By now, we know that the world will never be the same. However, there are some silver linings as several industries will expedite the adoption of new tech. E-commerce is one such after emerging as a lifeline for millions stuck at their homes due to lockdowns.
Based on the learnings so far, we must acknowledge that the e-commerce supply-chain has changed for good as a result of this. Here are some recommendations by to design - or redesign - the future e-commerce supply chain.
Diversify logistics resources
We expect fluctuations in courier serviceability, due to many localized or nationwide reasons. Thus, it is important to diversify your courier partners to reduce the risk of a sudden downtime in the supply chain. This would give ample alternatives.
Technology also allows us to identify active pin-codes over APIs and deploy sophisticated algorithms for courier selection. This brings immense efficiency to courier operations.
Tracking that order
Since delays in logistics would be higher than pre-COVID-19 levels for quite some time, e-commerce companies should also consider activating order tracking notifications to keep customers updated. It is seen that an update message on the order tracking page reduces WISMO (where-is-my-order?) calls by up to 60 per cent.
Additionally, a consumer is expected to visit on the tracking page almost 2.4 times for every order. Thus, it is a great opportunity for e-commerce companies to cross sell other products. Research indicates that upto 1 per cent additional sales can come from this page.
Another important consideration is consumer awareness. In the “out of delivery” notification, you should mention the safety precautions being taken by logistics partners to provide confidence to customers to accept the delivery and avoid RTO. Such a message can also communicate best practices to safely pick the order.
Lastly, exceptions such as delayed or stuck shipments could be a norm in the future. Use of advanced monitoring algorithms can ensure that almost 80 per cent of such exceptions are identified before they become a major issue. These have seen a wide adoption even by smaller companies, since variability in logistics has reached an all-time high.
The same goes for cases of failed delivery attempts.
A warehousing makeover
Warehouses need to start with a limited workforce which works with appropriate PPE kits. There should be protocols and arrangements to regularly check employees’ temperature and sanitize the facility on a daily basis.
Another strategic step is to reevaluate the operational planning in the wake of COVID-19. This helps in optimizing resources and increases throughput. To start with, prioritize stock processing depending upon several factors, including service level agreements, courier partners, and order priorities, etc.
It is also important to ensure rule-based stocking driven by parameters such as SKU velocity and product category, etc. in the warehouse, instead of random selection by staff based on their convenience. Having pick-path optimization and implementation of put away strategies lead to higher productivity.
Gains across the board
Digital connectivity at warehouses cuts down operational cost and time, thus giving a boost to productivity. Several functions such as picking, packing, quality control, inwarding and other warehouse operations can be automated through digitization. This ensures error-free delivery of goods to consumers.
Some other new-age solutions are using RFIDs scanning over traditional barcoding systems and real-time communication between WMS and existing ERP/POS systems. Additionally, equipped with voice terminals and hands-free operating, employees can complete their tasks effectively, while ensuring their safety.
Digitization also ensures that an e-commerce company has full visibility on key metrics of warehouse operations, such as per person productivity, fulfillment metrics, space utilization, etc. These are some important steps towards modernizing the warehouse to meet the requirements of a new world order.
Geographical diversity through regional warehouses, in addition to a primary warehouse, adapts locations closer to the consumers. This enables shipping from stores, supports local commerce and hyperlocal deliveries.
Moreover, the warehouse can also share real-time stock/business updates across multiple locations.
As we slowly emerge from the lockdown, there is a consensus that the fight against COVID-19 will be a prolonged one. Thus, the importance of e-commerce will increase. It is important for e-commerce companies to emphasize on future supply chain planning in their boardroom discussions.
- Naman Vijay is CEO of ClickPost, and Kapil Makhija is CEO of Unicommerce.