As entities such as Amazon and Walmart increase in popularity, e-commerce merchants must find a way to compete. By improving the customer experience, reducing expenses, and improving operations, as well as increasing e-commerce fulfillment efficiency, merchants strive to not only keep up – but exceed the success of the “E-Commerce Big Dogs”.
In an effort to assist e-commerce merchants in their endeavor, we have put together a number of ways to improve performance and make fulfillment operations more efficient.
Is Outsourcing an Option?
By outsourcing e-commerce fulfillment to a 3PL (third-party logistics provider), numerous small to midsized companies have found it to be a competitively priced, high service option to the following:
- Adding fulfillment centers
- Internal fulfillment
What this accomplishes is a more cost-effective way of achieving “closer to customers”.
New System Implementation
Are you sure that you have the right platform for growth through your current warehouse software? Perhaps tools of a stronger nature are needed including the following:
- Slotting and multiple-level kitting
- Improved management of inventory and orders
- Interfaces to automation
- ASNs (advanced shipping notices)
- Labor productivity and management analysis
Multi-DC Strategy Consideration
A multi-DC strategy should be investigated to get orders to customers at reduced shipping costs and at a faster rate. By placing inventory closer to customers, the shipping costs are reduced. Through better customer satisfaction, sales are improved. A competitively priced, high-service option to expanding your own assets or internal fulfillment is outsourcing to a 3PL.
Study Your Packaging Supply Costs
A study should be conducted by your box suppliers focusing on reducing dunnage and number of cartons. To save space, can they offer just-in-time delivery and storage?
Sensible Application of Automation
A number of factors will come into play here including unit volumes and order volumes. With an evaluation by a consultant looking at how best to accomplish and implement automation strategy and your operation in general, it will be easier to figure out what type of synergies can be achieved.
Improve Managers’ Bench Strength
Everyone’s productivity is affected by managements’ effectiveness. An evaluation of each manager is needed to find out not only how they can improve, but how their overall e-commerce fulfillment staff can achieve higher quality and productivity. A computer course or industry leadership training may be called for here.
Employee Turnover Reduction
In terms of losing experienced people and expense, excessive employee turnover can affect your bottom line. Figure out why people are leaving, if they are. Are you giving your employees incentives with opportunities to advance and assisting them with career paths?
Effective Slotting and Picking
Do you have any idea how much time is spent by a picker when traveling from one FC location to the next? As much as 60 to 70% of their time! You can lower your cost per unit picked with effective slotting to reduce travel. Another tactic is, based on product cube and sales velocity, right-sizing pick lots.
Other steps that e-commerce merchants can take to make their e-commerce fulfillment efficiency greater are as follows:
- Increase productivity
- Reduce freight costs
- Compare service level metrics
- Increase cost per order comprehension
STC Logistics can help with not only the process of improvement but with helping to keep it consistent, once it’s been initiated. If you’re not sure where to turn, but know that improvement is needed, consult one of our experts today. We can help with all of the above, and more.