No matter which area of your logistics you’re planning, there are some simple strategies that ecommerce businesses can employ to improve logistical functioning across the board. Here are some tips for streamlining your entire logistics operation which will also help future-proof your supply chain.
Distribute your inventory across multiple locations and regions when it comes to improving logistics
Splitting inventory between multiple, strategically placed fulfillment centers will place portions of your product much closer to certain pockets of customers than it was before (this is easy to do with a 3PL).
From there, orders are automatically routed to and fulfilled from the center closest to the order’s destination point.
This cuts back on shipping distance — which reduces the shipping cost — and shortens shipping time, which delights customers, increases conversions, and encourages repeat purchasing. If you can manage it, distributing inventory saves time, money, and effort for both you and your customer.
The other benefit of distributing inventory is that, by splitting your SKUs between locations, you avoid putting all your eggs in one basket. This way, you’ll protect your inventory in case of a disaster affecting a warehouse or fulfillment center (or even in severe weather events when carriers can’t pick up), and ensure that you can meet some customer demand, particularly if your products are essential.
However, before you plan your logistics around distributed inventory, there are some qualifications to consider. Distributed inventory is the best fit when:
- A business’s AOV and profit margins are high
- Products are heavy or bulky
- Customers are spread out across the country (or world) rather than consolidated in one region
If any are true of your business, you should then consider how exactly to execute your strategy. Partnering with a 3PL is often the most cost-effective option for achieving distributed inventory, as you don’t have to purchase or rent in a warehouse yourself.
Forecast demand to meet increased expectations
Forecasting demand is critical for logistics planning, because your ability to deliver the right product to the right customer at the right time hinges on having enough inventory to meet demand.
When you can accurately predict demand levels, you can make sure that you don’t accidentally over or understock any SKUs, both of which are detrimental to your business’s efficiency and bottom line.
Beyond meeting customer expectations, inventory forecasting affects everything from your budget to your production timeline to your storage costs to your inventory turnover. Because of this, you should always factor demand forecasts into your logistics planning so that miscalculations or assumptions don’t derail your entire operation’s efficiency.
Some 3PLs make demand forecasting easier than others. Launch Fulfillment, for example, lets you:
- Track real-time inventory counts, historical sales data, and advanced analytics to discover new patterns and identify seasonal, geographic, or product-related trends.
- Use these insights to achieve more accurate demand forecasts and guide logistics planning for the future, without the stress of tracking important metrics manually.
Don’t rely on one carrier for shipping and transportation
If you only have a relationship with a single carrier without a backup plan, unforeseen issues with that carrier could wreak havoc on your business.
When planning logistics, it is important to research different carriers — taking into account their location coverage, costs, 2-day capabilities, technology, and reputation — and use a combination.
Do not discount regional parcel carriers either, as they could be more economical than larger carriers like DHL or FedEx, and might be able to offer customizations or reach locations that bigger ones can’t.
For larger shipments or transporting finished goods to warehouses, consider all forms of distribution and transportation, including air and ocean transport. Depending on how big, bulky, or perishable your products are, one of these options may be better than standard ground transportation.
However many carriers you choose to ship with, partnering with a 3PL can usually snag you cost-savings in shipping and transportation. Because of their size, 3PLs like Launch Fulfillment can negotiate far more effectively with carriers for discounted shipping rates, which they pass on to their customers.
Leverage modern logistics technology and software
Modern technologies make it much, much easier to both optimize your current logistics operations management and “future-proof” your logistics going forward. Software like an IMS and WMS streamlines and digitizes critical functions like order processing, inventory management, storage, and fulfillment, which keep daily operations efficient with less effort.
These platforms also come with tools that make logistics planning simple: real-time inventory tracking, for example, helps keep demand forecasts accurate, and automation in order processing and warehouse functions lower labor costs and increase order accuracy.
These platforms should also automatically gather and record data for future analysis, and store it in one place for easy access at any time. Launch Fulfillment’s merchant dashboard was designed with this in mind — specifically, it integrates directly with your ecommerce platform so that you can see all your information in one place.
Our technology is full-stack and implemented in each of our warehouses, so you don’t have to worry about juggling different tools and platforms to manage different locations.