Here's How an Efficient Logistics System Improves the Supply Chain Management Process
What are Logistics Systems?
The terms logistics and supply chain are often used
interchangeably. It is presently believed that logistics systems comprise
activities or elements within an eCommerce company or an institute related to
the distribution of products. On the other hand, the supply chain refers
to customer needs for suppliers, manufacturers, products, manufacturing and procurement,
and services. A company's logistics system means to have the right items
in the right place, in the right conditions, at the right price, in the right
quantity, for the right customer.
2 Types of Logistics Systems
1. Inbound eCommerce logistics
This is related to the inbound flow of resources that an
eCommerce company needs to produce in terms of goods and services. These
activities include gaining access to raw materials, negotiating material
prices, managing supplier relationships, and organising faster deliveries.
2. Outbound eCommerce logistics
Working in outbound logistics, you must focus on storage and
transportation. You must use warehousing technology to keep the finished
product safe and accessible. Proper organisation is essential because products
must always be delivered to customers. It may be advantageous to store as few
products as possible, as you cannot make money from the stored products.
As a result, outbound logistics managers often need to weigh
corporate cost savings against consumer demand. Transportation functions are
the most complex part of outbound logistics. There are no logistics systems
without transportation. Thus, it is important to be able to move products from
one location to another as quickly, cheaply, and efficiently as possible.
Transportation can fluctuate, so factors such as fuel cost delays and changes
must be considered to cover all scenarios that could jeopardize the efficient
movement of goods.
Why are Logistics Systems Important to your Supply Chain?
Logistics is like a 3D puzzle. All supply chain segments
are directly or indirectly connected to and affected by all other elements.
Calculating the impact of production or shipping changes on order processing is
too complex to be done manually. Logistics management systems can provide
powerful analytics to help you make the right decisions in fast-paced
situations. The logistics systems software can save you a lot of frustration
and help you stay one step ahead of the competition as you grow and expand your
business.
How Efficient Logistics Systems can Improve your Supply Chain
Multiple logistics systems can seem time-consuming and costly,
so many offer free trials to try out the software before buying. Many eCommerce
logistics apps also offer lower prices for small businesses. Here are some of
the elements of logistics systems to consider for your company.
1. Order management
The eCommerce order management system or OMS performs order
processing operations. The software can automate the steps customers need to
take when ordering online. It includes creating shipping labels, routing orders
to the fulfillment warehouse, and tracking the progress of orders through
fulfillment and shipping. The OMS app allows you to manage all your sales
channels in one place, facilitating omnichannel fulfillment and sales. The
order management system will be integrated with the eCommerce platform and 3PL
service providers.
2. Inventory control
Inventory management software does not allow physical inventory,
but it is substantially used in inventory-related processes and is essential to
the health of your business. Inventory planning does more than just track
inventory, set safety stock, and reorder quantities. Analysing product
movements can help you invest wisely in your inventory.
3. Warehouse management
A warehouse management system (WMS) software handles everything
that happens in a fulfillment warehouse. If you are using 3PL, the fulfillment
provider handles this logistics system. For eCommerce companies that manage
their warehouse, WMS tracks the movement of goods in and out of the warehouse
and helps you manage your fulfillment operations more efficiently, saving on
picking and packing operations costs. One of the benefits of professionally
packing and shipping orders is that the fulfillment center uses world-class
warehouse management software. When choosing a 3PL, you put your sense of fulfillment
in the hands of an expert.
4. Transport management
Transportation management software addresses the complexity of
delivery routing. The software determines the best route to cover all stops in
the shortest possible time and with minimal resources. Large freight carriers
use logistics systems experts and advanced software to manage their shipments.
5. Return management
Return management software helps you process returns quickly and
more effectively. Customers will love it because they can easily set up an
online return system to make returns. Also, faster processing means faster
refunds. By improving the return processing, you can reduce the cost of returns
and process returned items faster. In addition, the return management system
provides the information needed to understand the cost of returns and can be
incorporated into overhead costs.
Conclusion
Managing logistics systems is all about removing complexity from
supply chain management. With automation, you always have the data at
hand and can do more with less effort. However, managing eCommerce logistics
can still be overwhelming for the eCommerce business. You can get rid of much
of this burden on your shoulders by using an external logistics company like Pickrr. Fulfillment is more
affordable because you only pay for the storage space and fulfillment services
you need.
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