Ecommerce is a highly competitive sector, often with tight profit margins. Even small differences between companies and their ecommerce Supply Chain Management can have big effects on profitability.

Online retailers are competing based on price, fulfillment standards, delivery times, returns policies, stock levels, and more, all of which can stand or fall based on the effectiveness of your Supply Chain management strategy.

Sadly, supply Chain Management isn’t simple. It incorporates a number of different components, including:

• identifying the right suppliers for procurement
• negotiating price and purchase volumes
• logistics and transportation of products between manufacturers, suppliers, and distribution centers
• warehouse and inventory management
• last-mile order fulfillment and delivery to the end buyer
• returns management

The last few years only added to the complexities of supply chain management, with many supply chains still suffering aftershocks from the upheaval of COVID-19.

For example, China recently put much of the country into lockdown again, so just looking at the map of containers off the coast of China waiting to dock and reload is enough to bring any ecommerce owner to tear their hair out.

The good news is that the right supply chain management practices can bring sanity to your supply chain. It makes a difference to begin on the right foot.

So here are 5 supply chain management tips for new business owners getting started in the ecommerce space, to help keep your supply chain coherent and under control.

1. Connect the Whole Supply Chain

Supply chain management can only succeed when it’s end-to-end, which means ensuring visibility into supply chain logistics both upstream (towards the supplier) as well as downstream (towards the end customer).

Successful ecommerce businesses set up processes for tracing every step of the supply chain, linking procurement, inventory management, and supplier vetting with monitoring conditions of products in transit, storage, and last-mile delivery.

For example, this could include using GPS monitoring to see when your shipment leaves the supplier. It might also encompass condition monitoring tags for tracking temperature and humidity within a warehouse or for tracking shocks and tilts whenever fragile items are handled.

Fortunately, there are plenty of supply chain management technologies available today that allow small businesses to begin with low-cost plans and scale up as their business needs grow.

2. Maximize Warehouse Utilization

Warehouse space is at a premium today, with lease prices rising 25% over the past five years and some retailers struggling even to find warehouses where they need them. With this in mind, more efficient warehouse storage could save you a lot of money and frustration.

If you can store more for the same costs, you’ll be able to reduce the frequency of orders, increase your flexibility regarding warehouse location, and lower your vulnerability to supply chain upsets.

Warehouse management tactics go hand in hand with reliable inventory management and demand forecasting, since you have to pay for everything you store, even if it’s not selling well.

Automated inventory management solutions ensure that you always know when high-demand items are running low, while improved data about consumer preferences and market trends help guide you away from products that could sit on your shelves for months.

3. Flex Your Data Capabilities

As you can see already, data is the foundation for every piece in the supply chain management puzzle. If your data sources are fractured, data updates are delayed, and data entries are inaccurate, you’re basically flying blind in a sky full of obstacles.

It’s vital to invest in automated data integration tools that collect data from all the relevant sources and feed it all into a single data repository, creating a single source of truth that’s constantly updated without requiring tedious, time-consuming, and error-prone manual data entry or data transfer.

Among other things, up-to-date, accurate data enable you to choose the most reliable suppliers; negotiate pricing with logistics and carrier companies; select the right products; identify the best locations for your distribution centers and warehouses; and speed up returns processes.

4. Open up Access to Data Insights

There’s one caveat to the importance of data for effective supply chain management, and that’s the importance of avoiding getting washed away in the flood of figures. Data is only useful if it helps you make better supply chain decisions; otherwise it’s just a waste of space.

That’s why you need intuitive business intelligence dashboards that are designed specifically for supply chain management. The right tools offer plenty of visualizations and graphs that assist you in tracking trends and spotting significant changes at a glance.

You want to be able to zoom in to view specific issues on a granular level, and also pull back to take a high-level overview of your entire supply chain. Whichever solutions you choose, make sure they are easy for non-techies to use.

You might not have the time or money for a data science team, plus you want everyone involved to be able to run their own queries and check up on burning supply chain issues independently – otherwise you’ll always be on the back foot when a crisis appears.

5. Ramp up Communication

Communication issues are the number one cause of breakdowns in relationships, and that includes relationships with your suppliers, logistics providers, and fulfillment teams.

Don’t lose sight of the human in the picture; a little appreciation can go a long way to grease the wheels of commerce. The more you communicate, the better everyone will understand what you want from them and why it matters.

For example, suppliers stand at the top of your supply chain. Keep in touch about your needs, the market trends that each of you is seeing, feedback about product quality, logistics, and storage issues, and more.

If something is urgent, let them know, and likewise when you can wait a little for items so they can prioritize other, more urgent, orders.

Ecommerce Supply Chain Management as a Keystone of Success

Many factors go into building a successful ecommerce business, but supply chain management could be the keystone that holds them all up.

Although it’s challenging, end-to-end supply chain visibility, integrated and automated data processes, and improved communication, analytics tools, and warehouse utilization management all help to set your ecommerce business up for success.