The concept of e-commerce logistics (e-logistics) refers to changes brought about by the consolidation of e-commerce in the organization of logistics operations. More than ever, good logistics management for online trading is becoming the basis for success in the industry.
In our article, we dwell on the characteristics of e-commerce logistics and describe the key points for effective logistics management.
Differences between traditional logistics and e-logistics
The revolution in traditional distribution methods has had an impact on many areas of logistics. The main differences between the traditional concept and e-commerce logistics are:
Type of order/shipping
Full utilization and consolidation of goods
Parcels and small loads predominate
known and loyal
unknown, variable, not very loyal
Flow of goods
evenly and clearly
uneven and complex
especially companies or shops
mainly private individuals, although it is B2B e-commerce
stable and predictable
fluctuating and difficult to predict
5 Tips for Managing e-Commerce Logistics
1. Focus on customer satisfaction
In logistics, the term customer service means the ability to meet needs in terms of time, reliability, communication and comfort. In e-commerce logistics, the customer’s need is at its maximum and the logistics service is part of the brand’s value proposition in a highly competitive environment . However, the higher the service level, the higher the logistics costs.
How do you achieve a balance between customer satisfaction and costs?
- Prudent customer care and open communication: Any mistake during the whole process of buying and receiving products can lead to the loss of the customer and a negative impact on other customers (negative opinions are easily spread on the Internet). For this reason, flawless problem management with quick solutions is absolutely necessary in the field of e-commerce.
- Real-time customer information : Customers want to know where their order is and keep track of it. The key lies in the traceability of logistics processes to reduce this uncertainty from both the customer and the logistics manager’s point of view. The information is controlled by integrating the software in all logistic areas .
2. Stock control and omnichannel: integrated information management
In the e-commerce sector, management needs to have very accurate and reliable information about the available inventory from all areas of the company. This can become a challenge: when the warehouse processes very large orders very quickly , when the number of stored references increases extremely (phenomenon of SKU proliferation), or when there are combined flows of goods, so that orders to both physical stores and to end customers from the same warehouse or in several distribution centers.
How to respond to omni-channel while maintaining comprehensive inventory management?
- Automatically saved stock data: The stock information actually comes from the company’s ERP, but the warehouse management system , in conjunction with the ERP and the registration and identification devices, updates the data in real time. The website, in turn, must reflect the actual availability of the products and must therefore be continuously updated and controlled.
- Flexible and Efficient Warehouse : At the heart of an omnichannel logistics strategy is a warehouse whose operation strikes the balance between traditional logistics and online businesses.
3. Order preparation as a central and accelerated process
Order picking in the warehouses of online retailers is often difficult. The enormous order volume from just a few units increases the complexity of an already demanding process considerably. The different phases of picking consume the most resources due to the number of operators and systems required to implement them.
How do you successfully manage the increase in picking operations?
- Flexibility in order preparation: Only by using specialized warehouse management and order picking software is it possible to react to a very volatile and difficult to predict order situation. Additionally, deadlines and recurring promotions increase activity at certain times of the year. Good organization is essential to adapt order preparation strategies and methods to each situation.
- Equipping the warehouse with automatic systems: examples of this are picking aids such as pick-by-voice or pick-by-light. In addition, conveyor circuits for crates are an effective means of saving the operator a trip.
- Sensible layout and optimized warehouse organization : Warehouses are usually equipped with different types of shelves for order picking in order to gain storage capacity . Another focus is the organization of the available references according to ABC rotation criteria and logistical parameters. The highest precision in inventory control and management is achieved through the use of a WMS.
4. Last mile complications
Last mile management refers to the final leg of order delivery . This area contributes to increased logistics costs as city traffic congestion leads to more fuel consumption and reduced productivity by limiting the capacity of deliveries per day and causing further delays.
How to optimize the management of the last mile?
- Specify options in the terms of delivery , such as the use of pick-up stations from the second failed delivery home or information about the status of the package by calling the recipient or sending an SMS. In terms of transport, for example, there is the possibility of consolidating loads, grouping orders by zones or using environmentally friendly vehicles with better urban mobility .
- Using software to manage transport routes and improve integration with the warehouse.
5. The challenge of returns management (reverse logistics)
Another major uncertainty for online buyers is whether the favored product actually corresponds to what they want. To prevent this from happening, many digital retailers have opted to make their return policies more flexible and simple . This phenomenon has now almost become standard in the industry.
How can returns management be improved?
- Integrate reverse logistics as an additional process in the warehouse and do not see it as an exceptional situation. This requires resources and procedures to be put in place for quality control and site management after the reception of this type of goods.
- Determine the reason for the return and decide how to proceed : For example, if the customer wants to change the size of the product they have purchased, the courier could deliver the correct product on their way and collect the return package from the customer. Errors in the preparation of orders also play a role. Therefore, as much information as possible should be gathered to assess why they occurred and to try to prevent these errors.