The unique demands of e-commerce are very different to traditional retail channels, and distribution operations must be specifically tailored to reflect this. Key to an efficient e-fulfilment operation, is perfecting the design and process flows to optimise layouts, workflows, resources and systems in a 24/7 picking operation.
The Supply Chain Consulting Group (SCCG) team of Specialist Supply Chain & Logistics Consultants are experienced in e-fulfilment logistics projects, having worked with leading online retailers.
Examples of projects the warehouse and distribution centre consultants have carried out for purpose-built e-fulfilment pick, pack and despatch include the European logistics centre for Global e-commerce retailer Bodybuilding.com, the case study for which can be read by clicking here.
In addition SCCG was awarded a contract in 2018 to fully design and cost and subsequently programme manage the automation procurement, fit out, implementation testing, and commissioning of a new fully automated purpose built 250,000 sq. ft. e-fulfilment and distribution centre in the UK, for a sizable on-line retailer, to go-live by 2022.
The demands of e-commerce are very different to more traditional sales channels and the standard or more traditional warehouse and distribution operations (however sophisticated) are not always set up to deal with e-fulfilment operations.
The exclusive video interview below from Bodybuilding.com demonstrates the benefits of a purpose built e-fulfilment distribution centre, the specific operational requirements for e-commerce and the speed and volume at which orders can be processed with relatively low staff levels.
It is all about the design and process flows to optimise layouts, workflows, resource and systems in a 24/7 picking operation. The Logistics and Distribution Centre Design Specialists at The Supply Chain Consulting Group have developed with the market requirements and we now have a number of e-fulfilment projects successfully completed.
Consumer Buying Habits will impact your Logistics operations
Operations set up to deal with medium size or bulk orders to retail outlets (B2B) that then ‘add-on’ e-commerce direct to the consumer (B2C) are suddenly faced with the realisation that the on-line buying habits of the consumer can have a serious impact on the picking and despatch operations.
These changes to buying habits, made possible by the ease at which product can be ordered and returned include:
- The number of variants of a product ordered (e.g. size or colour)
- The percentage increase in product returns
- The ability to return as many items as they want (often for free)
- Order volume patterns during the week and/or month
The nature of the B2C e-commerce model means that the order profiles are likely to change as the B2C orders will be smaller (i.e. fewer items per order) as opposed to the medium or bulk B2B orders.
Operating both B2B and B2C order profiles in the same facility is common with many companies, however there are many different opinions on how it should be done, and how successful it is.
The option of a dedicated e-commerce fulfilment centre is naturally preferred, however not always possible depending on the level of investment required, as often these facilities will have a degree of automation and mechanisation. However, if designed and equipped correctly, a purpose-built e-fulfilment centre, can usually despatch a greater number of orders and individual items per operator hour than trying to integrate it into most traditional B2B warehouse and picking operations. There are no unilateral right or wrong answers for an e-commerce logistics and fulfilment strategy as it is dependent on several factors including product mix, sector, ratio of internet orders to total orders, facility size and capability etc…
Questions you need to consider
Some of the questions you need to consider when deciding on your e-fulfilment strategy and which can be addressed by the experienced e-commerce logistics consultants at The Supply Chain Consulting Group include (but not limited to):
- Is your new e-commerce product offering going to grow exponentially?
- How to optimise pick-face layouts when picking B2C and B2B orders from the same locations?
- Which picking regimes are optimal for different types of orders?
- What level of automation and investment will optimise my e-commerce logistics operations?
- Is outsourcing your e-commerce operation a referable option?
- What are the real overheads and costs per product sold and delivered?
- What are the competitive customer service levels that need to be achieved?
- What is my product price point to remain competitive whilst covering e-fulfilment costs?
- What proportion of the total sale cost is allocated to delivery and returns processing?
- What are the IT system requirements for e-fulfilment logistics operations?
The fact remains that the e-commerce retailer needs payment systems, administration and customer service personnel, warehousing and stock management systems and a physical logistics infrastructure to provide the same or better service as a bricks and mortar retail outlet. The question is what is the best strategy for your e-commerce logistics operations?
The best starting point is to call the experts at The Supply Chain Consulting Group.