Name Tania Nava

Roll No. HSBMS (H) – 344

Course BMS
Subject Logistics and Supply Chain
Management
Topic Suggest the supply chain
strategies to be used for E-
commerce business
 SUGGEST THE SUPPLY CHAIN STRATEGIES TO BE USED FOR E-
COMMERCE BUSINESS

WHAT IS SUPPLY CHANGE MANAGEMENT

Supply chain management is the handling of the entire production flow of a good or service — starting from
the raw components all the way to delivering the final product to the consumer. A company creates a
network of suppliers (“links” in the chain) that move the product along from the suppliers of raw materials to
those organizations that deal directly with users.

HOW DOES SUPPLY CHAIN MANAGEMENT WORK?

According to CIO, there are five components of traditional supply chain management systems:

1. Planning
Plan and manage all resources required to meet customer demand for a company’s product or service. When
the supply chain is established, determine metrics to measure whether the supply chain is efficient, effective,
delivers value to customers and meets company goals.

2. Sourcing
Choose suppliers to provide the goods and services needed to create the product. Then, establish processes to
monitor and manage supplier relationships. Key processes include: ordering, receiving, managing inventory
and authorizing supplier payments.

3. Manufacturing
Organize the activities required to accept raw materials, manufacture the product, test for quality, package
for shipping and schedule for delivery.

4. Delivery and Logistics

Coordinate customer orders, schedule deliveries, dispatch loads, invoice customers and receive payments.

5. Returning
Create a network or process to take back defective, excess or unwanted products.

WHY IS SUPPLY CHAIN MANAGEMENT NECESSARY FOR YOUR BUSINESS?

1. Interconnected Supply Chain

All the stakeholders from the producer, manufacturer, stockist, supplier, to the consumer are the main actors
in the supply chain landscape. They are interconnected and constantly ought to be in communication with
each other for a product to go through various hands before reaching its final destination. Considerable
issues pertaining to the growth of corporations, partnerships, global brand expansion, and outsourcing is
dealt with by Supply Chain Management
 2. Integrated & Co-operative Logistics
Supply chain management (SCM) is the lifeline of all critical supplies for the existence of all societies.
Effective supply chain meets the needs of both producers and consumers and takes an integrated & holistic
approach towards management. If operations across different geographies are cooperating and
communicating in synergy, this only makes supply chains all the more efficient. This facilitates the logistics
to easily manage every part of an integrated supply chain in supplying the inventory backed by more than
one entity.

3. Better Supply Chain for Better Business

Having an enhanced supply enhances your business prospects & sustainability. Delivering correct product &
correct quantity in a timely manner fulfills both producer’s and distributors’ requirements. Likewise,
consumers too want to obtain the goods that they want to be delivered to their doorsteps. Since the consumer
is the king, having an effective supply chain management provides direct improvement to consumer service.
This ultimately leads to better business growth.

4. Seamless Movement
A key reason for not being able to effectively deal with potential problems within their business operations
leads to a dearth of risk management capability for many businesses. Supply Chain Management streamlines
the flow of everything from goods to any unexpected natural disaster. Globally, every organization’s
logistics are managed by supply chain managers. With effective supply chain management, supply chain
managers can easily diagnose problems/disruptions for seamless movement of goods.

5. Reduced overall operating costs

Not just investing in the right areas of your business, but also minimizing extraneous expenditure wherever
you can, will help to maximize ROI. In other words, improving key areas of your supply chain will help you
reduce your overall operating costs. This will allow you to minimize purchasing expenses by expediting the
delivery of the right amount of inventory at right time to your warehouse and thereby avoid high inventory
costs. More so, for a manufacturer, optimizing the supply chain ensures the suppliers deliver crucial parts to
the assembly line when required. This helps avoid material shortages, which otherwise can hinder
production and waste precious financial resources. Consequently, an efficient supply chain helps minimize
delays, which is crucial for maintaining financial efficiency and efficacy. It directly improves your bottom
line by expediting product delivery and minimizing the cost involved per consumer and adds to your
competitive advantage.

WHAT ARE THE BENEFITS OF E-COMMERCE SUPPLY CHAIN MANAGEMENT?

There are an estimated 12 to 20 million E Commerce businesses as of today, with more being created every
day. This has led to a surge of competitiveness among E Commerce businesses. For long term success,
businesses not only require a user-friendly eCommerce platform but a well-connected supply chain as well.
eCommerce supply chains do not operate in silos. For them, proper supply chain connectivity during the
entire process, from procuring to delivering, is necessary to generate more leads, build relationships, and
grow sales. With a pandemic looming at large, we have seen strong demand for eCommerce and online retail
goods over the past few months. The aftermath of online shopping skyrocketing has laid the foundations for
a whole new buyers’ journey and the sellers have to adapt to the rising demands and increasing expectations
of the consumers. However, during the lockdown, many sellers saw long delivery delays, higher-order
cancellation rates, and were stuck with dependencies from single logistics providers and services from
Amazon. These findings reveal a good understanding of what has been happening to supply chains and
distribution. As a result, merchants and eCommerce businesses of all sectors need to find some reliable
supply chains and logistic partners to deliver their products on time. The following are the major advantages
of supply chain management in eCommerce:
1) Visibility across the entire network Supply chain management brings transparency in the network and
helps oversee the status of all the activities happening across supply, production, warehousing, and
distribution. This ensures a more comprehensive tracking and management of all processes from procuring
to shipping of finished goods to the end consumer.
2) Enhanced Customer Relationships:
Effective supply chain management ensures on-time deliveries, which makes a direct impact on
strengthening customer relationships. Furthermore, SCM aids the brands to keep an eye on customer
requirements. It makes sure that the business is attuned to the changes in the demands of the products and
services. An eCommerce integrated supply chain helps businesses get feedback and requirements about their
products directly from the consumers.
3) Cost reduction:
One of the principal reasons due to which the customers invest their time and money in eCommerce is
reduced costs. Probably, there are a lot of areas where business invests more than required. Some of such
areas could definitely be streamlined. It’s worth taking a look at your supply chain to recognize areas where
the costs could be cut down. E Commerce based SCM can significantly reduce costs in the supply,
production, and distribution processes, which, in turn, leads to higher profits.
4) Minimized Delivery Delays:
Delayed shipment from vendors, holdups during production, and logistic errors in distribution channels
massively impact brand reputation in the market. With an effective SCM, all activities can be coordinated
and executed from top to bottom. Minimizing delivery delays can prevent losing out on business and
streamline your image and relationships with the customer.
5) Scaling omnichannel practices:
A well-structured supply chain management in eCommerce facilitates omnichannel engagement that
ultimately leads to increased customer engagement on all major platforms. eCommerce businesses in an
omnichannel environment pretty much conclude the new shopping touch points of the majority of consumers
today. It is incredibly crucial for brands to consider customer convenience and expectations first. And, it
starts from the very first step of the supply chain. An adequately managed eCommerce supply chain assists
brands with an omnichannel scaling of their businesses and expands their selling horizons with content
customers spread across channels.
SUPPLY CHAIN STRATEGIES FOR ECOMMERCE BUSINESSES

 Strategy defines your fulfillment organization’s long-term goals in alignment with the business
objectives and how you’re going to get there. The most effective fulfillment strategies are integrated
or synched up with the company’s overall business plans and goals. 
 Tactics  are more specific activities involving the assessment of the problem, the development of
options and a sound decision to proceed. Tactical decisions are then made developing project plans
and tasks, using appropriate best practices, identifying the resources needed to achieve the end result
of the strategy and starting initiatives to implement. 

STRATEGIES FOR BETTER E-COMMERCE

1. Make the inbound Supply Chain more efficient

Regardless if you’re an omnichannel retailer or a pure play ecommerce business, getting inbound products
and materials on-time and as ordered is a major initiative in many companies.  Your objective should be to
receive the product so that it can flow through to put away or be cross docked to fill orders.  

1. Assess what current problems exist and what costs are absorbed in reworking non-compliant receipts
in both the fulfillment center and back office. 
2. Determine which vendors cause the majority of the delay and cost problems.  
3. Implement tighter computer systems between vendors and your company through EDI.
4. Implement vendor compliance programs.
5. Determine what inbound and fulfillment activities such as ticketing, final inspection can be done
cheaper and faster upstream in Supply Chain.
 6. Determine how receiving dock and truck yard congestion can be reduced or eliminated.

2. Lower shipping cost and delivery time

Your customers expect you to compete with Amazon in terms of delivery time frames. Be responsive by
getting their orders to them quicker and at a lower shipping cost.  

1. Investigate multi distribution channel operation. Make sure to take into account costs to set up the
operation in terms of additional facilities, staffing, and management

3. Increase paperwork accuracy and decrease processing time

One of the foundation technologies for warehouse systems and automation is implementing bar code
technology.  Barcodes let you track the “what,” “who,” and “when” for all activities within the warehouse’s
four walls. Making barcode usage one of your first strategies will pay immediate and future dividends.

1. Use barcode technology in areas such as receiving, put away, replenishment, picking, packing,
shipping/manifesting, returns, cycle counts, value-add functions, and labor tracking

4. Invest in technical solutions

Technology has changed chain supply management for the better. It has allowed for easier communication
between companies and customers, increased the speed of certain processes, and reduced the number of
errors made.

Allotting money for business software programs helps reduce manpower costs and processing times.
Ecommerce businesses should thus automate where they can, particularly back-office systems such as
administrative processes and accounting work.
 5. Establish client-first customer support
Some businesses don’t see customer service as an aspect of the supply chain. But a supply chain isn’t
finished until the customer successfully receives their product. 86% of customers are willing to spend more
money on a product if they receive good customer service.

This is why you need to have a stellar customer support program that caters to their concerns as immediately
as possible. This experience will ultimately drive the business forward.

Customers expect quick shipping, a competitive price, and a high level of responsiveness to different
customer needs, which puts a VoIP service at a high priority for ecommerce businesses. Support channels
make up a great part of customer satisfaction and retention, so making them available at every instance can
become a vital advantage.

Apart from improving communication, to establish a client-first support system, you need to consider
customer feedback. This can educate you on what you’re doing wrong or right along your supply chain,
whether this is feedback on your website design, actual product, or shipping process.

REFERENCES
Supply Chain Management
Importance of Supply chain
Strategies for better E-Commerce
Better E-Commerce through efficient supply chain
Supply Chain Management