E-commerce demands supply chain attention


The ability to make purchases online has transformed retail. For every easily observed change in the business of sales, however, there are many more behind the scenes. For example, retailers need to update their supply chain management strategies to optimize e-commerce revenue.

This change starts with the transaction management software underlying the company's website and extends all the way to warehouse management, where decisions must be made concerning how to store products for online sales relative to those for in-store stocking.

Warehouse questions

The problem of warehousing in a multi-channel world is clear and immediate. Sending some inventory to stores and some into the hands of consumers calls for a complicated set of procedures. Retail World recently took stock of the situation and discussed various resolutions. Some large companies, U.K. retailer Sainsbury's among them, believe in a unified view of the supply chain

"We merge online and in-store demand, which drives efficiencies across the end-to-end supply chain through a single operation. If demand was separated for each it would duplicate processes and system settings," Stephen Hayward, Sainsbury's supply chain manager told the source.

One factor contributing to weakness in the e-commerce supply chain, according to Retail World, is budget priority. Often, software insider Oliver Rhodes told the source, companies focus on building an e-commerce website and have little budget left over for supply chain management. The customer, unaware of the situation, will still expect prompt service from the supply chain.

Global challenges

As the E-Commerce Times recently reported, the processes behind an e-commerce-enabled supply chain become even more complex when applied to a global company. In addition to all the challenges that face other companies - warehouse management questions, secure transaction management and rapid integration - such firms also need to contend with the peculiarities of cross-border business operations.

According to the source, the extra requirements faced by international retail include deep knowledge of laws regulating imports and exports, as well as accurate calculations of taxes and duties on all goods moving across international borders. These additional considerations add to the importance of supply chain management within a company, and the budget and time that should be devoted to it.

In a marketplace that is fully digitally integrated and an environment that has rapidly globalized, supply chain management has become more important than ever. With special considerations needed for a variety of new variables, the field has evolved.