The complexity behind e-commerce fulfillment

Nowadays it’s crucial to master fulfillment’s complexity in order to capitalize the growth opportunities e-commerce has to offer.

The majority of consumers don’t know what happens between the moment they click on “place order” until it’s delivered. They would be impressed by the complexity generated by a simple click and the ability the logistics centers and carriers have to transform that same click in a successful order.

When we work at an e-commerce distribution center, we know how hard this task can become. As a matter of fact, e-commerce has significantly increased the complexity of distribution. What may look simple on the outside is extremely difficult on the inside.

First, we have the inventory challenge. E-commerce has forced retailers to expand their stocks in such a manner that there’s an overload in storage capacity. This overload may increase the assistance times since it involves browsing through more products to reach the right one. Smart product placement strategies may reduce this assistance time, but this can be hard to maintain as the products’ request changes. For those organizations offering support to omnichannel distribution the challenge is even bigger, since they have to manage stock and transportation between different channels.

Next, we have the speed with which orders must be attended. Consumers are getting more demanding, wanting to order today and receive tomorrow. That’s why orders must be removed from storage and shipped on the same day.

Finally, we have the concerns regarding distribution in large urban areas, traffic jams, tolls to enter urban zones and environmental worries in regarding transportation carbon footprint, all factors that have a significant impact.

By mastering these challenges, we’ll be creating a competitive differentiation, opening new markets and increasing profits.

Although it is recognized today as the main driver of business growth, e-commerce has played a significant role for some supply chains in the last fifteen years. Moreover, these chains have been leading for several years with distance selling by catalogue or mail-order, with which they have acquired vast experience and created work methods that later were adapted to e-commerce, reducing delivery times and taking assistance services to the next level.

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