Supply Chain Management

Competition is fierce among ecommerce order fulfillment 3PLs. As a result, 3PL companies must proactively support two initiatives to remain viable in the marketplace: 1.) Protect and retain their existing customer base; 2.) Aggressively pursue new business opportunities.

These two initiatives become more important as we see the growth of ecommerce slowing and inflation eating away at profit margins.  While the service providers must continue to do what they do best, they must also adjust to changing inventory/customer needs of both existing and new customers. In its simplest form, survival in the marketplace for an order fulfillment 3PL is about managing the inventory and adapting to customer’s inventory needs to keep and grow the business.

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The number of container ships parked off the Los Angeles-Long Beach port complex now total over 70. The reasons for the delays in the cargo off-load process are numerous and include: Read More

The pandemic has impacted nearly all parts of the global supply chain and e-commerce fulfillment is not immune to the condition.  Covid-19-driven consumer behavioral change has resulted in staggering e-commerce growth, which in turn, is putting tremendous pressure on e-commerce fulfillment centers (FCs).

The immediate impact has been FC demand almost exceeding capacity. The shortage of FCs is resulting in greater competition for limited capacity, which is driving increased rent. Labor and facility rent are the two most costly components of operating a fulfillment center.

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Robotic fulfillment solutions are a hot topic right now. There are numerous YouTube videos out there demonstrating how merchandise racks are autonomously moving about in fulfillment centers, on the backs of tiny robotic transport vehicles. These robots are taking merchandise racks to their human counterparts for individual items to be picked, packed, and shipped.

Large merchants like Amazon would have you thinking that nearly all their fulfillment centers operate with robots that pick, pack, and ship their merchandise orders. However, that is not the case.  Human hands are still picking, packing, and shipping most e-commerce merchandise orders in both large and small fulfillment centers across America.

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Online merchants, e-marketplaces,  parcel carriers, and technology advancements each impact the e-commerce value proposition. In simple terms, that value proposition is still based on an innovative service offering: one with multiple features and benefits that make e-commerce attractive to the consumer and drive purchasing behavior. Some of the primary components of that value proposition include:

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Amazon continues to drive change in the e-commerce arena, aggressively growing their next-day, Prime delivery initiative. Today, it is nearly impossible for most e-commerce merchants to offer the combination of free-shipping and next-day delivery to most of the continental US, without compromising profit using costly Express delivery services. However, by 2022, Amazon is on track to support affordable next-day delivery to most US addresses and, today, offers the largest on-demand, same-day delivery network, Amazon Flex, in North America.

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Understanding the current market conditions sets your business up for growth. When market conditions surge in either direction, companies need to make sure they can keep up with trends and remain solvent in an evolving market. Inventory management remains crucial for both traditional and eCommerce businesses amid fluctuations in the economy and supply chains. A careful analysis of supply chain availability helps businesses predict and prevent inventory shortages during periods when supply does not meet the demands of consumers.

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The order fulfillment process includes all of the steps a company takes between receiving a new order and delivering it to the customer. An effective order fulfillment strategy is key to ensuring impeccable client service, which builds a good brand reputation for your e-commerce business. About 38% of online customers say that a negative delivery experience will deter them from shopping at that online store again. To prevent such an adverse outcome for your online business, you must manage and implement key steps in the order fulfillment process. Here are some important order fulfillment terms and related pricing.

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