Electronic Commerce, more than having a warehouse
Let's visualize the following:
A company has a large distribution center. For years, they have worked efficiently receiving merchandise, organizing it in the warehouse, and shipping it to hundreds of points of sale. They are now entering the world of electronic commerce; surely all those years of experience will make opening a website, investing in advertising, and starting to fill orders from the distribution center simple.
Months later, the reality sets in: high operating and shipping costs, incomplete orders, delivery times of more than two days, and dissatisfied customers. Digital sales do not grow and you decide that your product "is not made to be sold online." As fast as you wanted to implement e-commerce, you dismissed it as a non-essential project for the company.
Your Distribution Center is designed to supply companies, not people: e-commerce is packed one at a time, not on pallets, boxes, or bales.
Unfortunately, this senario happens to a lot distribution centers. The most important thing you need to know when you are considering selling products over the internet is: Your distribution center is designed to supply companies, not people; in other words, e-commerce is packed one at a time, not in pallets, boxes or bales.
Let's imagine this example:
In my distribution center, I have to go to shelf 16A, which is located on the other side of the warehouse, to pick up a box with 50 blue ties that needs to ship to my point of sale in another city. Now let's take this same process to the world of e-commerce, where Mr. Smith requested a single blue tie to ship to his home in another city.
- Having ties in the same place in my warehouse will immediately entail a higher cost just by walking around the warehouse to pick up a box than to pick up a single tie.
- What do I do with the open box? How and where are they individually packed to send to the customer? Where are they labeled with the delivery address? Do I audit 100 percent of my orders?
- What about shipping? Do I use my units? Do I send them through a delivery service?
Now multiply these questions by the number of orders you expect, and you are going to spend the next month putting out fires.
warehouse shipping conveyor
The good news is that these questions and many more that you will have once you implement e-commerce, already have an answer.
These processes are continuously improving so you don't have to start from scratch. Expert consultants (such as Invenova), administration and logistics software, robots, automated systems, processes to optimize the use of labor, and more.
Creating an e-commerce department is a process that requires adequate planning: it needs space, personnel, processes, and operations independent of the distribution center. The most efficient way to operate - is to treat it as another point of sale, which requires being supplied independently and where they carry their logistics and sales process.
In the next article, we will try to answer the question that surely several must be asking. What do I do to have efficient e-commerce?
Pedro Carreras, General Director of Invenova, experts in logistics engineering.
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