Jason Simon explains the importance of logistics in eCommerce

The concept of Commerce logistics (eLogistics) refers to the set of changes that have occurred in the way logistics operations are organized as a result of the consolidation of eCommerce. More than ever, good logistics management for online commerce is becoming the basis for success in this sector. Jason Simon, an eCommerce specialist, takes an in-depth look at the characteristics of eCommerce logistics and analyzes how to address the key points that determine effective logistics management.

The revolution in traditional distribution methods has been reflected in many areas of logistics. In logistics, customer service refers to the ability to meet demand in terms of time, reliability, communication, and convenience. In eCommerce logistics, customer demand is at its highest, and logistics service is part of the brand’s value proposition in a highly competitive environment. However, the higher the level of service, the higher the logistics costs.

Any error during the entire process of purchasing and receiving products can result in the loss of the customer and a negative influence on other customers (negative opinions are easily spread on the Internet). Therefore, eCommerce is obliged to have an impeccable incident management system that provides quick solutions.

Real-time customer information is related to the phenomenon called “transit uncertainty.” Customers want to know where their order is and have control over its journey. The traceability of logistics processes is key to mitigating this uncertainty from both points of view. That of the customer and that of the logistics manager. The control of information involves the integration of software in all logistics areas.

“In the eCommerce sector, the information on available inventory must be very accurate and reliable so that it can be managed by all areas of the company. This can be a challenge,” Simon explains. “If the warehouse is handling large numbers of orders very quickly, if the reference base has exploded (SKU proliferation), or if the flows are mixed so that orders are handled for both physical stores and end customers from the same warehouse or from several distribution centers.

Inventory data is supported by an automated system. Normally the stock information flows from the company’s ERP. Still, it is the warehouse management system in communication with the ERP and the recording and identification devices in the warehouse that updates the data in real-time. In turn, the website must reflect the actual availability of the products and must therefore be continuously updated in a controlled manner.

At the heart of omnichannel logistics, strategy is the warehouse, whose operations must keep pace with the shared ecosystem between traditional logistics and online businesses. Order picking and order preparation in eCommerce warehouses is a challenge. The sheer volume of low-volume orders adds enormous complexity to an operation that is already a challenge for the overall performance of any warehouse. The different picking phases absorb most of the warehouse’s resources due to the number of operators and systems required to carry them out.

”The management of the last mile corresponds to the final stage of order delivery. It is one of the factors that most increases logistics costs, since urban traffic congestion and its limitations lead to higher fuel consumption, lower productivity by limiting the capacity of deliveries per day, and more delays" Simon points out. 

To optimize last-mile management, it is necessary to establish strategies for delivery conditions, such as using pick-up points after the second failed home delivery or informing the recipient of the status of the package by calling or sending an SMS. In terms of transportation, some options are the consolidation of loads to group orders by zones or the use of light vehicles with better urban mobility. 

Use transport route management software and improve integration with the warehouse: a warehouse management system such as Easy WMS can facilitate coordination with transport agencies with the special Multi-Carrier Shipping Software module.

About Jason Simon

Jason Simon is a FinTech and digital payments expert who became involved in cryptocurrencies when they were first introduced. He enthusiastically follows what is happening in the evolving world of finance, excited about the prospects digital currencies offer global consumerism. When he’s not involved in helping advance the digital payments space, he enjoys spending time with his family and improving his community.

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Jason Simon

Fintech Consultant

Jason Simon

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