% of orders delivered on time) * (% of completed orders) * (% of orders of the right quality/damage free) * (% of orders with accurate documentation) * 100
Research and planning is great, to start with. However, to optimise your supply chain management you need to execute essential changes. These points vary from business to business and from industry to industry.
When it comes to eCommerce supply chain management, there are several options – and one involves selling through Amazon.
Amazon’s Supply Chain is the Strongest in the World
There’s no question about it, Amazon wins hands down. They receive 18.5 orders a second, so without a reinforced supply chain, they would be ruined within a couple of minutes.
But they aren’t. Their sustainable supply chain is not only strong, but it’s getting stronger for a number of reasons. Reasons that you can examine and learn from.
Let’s take just one example.
Product barcodes and labels on Amazon and the stringent chargebacks involved with them have improved their supply chain management massively. If a Vendor’s barcodes aren’t up to scratch – Amazon charges them. It’s a simple, easy way to guarantee up-to-date, viable barcodes up to GS1 standards.
Now, this is a small implementation, but with Vendors using acceptable barcodes, Amazon was free to use AI technology. Now, software can do an enormous workload in a blink of an eye. Pallets are scanned, cross-referenced against purchase orders and logged into the systems. They’ve cut out thousands of man hours thanks to a simple little tool.
What if you could improve your supply chain management with another simple little tool?
Get the Right Software for Your Supply Chain
Automation is key.
The eCommerce industry is rapidly evolving at every moment, and now with consumers used to the idea of 24-hour delivery, the demand for optimised supply chain management is more essential than ever. Automation is the trick to competing in an already competitive industry.
You need software that works with Amazon to bulk upload your entire inventory in an instant. One that gives you total control over inventory management and order metrics on a simple, easy-to-use platform that’s responsive. With advances in your operational efficiency, your supply chain management will improve.
That software is Seller Central Connect.
Not only does it automate the vast majority of laborious tasks, it also strengthens your supply chain with its automotive capabilities. It can also automatically reprice your products to win the Amazon Buy Box too. That won’t help your supply chain by itself – but it will certainly boost the number of orders you receive!
With a strengthened supply chain to cope with higher numbers of customer orders within your designated time limit, you’ll scale up in no time. Get in touch with one of our specialists today for more information on how you can use Seller Central Connect. Remember to check out our resources page for the latest guides and helpful tricks to succeeding in business!