US E-commerce Industry Overview
The shopping habits and spending patterns have shifted dramatically from what it was ten years ago. Today, customers expect their groceries and apparels to arrive on their doorsteps quickly and demand the ability to track their items every step of the way. Moreover, as companies the US e-commerce industry are now offering ‘next day’ or even ‘same day’ delivery, small e-commerce companies are in the need to adjust their supply chain operations and keep up with these trends. To stay competitive, small companies in the US e-commerce industry will need to optimize their warehouse setup and enhance the order fulfillment process.
Nearly 60% of Americans say they are willing to shift to other e-commerce companies that can offer same day or next day delivery. By supporting you in revamping your supply chain operations, we can help you to achieve this strategic objective. RFP here.
Business Challenge
A medium-sized US e-commerce industry client encountered a steady decline in sales for two consecutive years. Also, as leading e-commerce companies in the US started implementing new operating models supporting same-day delivery, the client was losing ground to competitors. The US e-commerce industry client, therefore, wanted to assess their supply chain complexities, implement vendor compliance programs, and make the inbound supply chain more efficient. However, this required demand forecasting and real-time inventory tracking. The US e-commerce industry client, therefore, sought to collaborate with Infiniti Research to leverage their expertise in offering inventory management solution.
Other challenges faced by the US e-commerce industry client were:
- Lack of adequate infrastructure
- Lack of real-time inventory tracking process throughout the supply chain
- Siloed logistics management system
- Lack of visibility across multiple channels and warehouses
- Lack of understanding of demand fluctuations for product category over time
- Lack of ability to forecast future demand, including seasonal changes
- Lack of ability to set minimum viable stock levels
Efficiency, agility, and great customer service are crucial when it comes to achieving success in the e-commerce industry. We can help you achieve all these strategic objectives. Contact us here.
Our Integrated Approach
In the initial phase of the inventory management solution, the experts worked closely with the client’s supply chain team to understand their supply chain complexities and develop a supply chain engagement model. Also, the experts analyzed a list of key components, including plant location and size, warehouse designs, delivery models, and warehouse efficiency models. Besides, the experts focused on maximizing space efficiency to help the client keep their inventory organized.
The second phase involved identifying third-party services providers to help the client implement an automated storage and retrieval system.
The third phase of the engagement involved conducting geographic market segmentation to help the client categorize their valuable customers based on their locality. Based on this data, the experts recommended the client to invest in warehouse space and distribution centers in areas with highest product demand.
The fourth phase involved demand forecasting analysis. In this phase, the experts helped the client to better forecast future demands based on previous sales data. Also, the experts helped the US e-commerce industry client to forecast future trends in consumer spending and adjust inventory levels accordingly.
The final phase of the inventory management solution involved identifying third-party service providers to implement real-time inventory tracking system and helping the US e-commerce industry client to keep track of their inventory throughout the supply chain.
Business Outcome
Infiniti’s inventory management solution helped the US e-commerce industry client to make the inbound supply chain more efficient, set up multi-distribution center operation, increase the number of picked orders per day, and reduce outbound shipping costs.
The US e-commerce industry client was also able to understand basic product category demand and stock up products with the highest demand. By implementing SCM software, the client was able to keep a pulse on inventory, gather real-time inventory data within one convenient system, and take advantage of opportunities and boost sales.
Besides, the client was able to optimize their warehouse setup, develop an inventory management framework to coordinate supplies at multiple locations, and speed up shipping processes. The client was also able to optimize functions such as forecast-to-stock, order-to-cash, prepare effective production schedules, and optimize inventory levels to significantly lower operating costs.
With the insights obtained from Infiniti’s inventory management solution, the US e-commerce industry client was able to streamline their supply chain structure, set up warehouse space and distribution centers in areas with highest product demand, and reduce order-to-ship timing. Besides, the implementation of automated storage and retrieval system helped the client to automatically place and retrieve loads from warehouse locations with precision, accuracy, and speed.
Within six months of leveraging our inventory management solution, the US e-commerce company reduced order-to-ship timing from 4 to 48 hours, achieved annual transportation cost savings of around 25%, and realized savings of over $2.3 million.
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