How to Improve Delivery Speed and Accuracy During Peak Seasons
During peak seasons such as holidays and global sales events, demand for certain products is heightened. This can make it hard for e-commerce businesses to keep up, especially if they don’t have the manpower to fulfill orders quickly and efficiently. That’s why working with a third-party logistics (3PL) provider is worth the investment. A 3PL provider can help you improve your delivery speed and accuracy so that your customers are satisfied.
Common Peak Season Challenges
Below are some of the common challenges fulfillment companies face during peak seasons and holidays.
- Sudden Spikes in Order Volume: Peak season means more orders. Companies that are not prepared can experience order processing delays, inventory shortages, and a loss of revenue.
- Increased Shipping Complexity: Last-minute orders and deliveries to remote areas can often lead to increased shipping costs. Bulk orders can also cost more, especially if they need to be expedited.
- Higher Risk of Errors: Tighter deadlines can lead to more logistic errors due to stockouts, incorrect shipments, and weather delays. These and human errors with order processing can result in lost sales opportunities.
- Strain on Resources and Labour: Peak seasons can negatively affect a company’s workforce physically and psychologically. Labour shortages in recent years continue to plague the global market.
Strategies to Improve Delivery Speed and Delivery Accuracy
The first step to overcoming these peak season challenges is to improve your delivery speed and delivery accuracy. Here’s how you can do that.
Optimize Your Warehouse Layout and Operations
By locating high-demand products closer to dispatch points, you can streamline the pick-and-pack process. Storing commonly ordered items in one area that is easily accessible also reduces the order process timing. This includes storing and organizing items in a progression or logical sequence.
Invest in Automation
A worthwhile peak season fulfillment strategy is to invest in up-to-date automation. This can involve robotic picking systems and conveyor belts to speed up order processing. Having an automated inventory tracking system within the supply chain also allows for quick replenishment to reduce the risk of out-of-stocks.
Pre-Plan Inventory Allocation
During the pre-planning phase, look at your past sales data. Basing available stock on historical demand and sales forecasts can help reduce fulfillment delays. In addition, making accurate demand predictions to ensure you have adequate inventory can also help you determine the best locations for your various fulfillment centers so you can reduce shipping distances.
Enhance Your Order Management Systems
Inventory management systems are essential to streamline order processing. The risk of errors can be reduced with real-time tracking and order management software. Integrating systems to track and monitor your orders allows you to replenish stock without wasting too much. You can also improve order accuracy by implementing Radio-Frequency Identification (RFID) or barcode scanners for fulfillment purposes.
Implement Strict Quality Control Measures
It is important to have stringent quality control measures in place during peak seasons to ensure accurate order fulfillment. Inventory must be audited before being placed on shelves or in storage within the warehouse to reduce order processing errors. Double-check orders before shipping and conduct periodic inventory audits.
Leverage Predictive Analytics
To improve delivery accuracy, consider implementing predictive analytics. Forecasting supply and demand helps to reduce the risk of order processing errors, stockouts, and shipping errors. With customized software, shipping data can be evaluated so that you can make adjustments to delivery routes to improve speed.
Optimize Last-Mile Delivery
With multiple carriers, more ground is covered, allowing for more flexibility, reliability, and speed during peak periods. Use reliable private drivers to save on costs and invest in routing software to reduce travelling time. Real-time GPS tracking and dynamic route adjustments take into account required stops, traffic flow, and carrier driving behaviours.
Offer Real-Time Tracking for Customers
Real-time tracking software allows all parties to be informed in real time about the status of the delivery. If you want to retain customers and maintain customer satisfaction, it is important to be transparent with them during the entire order process. This involves providing them with updates and accurate delivery ETAs.
Invest in a Warehouse Management System (WMS)
A warehouse management system (WMS) helps you monitor and manage warehouse operations including receiving and shipping of goods. It streamlines the fulfillment process, reducing errors and providing real-time distribution. Deliver speed and accuracy can also be improved with visual tracking management.
Utilize Collaborative Robots (Cobots)
The design of automated systems within a warehouse or fulfillment facility improves productivity and accuracy while reducing errors. These cobots are used to reduce the workload of staff, particularly during peak seasons. The system features conveyors, sorting devices, voice leads, drones, and robotics.
Invest in Demand Forecasting Tools
Demand forecasting is a key tool that e-commerce businesses can use to stay ahead of customer needs and demands during peak season. You can improve delivery performance and accuracy, as well as manage data for yearly sales and peak rush times when demand forecasting for emerging trends.
Partner with a Reliable 3PL Provider
Outsourcing your fulfillment operations to a reliable 3PL provider can help you increase sales and retain customer loyalty. Third-party logistics providers have the knowledge and expertise to ensure high order volumes reach their destination quickly. This results in higher customer satisfaction and loyalty.
Contact Lean Supply Solutions to Learn About Our Customized Fulfillment Solutions
Focus on your marketing and the needs of your business by hiring Lean Supply Solutions to manage your fulfillment operations. We utilize the latest software to collect data on order cycle time and fulfillment rates to optimize your supply chain. Our logistics solutions improve delivery speed and accuracy thanks in large part to our customized lean processes and IT systems. Contact us today for a free customized consultation!
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Customer-Centric Fulfillment: Implementing Best Practices for a Seamless Experience
E-commerce businesses are increasingly recognizing the importance of fulfillment in shaping customer perceptions. A single delayed delivery or a misplaced item can tarnish your brand’s reputation and drive customers to your competitors. However, integrating customer-centric fulfillment allows you to target customer satisfaction, brand loyalty, and customer loyalty.
What Is Customer-Centric Fulfillment?
Customer-centric fulfillment prioritizes the customer’s needs and preferences. Unlike traditional fulfillment models that prioritize efficiency and cost-cutting, this strategy centers on the needs and expectations of the customer. Each step of the supply chain management focuses on transparency, from ordering to fulfillment, through to delivery.
This philosophy may be a different approach but reports by Deloitte and Touche show that customer-centric fulfillment can be 60% more profitable. By placing the customer at the center of the fulfillment process, your business can differentiate itself from your competitors and create lasting value for your customers.
Key Components of a Seamless Customer-Centric Fulfillment Strategy
- Speed and Accuracy: Automation plays a crucial role in achieving speed and accuracy. By automating key fulfillment tasks, such as inventory management and order processing, businesses can reduce human error and improve efficiency.
- Flexible Shipping Options: Customers want multiple delivery methods and the ability to track their deliveries in real time. Whether it’s same-day, next-day, standard, or express delivery, customer-centric strategies cater to varying customer needs and preferences.
- Personalized Fulfillment: Personalized fulfillment solutions such as custom packaging, gift wrapping, and other customized touches offer a tailored approach to customer service. Recognizing customer preferences such as sustainable practices, discounts, or free trial-size samples can lead to customer loyalty.
- Proactive Communication: Real-time updates and clear communication on order status, whether through email, SMS, or app notifications, are key in designing a seamless customer-centric fulfillment strategy. Proactive problem-solving also enhances customer trust, retention, and loyalty by offering transparent communication.
Best Practices for Implementing Customer-Centric Fulfillment
- Integrated Technology Solutions: To streamline the supply chain for customer-centric fulfillment, you need to integrate customer relationship management (CRM) systems and warehouse management systems (WMS). With the ever-changing technology advances, it is crucial to have data analytics and leverage intelligence for forecasting demand.
- Optimizing Warehouse Layouts: Warehouse management systems can help you strategically utilize space while implementing lean principles can help you eliminate redundant and unnecessary steps along the order processing chain. Warehouses of all sizes can benefit from vertical growth, storage solutions, and automated storage and retrieval systems.
- Last-Mile Delivery Excellence: Partnering with reliable delivery providers is crucial for ensuring timely and accurate deliveries. You should also explore the use of route optimization tools to enhance delivery efficiency and reduce transit times. Innovative delivery solutions, such as drone deliveries or autonomous vehicles, offer exciting opportunities for enhancing the last-mile experience.
- Returns and Reverse Logistics: By making returns easy and hassle-free, you can build trust and encourage repeat business. Clear return policies and instructions help manage customer expectations and reduce confusion. In addition, reverse logistics solutions that prioritize customer convenience, such as automated return portals or scheduled pickups, further enhance the returns experience.
Challenges in Customer-Centric Fulfillment
Seamlessly blending cost-effective solutions with premium customer experiences is probably one of the biggest challenges companies have when it comes to implementing customer-centric fulfillment systems. Sometimes reducing operational costs can hurt customer service if it’s not properly managed.
Another challenge lies in managing fluctuating demands without compromising service quality. You need to be flexible when it comes to customer service operations if you want to meet forecast demands.
While most businesses want to incorporate sustainable practices to satisfy customer demands, the reality is that it’s difficult to offer long-term sustainability practices. Customers want eco-friendly materials, ethical labour practices, and tangible results that show your business has a low carbon footprint and practices that actively reduce greenhouse gas emissions.
Benefits of Customer-Centric Fulfillment
There are many benefits of customer-centric fulfillment. For one, by optimizing your software, collaborating with suppliers, and utilizing technology such as customer portals and real-time tracking, you can increase customer satisfaction and loyalty for your business.
The key to building a trustworthy and reliable relationship with every customer is addressing their needs and behaviours. Not only can this improve your brand reputation and get you more positive customer reviews but it can also result in higher retention rates and repeat business. By integrating customer preferences into the fulfillment process, you can also enhance operational efficiency.
Contact Lean Supply Solutions for Expert Assistance in Creating a Customer-Centric Fulfillment Strategy
For comprehensive, 24/7 support with your supply chain management, talk to the team at Lean Supply Solutions. We provide integrated logistics solutions using lean processes, cutting-edge IT systems, and world-class customer service. Contact us for a free customized quote today!
Also Read: Guide to Navigating Shipping Delays and Exceptions in Your Supply Chain
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Same-Day Delivery Secrets: Approaches to Accelerate E-Commerce Shipping
Due to customer expectations and demands, same-day delivery is becoming one of the fastest growing e-commerce shipping solutions.
However, in order for companies to retain customers and attract new customers, same-day delivery services must be accurately implemented into the logistics of the supply chain.
Why Same-Day Delivery Matters for E-Commerce Businesses
With all the technological advancements and the growing competition in e-commerce over the years, customers now have higher expectations than ever before. Companies that follow through on delivering products to their customers quickly and efficiently have a leg up in the e-commerce game.
Recent reports from statista.com show that same-day delivery is expected to grow from 14.9 billion dollars (US) to 26.4 billion dollars (US) over the next three years. This is due in large part to increasing customer expectations, technological innovations, and the expansion of the e-commerce market.
Challenges in Implementing Same-Day Delivery
Achieving same-day delivery is no walk in the park. It presents numerous logistical challenges, including intricate supply chain management. Coordinating multiple touchpoints within the supply chain to ensure timely deliveries requires meticulous planning and execution.
Furthermore, the added cost of accelerated shipping can strain budgets, requiring companies to find innovative ways to balance speed with profitability. Same-day delivery requires multiple resources, particularly for customers outside of an urban centre.
Last-mile delivery is often the most complex and costly aspect of the logistics chain. To meet customer expectations, businesses must be proactively prepared to face challenges such as navigating urban environments, traffic congestion, and unpredictable factors.
Inventory management is another hurdle. Ensuring real-time stock availability is essential for fulfilling orders swiftly. An imbalance in inventory can lead to delays, negatively impacting the customer experience. Businesses must adopt efficient inventory tracking systems to keep pace with demand.
Lean Approaches to Accelerate E-Commerce Shipping
At Lean Supply Solutions, we implement a Lean Methodology. This involves both the direct and indirect use of software systems that streamline the supply chain by eliminating all non-valued resources.
Warehouse Optimization
Strategically placing inventory in warehouses is key. Efficient placement allows for quick picking and packing, reducing the time between order placement and dispatch. Implementing automation and technology such as robotics and artificial intelligence (AI) systems into the warehouse setup can lead to a seamless delivery process.
Efficient Order Processing
Streamlining order processing optimizes resources leading to successful deliveries. It is important to audit existing processes to identify waste. Implementing warehouse management systems (WMS) for speed and accuracy provides accurate solutions to replenish items as demand requires.
Smart Inventory Management
Real-time inventory tracking and demand forecasting are crucial for preventing stockouts and overstock situations. Cross-docking, a practice that involves transferring products directly from inbound to outbound transport, reduces handling time and expedites shipment, allowing for faster delivery.
Collaboration with Local Carriers
Partnering with local couriers can significantly improve last-mile delivery speeds. This collaboration can be expanded through crowdsourced delivery platforms for added flexibility, especially at peak times.
Data Analytics and Route Optimization
We use data analytics to optimize shipping routes which allows for more same-day delivery options for customers. This can be done with real-time GPS tracking and dynamic route adjustments. Various factors affect the delivery time such as the required stops, traffic flow, driving behaviours, and efficient timing for different routes.
Technological Innovations in Same-Day Delivery
Technological innovations are taking shipping and delivery options to the next level. These technologies enable faster decision-making and improved operational efficiency, making same-day delivery more feasible for businesses of all sizes.
Emerging solutions like drones and autonomous vehicles are poised to revolutionize last-mile delivery. These and other solutions are being implemented in micro-fulfillment centres and urban warehouses to provide accelerated service to customers in rural areas. Automation of inventory count, packing, and delivery also reduces the risk of human error which can lead to improved customer satisfaction.
Best Practices for E-Commerce Businesses
E-commerce businesses looking to implement or tweak their same-day delivery services need to build a resilient network with suppliers. Having real-time updates on shipping and delivery can prevent delays and expose areas that require improvement.
Lean Supply Solutions can help businesses streamline their logistics operations with quality software and automation solutions. We work closely with multiple carriers for same-day delivery options to ensure a superior customer experience regardless of the location of the customer.
Learn More about Lean Supply’s E-Commerce Shipping Solutions
Lean Supply Solutions offers integrated customized logistics solutions for enhanced supply chain optimization and logistics management. Contact us today for a free consultation to see how we can streamline your supply chain with integrated solutions!
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LIFO vs. FIFO: Which Inventory Method Is Right for Your Business?
Inventory management is the backbone of efficient business operations. Managing inventory well can significantly impact your business’s profitability and customer satisfaction. Among the most widely used inventory management methods are LIFO (Last In, First Out) and FIFO (First In, First Out).
In this comprehensive guide, we’ll compare LIFO vs. FIFO to help you decide which method suits your business needs.
Understanding LIFO (Last In, First Out)
The Last In, First Out (LIFO) inventory method is designed for the most recently received products to be used first. Essentially, the most recently acquired items are the first to leave the inventory.
Under LIFO, when you sell a product, you record the cost of the most recent inventory purchased. For example, if you bought 100 units at $10 each and then another 100 units at $12 each, you would record the $12 cost for each unit sold until those units run out, then move to the $10 units.
LIFO is commonly used in industries dealing with non-perishable commodities such as oil, gas, and metals.
Advantages of LIFO
- Lower tax liability (during inflationary periods)
- Easy implementation for recently purchased inventory
- Lower reported income (resulting in lower tax bill)
- Allows companies to claim greater expenses
Disadvantages of LIFO
- Inaccurate inventory movement as older products are used
- Lower net income
- Misrepresentation of the value of the flow of inventory
- Not regulatory compliant in all jurisdictions
- Limited global implementation as prohibited by International Financial Reporting Standards and Canada Revenue Agency regulations
Understanding FIFO (First In, First Out)
The First In, First Out (FIFO) inventory method uses/sells the oldest received inventory first before the newest products. In a warehouse setting, this means the older products are brought to the front of the shelf to ensure they are used/sold before their expiry.
Under FIFO, when you sell a product, you record the cost of the oldest inventory purchased. For example, if you bought 100 units at $10 each and then another 100 units at $12 each, you would record the $10 cost for each unit sold until those units run out, then move to the $12 units.
This approach is commonly used in sectors that involve perishable goods such as pharmaceuticals and food/beverages.
Advantages of FIFO
- Higher net income
- Higher inventory balances
- Promotes regular inventory turnover
- Prevents stock from becoming outdated
- Higher gross income and profits reporting
- Accurate inventory value count
Disadvantages of FIFO
- Higher tax liability (during inflationary times)
- Inaccurate cost of materials with stagnant inventory
- Exaggerate profits (due to the gap between costs and revenue)
- High reported income (resulting in a higher tax bill)
Key Differences Between LIFO and FIFO
- Inventory Valuation: The FIFO method offers a more accurate value indicator as the most recent inventory falls under the current market price. In the LIFO system, a large percentage of the inventory must be considered under the current value.
- Cost of Goods Sold (COGS): LIFO generally results in higher COGS during inflation, lowering taxable income. FIFO results in a lower COGS, increasing taxable income but providing a more stable measure of profitability.
- Tax Implications: LIFO offers tax advantages during inflationary periods by reducing taxable income. FIFO, while simpler, may result in higher tax liabilities but offers more consistent financial reporting.
- Financial Reporting: LIFO can distort financial reporting due to outdated inventory values on the balance sheet. FIFO provides more accurate and transparent financial reporting, reflecting current market conditions.
- Compliance and Global Considerations: LIFO is accepted under Generally Accepted Accounting Principles (GAAP) but not under International Financial Reporting Standards (IFRS), limiting its use for international businesses. FIFO is accepted under both GAAP and IFRS, making it more universally applicable.
Factors to Consider When Choosing Between LIFO and FIFO
- Industry and Type of Products: As FIFO is best suited for inventory with a limited shelf life, this inventory management system is frequently used for foods, medication, and cosmetic products. Some businesses depend on the LIFO system for building materials, clothing, and automobiles.
- Economic Environment: The impact of inflation or deflation plays a role in which inventory management system is being used. With inflation periods, the gross profit margin can rise as older inventory that was cheaper than the latest inventory is priced up. Deflation can see less of a profit as lowering prices on all inventory sees a loss on the latest (and more costly) inventory received.
- Business Goals and Financial Strategy: In aligning inventory methods with broader financial objectives, the LIFO system helps to decrease tax liability. If accurate financial reporting is critical, FIFO may be the better option.
- Regulatory Compliance: As North American companies are required to comply with the Generally Accepted Accounting Principles (GAAP) for financial statements, it is important to ensure the chosen method is also in compliance.
Making the Decision: LIFO or FIFO?
Choosing between LIFO and FIFO is a critical decision that should align with your business model, market conditions, and financial goals. Consider the nature of your products, the economic environment, and your overarching business strategy.
Consulting with financial and supply chain experts can provide additional insights and help you make an informed decision.
Contact Lean Supply Solutions for Personalized Inventory Management Solutions
Lean Supply Solutions utilizes the latest technology and cloud-based software to optimize your supply chain management system. Our inventory management solutions can save you time and money by streamlining your business’s needs and staying ahead of potential issues.
Speak to one of our consultants for more information on how our inventory management systems and other 3PL/4PL services can help you!
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Stock Keeping Units (SKUs): The Unsung Hero of Inventory Management
With the upcoming holiday season fast approaching, retailers and e-commerce business owners must prepare for the influx in customer demand. One of the best ways to do that is to always know exactly what’s in stock and where it is. Enter Stock Keeping Units (SKUs), the unsung hero of inventory management. In this blog post, we’ll explore the significance of SKUs, their role in e-commerce, and how to create effective SKUs for your business.
What Are SKUs and Why Are They Important?
Stock Keeping Units, commonly known as SKUs, are unique codes to identify products within a retailer’s inventory. Featuring a sequence of numbers and letters, a SKU represents a product’s size, brand, colour, and/or other specific identifiers.
This alphanumeric code can vary from retailer to retailer; however, they are crucial for ensuring that products are accurately tracked, making the order fulfillment process smoother, and providing valuable insights into sales and inventory levels.
They allow retailers to manage their own inventory across various channels. Similar to a serial number in which a product is easily identified and located, a SKU system can be found in the retail, e-commerce, logistics, and manufacturing sectors.
The Benefits of SKUs
There are many benefits of SKUs, including:
- Improved Inventory Accuracy: A well-organized SKU system is designed to track inventory levels and avoid stockouts or overstocking. SKUs can be used to create automated reordering points along the supply chain to reduce the stress of maintaining inventory levels. When products are tracked in real-time, they improve inventory accuracy, which eliminates the need for full manual inventory counts each month.
- Enhanced Efficiency: SKUs help to streamline warehouse management processes such as order fulfillment, picking, and packing. Creating an organization system to identify available products and their location within the warehouse reduces the risk of errors. An enhanced efficient management system is key to avoiding lost or misplaced items.
- Better Data Analysis: A successful inventory management system demands the use of up-to-date and accurate data analysis. SKUs provide valuable insights into product performance and customer behaviour. By analyzing SKU-level data, business owners can identify trends, understand which products are popular, and make informed decisions about their inventory and marketing strategies.
- Simplified Reporting: SKUs make generating accurate reports on sales, inventory levels, and profitability a breeze. Businesses can easily track the performance of individual products, categories, and variations, helping them make data-driven decisions and optimize their business operations.
The Role of SKUs in E-Commerce
SKUs are essential for managing product listings, orders, and inventory online to streamline the management process. They help businesses track inventory across multiple sales channels and prevent discrepancies between physical and online stock levels.
Another important role of SKUs in e-commerce is the ability to link product data with e-commerce platforms like Shopify, Amazon, and WooCommerce. This integration ensures that a company’s product listings are accurate and up to date, reducing the risk of overselling or underselling and improving the overall customer experience.
SKUs also help with product search and recommendation algorithms for both the vendor and the customer. By using SKUs, businesses can improve the visibility of their products in search results and provide personalized recommendations to customers, increasing the likelihood of sales.
How to Create Effective SKUs for Your Business
While there is no standard SKU formula used across the board, there are ways to create effective SKU systems within an organization to enhance efficiency.
- Define a Clear SKU Structure: The SKU structure should have a clear structure that includes relevant product details, such as category code, product code, and size/colour code. This structure will help you quickly identify products and variations, making inventory management more efficient.
- Keep it Simple and Scalable: Only use short, clear, and concise codes that can be adapted to the changing needs of your business. Refrain from using spaces, special characters, and numbers and letters that can be interchangeable such as “0” and “O”.
- Standardize Across Your Business: For SKU best practices, ensure that all departments, including sales, marketing, and warehouse, use the same SKU system. Standardization prevents confusion and errors, making it easier for everyone to manage inventory and fulfill orders efficiently.
Basic SKU Structure and Variations
These codes are standard across most global SKU systems:
- CAT: Category code (e.g., TSH for T-shirts, SHT for Shorts)
- PROD: Product code (e.g., RT100 for Running T-shirt)
- VAR: Variant code (e.g., M for Medium, BLK for Black)
This basic structure can also handle different variations of a product, for instance:
- SKU: TSH-RT100-BLK (Black Running T-shirt, Medium)
- SKU: TSH-RT100-WHT (White Running T-shirt, Medium)
- SKU: TSH-RT100-LRG (Black Running T-shirt, Large)
Common Mistakes to Avoid When Creating SKUs
Below are some common mistakes to avoid when creating SKUs:
- Inconsistent Coding: Inconsistent coding across similar products can lead to confusion and errors. Businesses should ensure that their SKU structure is applied consistently to all products and variations, making it easier to manage inventory and track sales accurately.
- Overly Complex Codes: Overly complex codes can be difficult to understand and use, leading to errors and inefficiencies. Businesses should keep their SKU codes simple and straightforward, ensuring that they are easy to interpret and apply.
- Lack of Standardization: Businesses that fail to form a consistent SKU to use across various sales and inventory platforms could face challenges with tracking, demand forecasting, and inaccurate numbers within their supply chain management.
Implement a Well-Structured SKU System with the Help of Lean Supply Solutions
SKUs play a crucial role in efficient inventory management, especially for e-commerce businesses. By using a well-structured SKU system, businesses can improve inventory accuracy, streamline processes, gain valuable insights, and simplify reporting.
If you’re ready to take your inventory management to the next level, consider partnering with Lean Supply Solutions. Our expertise in inventory management and supply chain solutions can help you optimize your operations and achieve your business goals.
Contact us today to discuss how our inventory management systems and other 3PL/4PL services can help you create a consistent and streamlined system for your business.
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