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E-commerce versus supply chain governance (disruption in the making)

The blueprint for the e-commerce supply chain is being written through trial and error, supply chain leaders must understand transformation.

E-commerce versus the consumer

E-commerce has taken the customer’s buying experience and pushed it further up the supply chain.  Nowadays, more customers are shopping directly from distribution centers (DC), meaning more consumer orders are being fulfilled directly from a DC than in the past.  Consequently, do we grow local DCs (brand presence) or do we fulfill orders faster to give the impression products are local (brand projection)? By removing the product selection constraint for consumers, we must remove the order fulfillment cycle time constraint, as well.  That being said, order fulfillment performance has greater influence over brand perception in the age of e-commerce.

The good news is that there are too many good options to solve the order fulfillment cycle time problem; the bad news is that no near right-sized e-commerce order fulfillment design exists to build from.  So, what do you do?

E-commerce versus the supply chain

If we are opening the doors of our DCs to consumers who expect a retail store experience, give them that experience.  Today, we have a much better sense of demand because consumer insights are no longer masked by manual processes and moderately effective VoC surveys.  We can see our customers' buying habits, real time...why not leverage that?  During training in the U.S. Air Force an instructor told my class we must "see more to be more".  We had to see beyond what was right in front of us to stay ahead of the unknowns. As supply chain leaders we cannot expect to continue delighting our customers if we apply the same supply chain practices of is the definition of insanity, right?  Find the connection between supply chain performance and customer outcomes and use it to deliver customer-centric solutions.

How will sourcing decisions today drive e-commerce order volume?  How will DC capacity management enable pivots in response to unplanned, supply chain stressors?  How will inventory accounting ensure adequate internal controls are in place to maintain accountability of smaller line item orders shipping due to e-commerce?  How will supply chains create visibility into last mile deliveries when the delivery is accomplished by a third party carrier?

Supply chain governance versus disruption

Companies like Zappos have transformed the returns experience for online shoppers so customers can buy multiple clothing sizes and return what doesn’t fit...up to a year later.  Companies like Amazon have raised the bar on delivery timelines (days to hours). Companies like Walmart have redesigned store stockrooms to increase capacity to support online sales.  Supply chain leaders are guiding the movement of goods in a time when how the goods are moved continues to evolve.  The blueprint for the e-commerce supply chain is being written through trial and error.  Supply chain leaders must understand emerging external factors; how e-commerce transforms their role in supporting the business strategy; what success looks like in an e-commerce environment; how to provide direction when the environment has high uncertainty; how to measure success amidst uncertainty; and how to create a culture that thrives in uncertainty for the foreseeable future.


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