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Sunny Nandwani

Founder and Managing Partner of Acuver Consulting- a leading supply chain management IT solutions company

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Importance Of Supply Chain Management In Indian E-Commerce Industry

Integrating new-age technologies or tools is further aiding brands to analyze their customers’ preferred fulfilment choices and past shopping behaviour to optimize inventory management, increase repeat purchase rates and balance fulfilment costs.

The e-commerce industry progressed quite well in the last couple of years, with the pandemic acting as a catalyst, accelerating the sector’s growth. Data gathered during this period suggests that the outbreak of COVID-19 has reshaped customer behavior and accelerated the growth in online shopping by around five years. The Indian e-commerce industry witnessed a six-fold increase in six years, going from $14 billion in 2014 to $84 billion today. This phenomenal headway is set to continue, and the industry is likely to reach a market valuation of $104 billion by 2025.

However, this growth brings along its own set of challenges.

Factors Influencing Supply Chain Management

Within a rapidly changing environment, some of the key trends that will profoundly impact supply chain management are innovations in businesses, expanding and demanding consumer base, the evolution of new-age technologies, including AI and big data, among others.

For instance, today, the new map encompassing the e-commerce customer journey isn’t just limited to visiting a website and buying a product. In fact, they prefer an omnichannel shopping experience. A survey showed that 7% of people exclusively shopped online while 20% of people shopped solely in brick-and-mortar stores. The remaining 73% moved across channels as per their convenience.

To keep pace with the paradigm shifts taking place in this segment, e-commerce companies are using multiple approaches to efficiently drive the next-generation supply chain processes. Some leading supply chain management practices adopted by them are:

Automating Supply Chain Management (SCM) or Supply Chain Processes

As consumer behaviour continues to evolve rapidly, it has underscored the need for digitization of the supply chain management – right from receiving the order to the last-mile delivery. E-commerce players today are investing heavily in automating supply chain processes. They are leveraging AI and Data Analytics capabilities to detect inconsistencies and issues like low inventory or delayed supply. Integrating new-age technologies or tools is further aiding brands to analyze their customers’ preferred fulfilment choices and past shopping behaviour to optimize inventory management, increase repeat purchase rates and balance fulfilment costs.

Warehousing

A sound warehousing strategy ensures that all products are accessible anywhere in the world. Some e-commerce giants opt for strategically placed warehouses near densely populated areas to

ensure immediate delivery. When a warehouse strategy is optimized and driven by technology, a company can ensure that the supply chain runs like clockwork. Accessing the need for greater flexibility in inventory management, e-commerce brands are also implementing advanced multi-warehouse inventory management systems. It is thereby helping them streamline warehouse operations across multiple locations, redirect purchase orders and ensure faster deliveries.

Enhancing Visibility

Supply chain management is all about visibility. Proper warehousing will enable you to track the inventory status and its possible movements across the various stages of delivery. Once a customer places an order, the e-tailer can track the movement of the product right from its creation to delivery at the doorstep. This further helps the seller forecast and project future demands, manage inventory better, and optimize the product’s life cycle.

The Way Forward

As the next-generation supply chains evolve, it is critical for the segment to manage global volatility and build a resilient and flexible supply chain that can respond to uncertainties and rebound to the original state from any mishap within a short span of time.

An efficient supply chain management is critical for e-commerce businesses as it eliminates several stages of retailers, distribution, and outlets, subsequently reducing the overall cost of products. It also empowers e-commerce businesses to trade globally. A well-organized supply chain management enables companies in the e-commerce space to easily import raw material from anywhere and export their finished product to any country. Therefore, high-efficiency supply chain management operations are no longer a luxury for e-commerce companies. They are, in fact, the foundation on which e-commerce players are either succeeding or failing.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house



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