HOW RETAILERS CAN USE TECHNOLOGY TO LOOSEN SUPPLY CHAIN CONSTRAINTS
Trying to fulfill online orders while relying on a shaky supply chain can be frustrating for retailers hoping to take advantage of the e-commerce boom.
One missed step, and a package may arrive late— or not at all. Those are high stakes for retailers whose reputations are based on trust and keeping promises, including delivering goods to homes and businesses on time.
But many retailers that have been affected by supply chain bottlenecks are responding by reimaging how goods move from factory to buyer, according to Melissa O’Keefe, group director of e-commerce product development and innovation at Ryder, a leading transportation and logistics company.
“Many companies are building resiliency and redundancy into their logistics networks,” she said. “They’re rethinking just-in-time inventory strategies. Companies are reconsidering their e-commerce growth trajectory, and they’re planning to ensure they have capacity to meet their e-commerce business growth. Many are expanding their operations to add fulfillment capacity in new geographies that get them closer to their customers.”
Understanding The Challenges
E-commerce sales totaled $222.5 billion in the second quarter of 2021, increasing 9.1% over the same quarter in 2020, according to government data.
While the growth is welcomed, it ushers in huge logistics challenges for companies. Getting an order to a customer’s doorstep requires an intricate order fulfillment process, from the time the retailer receives an order all the way through shipping and processing returns.
“All of this growth has resulted in constraints in the e-commerce logistics partner networks,” O’Keefe said. “There are constraints in parcel delivery. Residential shipping carrier networks have faced capacity constraints in the past year. We’ve seen significant increases in costs and also peak surcharges that apply.”
Limited warehouse space and labor shortages only compound the problem, and some consumers are feeling it in the form of long delays to get their merchandise—with delivery taking several weeks or even months in some cases.
Pursuing Digital Solutions
One of the most effective ways retailers can increase their fulfillment capacity is by working with a logistics provider to digitize their e-commerce fulfillment operations. By outsourcing operations, retailers can take advantage of the industry’s latest technologies, O’Keefe said.
Some logistics providers now use autonomous mobile robots to improve the efficiency of their picking operations, augmenting their workforce and reducing labor demands.
Ryder has leveraged APIs to streamline data sharing between its technology platforms and its customers’ systems. The company has added:
• Robust order management capabilities • Inventory management alerts that help
• Back-order management capabilities
• Order sourcing rules that allow business customers to manage their orders using their own rules across geographically dispersed fulfillment centers
Ryder has also developed a new customer portal to give companies visibility into their entire fulfillment program, allowing them to take action on information that is constantly being updated.
“The goal is to provide easy access to our customers so they know what’s going on with their orders, with their inventory and with every aspect of their fulfillment program,” O’Keefe said.