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Can Supply Chain Orchestration Help E-Commerce Realize Its Drop-Shipping Potential?

Posted by Martin Verwijmeren on Oct 25, 2018 10:34:22 AM

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With the rise of online sales, more and more retailers are striving to meet shifting customer expectations. Consider that 45% of consumers have abandoned a basket on a retailer’s website because of unsatisfactory or limited delivery options, according to a MetaPack survey.

No wonder retailers are shaking up their distribution networks and looking for more options.

While large items have long been shipped direct from suppliers, it’s becoming increasingly common for retailers to seek drop shipping options on smaller items and overseas imports as well. To do this efficiently, it’s necessary to share data on order lifecycles, inventory management and transportation.

Establishing not just visibility but also some control over third-party partners is vital.

Drop Shipping Grows in Popularity

FragileBecause larger products and goods require a lot of storage space and can prove costly to transport, many businesses choose to ship them directly from the supplier. This is also the fastest way to get goods into the hands of customers, as no one wants the expense of a large inventory. The same logic can be applied to smaller goods and an upturn in the number of e-commerce marketplaces has driven a lot of growth in drop shipping.

Although the benefits are clear, retailers are also relying upon suppliers to provide a good customer experience, and they must be careful to protect the direct relationship with the customer. A bad drop shipping experience is going to be blamed on the brand that the customer ordered through, even if it’s the supplier’s fault. To realize the benefits of minimal inventory and speedy delivery, retailers must also take steps to maintain visibility and control.

Supply Chain Orchestration Reduces Risk

By setting up a Control Tower, retailers can gain a big holistic view of their entire network that encompasses their own warehouses, in-store inventories, partner warehouses, in-transit goods and delivery options. With real insight into the lifecycle of an order, it’s possible to set standards that balance customer experience, operational efficiency and cost.

Retailers need the power to make changes and optimize individual orders in real-time to realize the maximum benefit. Supply chain orchestration empowers them to tailor every order for the situation, picking the right blend of partners and services to ensure customer satisfaction every single time.

Analytics Offer a Greater Advantage

The opportunity to capture data about every order and run analysis to determine where improvements can be made is very valuable. Retailers may uncover reorganization possibilities that allow for more efficient use of outgoing orders and returns to ensure every truck and journey is exploited to the fullest.

Simple manual tasks can be automated, speeding up service and freeing employees to focus their efforts where they’re really needed. Properly configured systems will reroute orders and ensure successful delivery based on parameters the business has set for time and cost. For true success in drop shipping, retailers must integrate and streamline the external labors of their partners until they run in perfect harmony with internal processes.


Topics: Supply Chain Trends, Supply Chain Orchestration, E-commerce Fulfillment, Supply Chain Execution





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