What Is An eCommerce Supply Chain?

To be a superior eCommerce merchant, you need more than a great website and a huge product catalog. You need a complete supply chain system that enables you to deliver products to customers on order in record time and at the lowest cost without compromising quality or integrity. This is where e-commerce supply chain management (SCM) comes in. This article covers what you need to know about e-commerce supply chain management, including how it works, its benefits, how to optimize your e-commerce supply chain strategy, and e-commerce supply chain management best practices.

eCommerce Supply Chain

What Is The eCommerce Supply Chain?

E-commerce supply chain management involves managing the flow of information, resources, and funds between different entities and stages of an e-commerce supply chain, from the supply of raw materials to the delivery of finished goods to buyers.

Entities in a supply chain include suppliers, producers, suppliers, warehouses, logistics and transportation companies, distribution and fulfillment centers, and end buyers. Each entity controls a specific link in the supply chain and contributes to your overall success or failure in meeting customer expectations.

E-Commerce Supply ChainFlow Chart

E-Commerce Supply Chain Flow Chart

The eCommerce supply chain process is a comprehensive system, usually including the following seven aspects:

  • The goods are initially at the supplier;
  • The enterprise system (ERP) establishes a purchase order through the purchase plan, and imports the goods from the supplier into its warehouse;
  • The warehouse system (WMS) manages the inventory of goods in the warehouse system through the transportation order/storage order, associated purchase order, or other storage methods;
  • After the enterprise system (ERP) obtains the commodity information and inventory information, it transmits the commodity information to consumers through its platform for commodity sales;
  • After the order system (OMS) gets the order information, it processes the order (customer review, financial review, warehouse selection, order splitting, order consolidation, etc.), and monitors the order. After the order is processed, the order information is pushed to the corresponding warehouse; (The most direct experience of users to e-commerce companies is logistics, so the processing and monitoring of orders directly affects the user experience, including the “full order link” proposed by Tmall The purpose is to improve the user experience here)
  • After the warehouse system (WMS) obtains the order information, it will perform operations such as ordering, sorting, inspection, and delivery of the order, and hand over the order to a third-party express company for distribution;
  • The goods are delivered to consumers by express delivery.

E-Commerce Supply Chain Models

E-Commerce Supply Chain Models

There are two main models of eCommerce supply chains:

Supply Chain Operations Reference (SCOR)

SCOR includes three entities and five functions. The three entities are suppliers, enterprises, and customers. The five functions include plan, source, make, deliver, and return. The structure of the three entities and the five functions forms an end-to-end, interlocking, end-to-end structure.

Sales and Operations Planning (S&OP)

The core of S&OP is to balance “demand” and “supply”. The enterprise sets a business goal based on the strategic plan and financial plan and completes the closed loop from demand to supply by formulating production plans and procurement plans. If effective processes can be established on both the demand and supply sides, production and sales coordination can be achieved. S&OP focuses on the formulation of business objectives, demand, supply planning, and production planning (MPS).

Top 5 eCommerce Supply Chain Companies In The World

Amazon Supply Chain

Amazon is the largest online e-commerce company in the United States. In the beginning, it only operated the online book sales business, but now it has expanded to a wide range of other products and has become the online retailer with the largest variety of goods in the world and the second-largest online retailer in the world. big internet companies.

Walmart Supply Chain

Walmart is an American global chain enterprise, the largest company in the world in terms of turnover. With years of offline retail experience and brand reputation, Walmart has grown into the top e-commerce platform in the United States.

Scheduled Holdings Supply Chain

The company was founded in 1997 and is headquartered in the United States. Booking Holdings started with gas, groceries, phone service, second-hand goods, and more then ceased some operations and started more.

Shopify Supply Chain

Shopify is a Canadian e-commerce company headquartered in Ottawa, Ontario, which currently has more than 60,000 merchants using its platform, creating more value.

Rakuten Supply Chain

Rakuten was founded in 1977 and is headquartered in Tokyo, Japan. Also known by many as the Amazon of Japan, Rakuten offers thousands of products online and also provides digital content, financial technology solutions, and e-commerce services to more than 1 billion members worldwide.

4 Steps To Improve Supply Chain Efficiency You Must Know

Improve Supply Chain Efficiency

Invest In High-Quality Human Resources

In the development process of an enterprise, people will always play an important role. Hiring excellent talents is common sense to make a great enterprise. Talent is an irreproducible factor. So, the role of managers is a factor in improving the efficiency of the supply chain, and having a strong management team will inevitably have a domino effect on other aspects of improving the efficiency of the supply chain. In particular, a strong management team will also increase the efficiency and competence of employees. Therefore, you can invest more in high-quality human resources, not limited to internal selection.

Improve the automated Supply Chain Process

By automating key processes, companies can free employees from manual activities and allow them to focus on value-added tasks.

By automating inventory management, it is possible to reduce long shipping lead times, align the arrival of goods with production needs, reduce human error and minimize warehouse and storage expenses.

Improve the Visibility of the Entire Supply Chain

The supply chain involves many processes such as procurement, production, and distribution, which may lead to inefficiency due to inadequate monitoring. However, increasing visibility across the supply chain makes it easy to spot any bottlenecks and inefficiencies that may arise. This means having a clear view of where your inventory is at every stage of the purchasing, production, and distribution process, and tracking your logistics and shipping activities.

Third-Party Logistics Management System

To increase the visibility of supply chain management, 3PL services can be selected. 3PL is a third-party logistics management system, which is more professional in supply chain management, which can improve our management efficiency. Although many companies can provide 3PL services, we should still choose a more professional team, such as Honest FulPhilment. Honest FulPhilment provides a professional supply chain visibility management system to help us better improve work efficiency.

Build Better Supplier Relationship

Achieving supply chain efficiency is a multi-party effort that requires companies to consider, and any inefficiencies that may arise on the supplier side of the supply chain can have a knock-on effect on your overall supply chain efficiency. When it comes to building strong supplier relationships, you can communicate more, exchange ideas, give suppliers access to the information you need, save time for all involved, and improve the efficiency of the entire supply chain.

Build Right Relationship With Honest FulPhilment

Honest FulPhilment is a professional supply chain management supplier with a professional e-commerce service that can provide timely communication services and can help us solve all supply chain problems. Excellent suppliers can not only improve our supply chain system but also solve various problems we encounter in the process of supply chain management.

Get Started With Honest FulPhilment

The E-commerce supply chain plays an important role in the whole e-commerce system. Through the management of the e-commerce supply chain, sellers can clearly manage products, update product inventory and logistics information promptly, provide consumers with sufficient logistics information assurance, and effectively increase sales. If you encounter any unsolvable problems in supply chain management, welcome come to get in touch with our team!

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