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Importance Of Supply Chain Management In eCommerce

supply chain management in e-commerce

The Value Of Supply Chain Management In eCommerce

In recent years, the eCommerce industry has grown exponentially. The pandemic – while terrible – has helped this along. People now expect whatever they need to arrive at their doorstep! But building an eCommerce website is a huge task. You have to find resources, produce goods, transport them to distribution hubs, and then drop them off at your customers’ doors. Obviously, supply chain management in eCommerce plays an invaluable role.

The average eCommerce website development cost in India is about INR 2,00,000. However, this cost often fails to consider operational aspects related to the supply chain. A solid grasp of supply chain management and its significance will help you enhance your business. Let’s dig in!

What Is Supply Chain Management?

Supply chain management (SCM for short) is how you handle the flow of a product – from its raw components all the way to the consumer. All of the “links” in your supply chain need to be moving smoothly if you want to keep your customers satisfied.

Typically, an organization will establish a network of suppliers, each assuming a distinct role within the chain. One will acquire the essential materials, another will handle product assembly, and a third will deliver the finalized products to retail outlets.

Customers then buy the products from such shops. But what is SCM in eCommerce? In the realm of eCommerce, things work a bit differently. Since retail outlets are not in the picture, you are directly in contact with your end consumers. It is hence important to be mindful of their needs and proactively act upon the feedback you receive. It is also crucial to monitor the market and stay informed about fluctuating demand for your product.

Why Is Supply Chain Management In eCommerce Important?

1. It Improves The Customer Experience

When people make online purchases, they expect you to deliver their orders in just a few days. An efficient supply chain will enable you to meet these expectations. Understandably, your customers will be frustrated if their packages aren’t punctual. Similarly, if a product doesn’t reach them in impeccable condition, you can expect to receive complaints and negative reviews.

It is necessary to satisfy your customers’ delivery expectations. It is equally crucial to address their concerns promptly and professionally. By doing this consistently, you can build a loyal customer base. You can then use their positive reviews and referrals to attract more customers.

2. It Helps You Manage Your Inventory

When you don’t rely on retailers as middlemen, you will likely observe a lot of fluctuation in your demand. Furthermore, you will probably expand your product range. It then becomes necessary to optimize your inventory levels. Supply chain management in eCommerce helps you maintain a balance – you neither want to run out of products if they are in demand nor do you want to spend money on storing your excess stock.

One possible solution to the problem of inventory is to adopt a drop-shipping model. Within this framework, you don’t need to physically store every product in your catalog. Instead, you partner with third-party sources to procure products and send them directly to consumers.

3. It Assists You In Efficient Order Fulfillment

From placement to delivery, the order process is a complex one. It involves several steps and data elements, and it is challenging to make sure everything goes smoothly. SCM in eCommerce can help you manage all this data and streamline your process to ensure you make your deliveries on time. A notable benefit of streamlining your operations is that errors become less likely. With software taking up the bulk of the workload, it minimizes the margin for human error.

scm in e-commerce

4. It Becomes Easier To Manage Complex Networks

eCommerce is great because you are not bound by geographical constraints. This gives you the advantage of accessing the best suppliers, manufacturers, and logistics partners. However, it also means that your operations will extend across various regions. It can be challenging to manage a complex network such as this.

Supply chain management in eCommerce can assist you with this management. A robust software will be able to monitor multiple variables and put together an optimal plan for you. For example, if you need to complete several deliveries in the same area, you can assign just one person to handle them all. This will minimize both the time and money you spend.

5. It Helps You Estimate Future Demand

As mentioned previously, the demand for eCommerce products fluctuates much more than that of retail products. Leveraging supply chain management in eCommerce will simplify your task of predicting future demand. This will allow you to keep your inventory levels steady.

Technological advancements like artificial intelligence (AI) and machine learning now give computers the ability to handle large amounts of data. Your software will analyze different datasets and uncover emerging trends for you. With this information, you can make better purchasing and storing decisions.

6. It Facilitates Reverse Logistics

It is crucial to keep in mind that within the context of eCommerce, products can move in any direction along the supply chain. Some customers will inevitably want to return products at some point. Reasons for this could include product damage, incorrect sizing, or a color mismatch.

A fundamentally attractive feature of eCommerce websites is the capability to fulfill such return requests. A good SCM will help you manage returns, exchanges, refunds, and store credit while minimizing waste.

Looking For Supply Chain Management In eCommerce In India?

iTrobes is a leading eCommerce website development company in India that can help you out. Our expert team of developers will design custom strategies for your eCommerce website that extend to managing your supply chain. We have worked with various verticals such as insurance, transportation, and even fashion! Our responsive websites with contemporary graphics will help you generate leads in no time at all. Write to us today to get started!