The digital economy is disrupting the world as we know it. The meteoric rise of business-to-consumer retail e-commerce has sent shock waves throughout the industry. Now, the impact is reverberating beyond Amazon and eBay to affect business-to-business companies everywhere.
While retailers scramble to adjust to the new frontier of online consumerism and the modern supply chain, the logistics sector is saddled with the task of servicing those demands. The rapid expansion of e-commerce has created new challenges from which B2B distributors were previously insulated. Those that equip themselves with the right tools to forge ahead will have the best chance of staking their claim in the online space.
With the coming of any uncharted territory comes a deluge of new challenges to be faced, obstacles to navigate, and tough questions to answer. For B2B distributors, e-commerce intensifies the pressure to provide a web experience that pleases customers and keeps them loyal. What’s more, the majority of these companies are facing the issue of scale.
Think industry mammoths — the Amazons and Walmarts of the world. They have the size and resources to adopt the latest equipment and software as it comes to market, sharpening what is already a massive competitive edge. Yet even in a town that doesn’t seem “big enough for the both of us,” with the right mindset, e-commerce presents significant opportunities for B2B contenders. The time is ripe for B2B distributors to navigate a digital space that their peers might be too timid to explore. And the beginnings of that effort can be found right in their own warehouses.
The path to getting there involves the following three steps:
Improve inventory management. Recognizing this as a key to business success is step one. Look for ways to generate real-time data for optimizing the movement and storage of inventory, as well as enhancing the management of personnel and materials. Identify tools that can improve the bottom line by reducing costly shipping errors. In the process, you’ll be increasing customer satisfaction.
Enhance warehouse efficiency. This means understanding the factors that contribute to warehouse and fulfillment efficiency, such as visibility, organization, accuracy, and speed. Start by getting your facility in order. Look for boxes in the aisles, inventory scattered across bins, trash on the floor — all impediments to putting away and finding stock. More handling means additional labor, so design your processes to handle inventory as few times as possible. The solution is to review and refresh business processes, get the right technology in place to support them, and make sure every employee knows how to make best use of the system.
Identify and implement technology. This third and final step is essential to achieving better inventory management. Take warehouse management systems. Any company that doesn’t already see the benefits of a highly automated WMS should strongly consider adopting one. For those that are running on a WMS, evaluate whether there are additional features and functions that it make sense to add. Examples include built-in small parcel and less-than-truckload manifesting and shipping modules, or truck shipping with off-route, stop and delivery confirmation.
The tools provided with a WMS enable a level of speed and accuracy that’s not possible in manual, paper-based warehouses. Even distributors with small e-commerce engines report experiencing better receiving and shipping with a WMS, with high accuracy rates on line counts across the board.
The increased visibility provided by a WMS allows shipping departments to look at in-progress orders and alert carriers if any orders are remaining before the truck departs. When it comes to speed of order fulfillment, having the ability to quote shipping prices to customers upfront through an online store can be game-changing.
As the supply chain continues to evolve, robotics, the internet of things and other advances will continue to bring additional opportunities. The Pony Express days are long past. When it comes to B2B distribution, modern e-commerce demands a completely different breed of horsepower — and technology is that engine.
The rapid expansion of e-commerce has ended the era when stagnant warehouses and distribution centers were designed solely to meet demand created by retail store sales. The next evolution will require a complex technological infrastructure to support today’s booming internet economy. Companies that neglect to adapt do so at their own peril.
Eric Allais is president and CEO of PathGuide Technologies Inc., a provider of warehouse management systems for distributors.