You likely own a number of products—maybe even the device you are reading this article on—that were manufactured in China. As markets become intertwined on a global scale, the way customer demands are being supplied is getting redefined. Raw materials, labor, and production can be obtained from a dynamic range of sources as businesses large and small look for the lowest costs. However, getting a product made cheaply across the ocean doesn’t help unless you have a way to get it to a customer ordering from, say, New York City.
This is why supply chain management is incredibly important to the growing e-commerce sector. As production takes on a more global field, coordination and control of the flow of a company’s goods becomes all the more integral to ensuring smooth and productive operations.
The Necessity of Supply Chain Management Strategies
To heavily summarize, supply-chain management is the organization of all of a business’s activities relating to obtaining raw materials and the manufacture and distribution of finished products. When a product is introduced and offered to customers, not only must enough of that product exist to meet consumer demand, but it also must be capable of getting delivered to the customer in as cost-effective and timely a manner as possible.
Remember that e-commerce exists outside of brick-and-mortar locations. Although this field has several advantages, it also comes with the challenge of lacking a primary delivery location. Instead of needing to arrange the supply chain so goods flow towards pre-determined outlets, e-commerce demands flexibility and agility to send items directly to the customer’s home.
Adjusting Inventory
Effective supply-chain management in the e-commerce field revolves around how inventory is managed. As mentioned above, the flow of products in e-commerce has to be reactive and able to send purchases out in response to customer orders. Achieving this requires having a pulse on the flow of consumer demand while maintaining a supply-side mentality. How much of one product should be warehoused and kept on hand versus only being produced when a customer orders? Is existing production scheduling enough to meet anticipated demand or does it need to be adjusted for seasonal spikes and dips? These are just some of the considerations involved in proper supply chain management.
Another key element is easy visibility of the entire supply chain so you can have a proper sense of demand, inventory levels, production levels, costs, and the overall flow of goods. Balancing the management of inventory and production so that neither grossly outpaces consumer demand yet has enough wiggle room in case of unexpected changes is a delicate dance that requires a supply chain’s manager to stay informed in as real-time a manner as possible.
APS Fulfillment, Inc. is a specialist in direct-mail marketing and warehouse fulfillment and is based in Miami, Florida. We’ve stored, sorted, and delivered products of all shapes and sizes for all kinds of companies and are more than prepared for the exciting challenges waiting in the new year. Contact us by phone at 954-582-7450 or by email at [email protected] for more ways third-party warehousing and fulfillment services can support and grow your business.
