Logistics Management’s Viewpoint on E-commerce: Leveraging available tools

Today, we’re all working to manage omni-channel order fulfillment while establishing a more efficient distribution and transportation network strategy to accommodate smoother inbound flow as well as next-day—or even same-day—delivery windows. To do this successfully, retailers, distributors, suppliers and manufacturers must innovate, adapt and evolve—or get edged out of their market positions.

In an effort to push the culture of innovation forward, Logistics Management has devoted this issue to helping readers get a firmer grasp of the current digital commerce realities and offer some practical solutions for better managing logistics at the speed of now. Kicking off this e-commerce focused collection is contributing editor Roberto Michel’s look at the technological tools available to help us work smarter.

“The analysts I gathered agree that logistics managers should be keeping an eye on longer-term developments that will reshape tomorrow’s possibilities,” says Michel. “However, they stress that shippers also need to think in terms of systems they can leverage today to make processes more efficient.”

Better use of data and predictive analytics, putting supply chain control towers and transportation management systems (TMS) to work, and leveraging the power of digital freight matching are just a few examples of tools at our disposal, but still largely under-utilized.

“TMS adoption is a perfect example,” adds Michel. “E-com is booming in the midst of a strong economy and trucking capacity is tight—and expected to stay tight. However, our research tells us that only one-third to one-half of our readers are up and running on a TMS—a solution that has been fine-tuned for more than a decade and now readily available from many vendors to open huge load-matching opportunities in the Cloud.”

Much like the list of TMS vendors has grown, our parcel express analysts say that as e-commerce continues to expand, so too will the selection of last-mile delivery options. In his annual “Parcel Roundtable,” group news editor Jeff Berman advises shippers to keep an eye on any new regional parcel players that may be uniquely positioned to help cut costs and improve speed.

“We’re learning that UPS and FedEx are keeping their eyes on new regional last-mile players and responding with new pick-up and drop-off points,” says Berman. “Our analysts suggest that these new entrants are winning business with price, so any shipper who can carve out a portion of their business and divert shipments may see some needed cost relief—but they must be willing to give it a try.”

One long-standing pain point that has been exacerbated by the e-com boom is the need for improved reverse logistics planning. As executive editor Patrick Burnson details, the return rate of e-commerce purchases is now about three times to four times higher than it is for brick-and-mortar purchases, and today’s fickle e-commerce customer will continue to drive that upward.

“Reverse logistics represents the biggest untapped opportunity for logistics operations,” says Burnson. “There’s customer satisfaction at risk, inflated costs at risk and the possibility of a missed, secondary revenue stream. But the good news is that an existing third-party partner may have a solution at the ready—just ask.”