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E-Commerce: how delivery pressure invites to invest in automation and integration

Esther Smit - SAP Supply Chain Expert |

The phrase: “order before 23:59; next day delivery!” is no longer an exceptional promise, while same day delivery options become more common as well. These complex operational challenges form the need for automation and integration of the supply chain.

Shorten delivery time places increased pressure on logistics employees that need to fulfill these orders within a shrinking time frame. On one hand the processes are increasingly complex due to a variety in offerings and service, while at the same time the speed of delivery and throughput time has to increase. On the short term it is inevitable that operational costs will rise combined with tightening margins in order to fulfil these customer demands.

These complex operational challenges eventually form the need for automation and integration of the supply chain. Making the right investments in technologies can improve efficiency, enhance services, and finally increase productivity at lower costs. A matching IT solution increases responsiveness and agility of the supply chain while ensuring the required flexibility that is crucial for organizational survival.

No insights in the supply chain? Aim for integration

Organizations that are well informed on their supply chain are able to track inventory, map workload in the warehouse, and are fully informed on outstanding deliveries. Visibility is needed to run an efficient operation. This way, possible shortages or quality issues can be encountered in timeA crucial part of this is the integration of the different parts of the supply chain into one system that is able to provide the correct information for each level in the organization. This is essential for efficient supply chain performance. The steering of warehouse activities will shift from reactive to proactive, providing the opportunities for greater optimization. IT investments should therefore be focused on integration of the different departments and stakeholders and should be aimed at quick, preferably real-time information exchange.

Lots of last minute changes – Plan ahead

The flexibility of an operational department to respond to last minute changes is an integral part of a good buyer- supplier relationship. The right technologies help to keep these relationships intact or establish new ones. Manual procedures are too slow and insufficient to deal with these last minute situations. Instead, the right warehouse system makes use of smart tools assisting in the execution and optimization of daily activities, leading to decreased response times. It utilizes data to determine whether a product is a slow- or fast mover, proposing the optimal storage location for a product. Activities are much more closely managed, so focus can shift to managing processes instead of products. The system will filter the right information for you, and is able to process it further with specialized technology. One could think of a ‘warehouse monitor’; a convenient overview of all active processes and from where operations can be started. But also the rise of sophisticated apps and scanners will make sure employees can easily adjust their activities based on real-time information and renewed priorities.

Technological progress– Get aboard!

Digital transformation is an ongoing process. Once a consumer domain, wholesalers can now no longer ignore the impact of e-commerce on their markets. Continuous developments trigger constant changes, driven by the growth of digitalization in business models and innovations, for instance on the Internet of Things. It is therefore important to determine a strategy that allows for real time information to be leading in decision making and that supports the growing need for flexibility in an integrated supply chain.

Set your course!

Automation and flexibility, this combination sounds contradictory, but they have more in common than you might think. Only by accessing the right information you are capable of making the right decisions that lead to flexible processes without unnecessary actions. Automation should be initiated by the operational processes, not the other way around. By using real-time information as input for automated process-steps, you will be much more responsive to shifting customer demands. A well designed WMS provides the right insights, supports employees in their daily work and allows you to achieve a level of automation fit for the job. On a higher level, management is provided up to date insight needed to bring balance to labor and workload.

 “An efficient warehouse is managed by a system that allows you to anticipate”

So how can you satisfy the online shopper? Leverage the right IT-solution to support your operational processes to gain back control and deliver in time!

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