Fulfillment services are in high demand as more companies are starting to expand their business online. According to recent data, the fulfillment services market is slated to reach nearly $273 billion by 2030 as e-commerce growth, peak shopping and gifting seasons, and the need for a fast and reliable order and delivery processing are driving overall demand. To cope with the challenges of working with multiple businesses, most third-party logistics companies offer tailored solutions and expertise to handle different supply chains, while others build distribution centers in strategic locations to reduce shipping times.
Gathering data from inventory, warehouse activities, and delivery may work even better to optimize logistics processes in fulfillment services. By analyzing data on the supply chain process, fulfillment companies can increase speed, lower costs, and improve customer satisfaction all at the same time. If you’re running a third-party logistics company, here’s how using analytics can optimize your e-commerce supply chain and improve your fulfillment services business operations.
Inventory Management
To streamline operations, most 3PLs rely on ecommerce fulfillment technology to handle the complexities of logistics. By using customized technology, a third-party logistics company can reduce upfront costs, create a positive delivery and unboxing experience, and build brand loyalty, making it stand out among similar businesses within its area. If you’re using a comprehensive set of tools that handles data for real-time tracking and reporting, you can have complete control over your warehouse operations, starting with inventory management.
Your fulfillment services business can use analytics to optimize inventory management in various ways. For instance, if your 3PL is working with a clothing retailer, your system can analyze their sales history, customer behavior, and market trends to predict future demand, then it uses the data to determine the right quantity of goods that your warehouse can hold. Since part of a 3PL’s core business offerings is stocking products from the companies that they work with, maintaining the right balance in inventory can prevent overstocking or stockouts. It also reduces holding costs and makes the most out of your warehouse space. What’s more, it eliminates manual errors in tracking or counting inventory. Using the data compiled, your system can provide stock updates and scale inventory management operations according to demand.
Logistics and Delivery
Getting their orders as soon as possible is a must for many customers as a recent survey revealed that 74 percent of online shoppers expect to receive their goods within two days. If delivery takes more than two days, 63 percent of customers will choose a different retailer for future purchases. While some 3PLs have perfected the art of prompt delivery, others are unable to deliver on time due to various reasons. These fulfillment companies, along with the retailers that they’ve partnered with, ultimately end up getting a bad reputation, which can impact sales and business longevity.
Some late deliveries are caused by human error or neglect, but others are due to uncontrollable factors such as extreme weather conditions and lags in order processing. Fortunately, analytics can help fulfillment services businesses to manage these issues. Your warehouse and transportation management system, for instance, can combine data on shipment locations with real-time weather conditions to predict delivery delays before they occur, enabling your 3PL to come up with a contingency plan to address and overcome this problem. It can also evaluate real-time traffic and road conditions to identify the safest and fastest routes, which can minimize delays and prevent accidents.
Meanwhile, to address lags in order processing, analytics can provide live insights into order accuracy, inventory levels, and order processing times, then raise alerts on operational challenges such as equipment failures or a sudden uptick in order volume. It can also provide insights which will allow supervisors to adjust workflows to accelerate processing and sort out bottlenecks within the supply chain. By identifying patterns in order fulfillment, 3PL businesses can pinpoint the factors which are causing delays, and make the necessary adjustments for timely deliveries.
Warehouse Staffing and Labor
Being short on staff can cause delays on warehouse operations processes, but being overstaffed can result in increased idle time and labor costs, as well as reduced productivity and efficiency. To improve warehouse staffing, 3PLs can use analytics to predict future labor demands by assessing order volume history and trends. So for example, if the data shows that your 3PL processes more orders during certain times of the year, such as on Mother’s Day, Black Friday, or the winter holiday season, then you can schedule the right number of staff on these dates and avoid overstaffing. Dashboards can also provide real-time insights into ongoing tasks so that managers or supervisors can send workers to where they are most needed, reducing idle time and improving overall productivity.
Analytics can provide insights to improve processes in third-party logistics. Consider using core systems for data analysis to optimize your fulfillment services business, and see how these can help to build your company’s reputation in the competitive 3PL market.
About the author:
Carina Black is a writer who loves to transform intricate concepts into engaging narratives. She is always eager to expand her audience and share her insights across diverse platforms. When she’s not writing, she enjoys discovering quaint cafes and spending quality time with her loved ones.
