INCREASING E¶COMMERCE EFFICIENCIES BLOCK BY BLOCK
individual orders and receive one shipment, David says. Customers who agree may earn incentives, such as coupons good for future orders. Companies can legitimately pitch this option as an environmentally friendly approach. At the same time, it cuts costs and enables businesses to use their ful llment and carrier capacity more ef ciently, David says. BUILDING FOR THE FUTURE To tackle the labor shortage, e-commerce organizations can diversify recruiting efforts and foster an environment in which all people feel welcome, David says. This can include reaching out to groups that historically haven’t been a focus of recruiting, like the LGBTQ community. Streamlining processes also can boost ef ciency. One seemingly simple example is placing items that are picked more often within easy reach. Sometimes there’s no rhyme or reason regarding which products go into which bins, so pickers wander back and forth, Waldrop says. When inventory placement re ects ordering patterns, pickers can work more quickly. While many companies had to quickly react to the e-commerce jump a few years ago, they now have an opportunity to ne-tune operations and build a foundation for future success. Leveraging this opportunity will prove key, as most consumers have become accustomed to rapid, accurate deliveries. “Consumer expectations don’t go in reverse,” Amling says. MAGICLOGIC: OPTIMIZING LOAD PLANNING From its headquarters in British Columbia, Canada, MagicLogic develops load-planning software that leverages powerful algorithms to optimize even extremely challenging loads. “We play a niche, but essential role in shippers’ e-commerce operations,” Smith says. Over the past 24 years, the company’s solutions have been installed in more than 3,380 applications across 51 countries.Many shippers turn to
Enterprises leverage technology to determine the optimal mix of fulfillment options for each order. Ship from the store or pull from a distribution center? E-commerce companies have to balance the need to manage costs and provide quality service.
a company chalks up a return in one area, management will ask how they can use the information the solution is generating to nd gains in other areas. JOINING FORCES To better take on the e-commerce behemoths, some small to mid-size retailers are banding together. Their goal? To lower costs and share capacity, Amling says. Quiet Platforms, a subsidiary of American Eagle, says it “levels the playing eld for small and mid-sized retailers by providing access to shared supply chain assets and relationships across every link of the chain,” according to a press release. The biggest challenge in this model often isn’t technology, but building trust between multiple retailers and carriers, Lakshmanan says. For instance, excessive inventory and poor order management can become embedded in the organization, draining ef ciency and boosting costs for all. Along with deploying technology, supply chain organizations can take other steps to boost operational performance. A growing number of e-commerce retailers are asking consumers if they’d like to consolidate
In making these decisions, e-commerce companies need to consider both optimizing costs and providing quality service, Lakshmanan says. For example, picking and shipping items from stores can be a way to quickly get products to customers, yet it also tends to be more expensive than lling orders in a warehouse. MINI WAREHOUSES “Dark stores” are an option when it comes to lling orders of dry goods and perishable grocery items, says Kirk Waldrop, managing director, operations transformation, with Grant Thornton. These mini warehouses are similar to grocery stores, but dedicated to lling e-commerce orders. This keeps e-commerce traf c from stores and establishes dedicated stock for online orders. Dark stores also add complexity, such as the potential need for a home delivery eet to deliver orders, Waldrop says. An alternative option is a transportation solution that drops these e-commerce orders at the stores. As companies implement automation technology, many are focused on gaining as much from their investments as possible, Smith says. Often, once
38 Inbound Logistics • March 2023
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