How Fulfillment Companies Can Capitalize on eCommerce

by Derek Singleton on 2011-12-17

The ecommerce market is exploding across the world. In the US, the market is valued at £128 billion while in the UK it is valued right around £44 billion. All this activity is great news for companies that operate online sales. However, the growth of the online shopping industry also means that distribution centers have a host of logistical challenges ahead of them. I’d like to share three ways that distributions centers can capitalize on the ecommerce opportunity.

Reduce package sizes - These days, shippers charge for the amount of space a package takes up as well as the weight of the package. Because of this, distributors need to focus on reducing package space. There are several ways to go about this, but one of the most innovative ways I’ve found is Packsize. Packsize is an automated packaging system that can build a box to the size of the package you’re shipping. This reduces the amount of space used in the shipper’s truck as well as frees up space in the warehouse.

Improve delivery route efficiency - Intelligent routing is an essential component to successfully managing online order fulfillment. Fulfilling online orders greatly increases that need to be shipped so it’s wise to analyse transportation routes from a cost-efficiency standpoint. Most wholesale distribution software (click here for comparisons of common systems) typically supports a transportation management functionality that can help determine the smartest routes to take when making deliveries. My favorite example of how effective this can be is how UPS saved 10 million gallons of gas from minimizing left turns.

Step back to assess what works – Improving the efficiency of things like packing and routing is essential. However, it's all for naught if you aren't analyzing how efficiency improvements are impacting actual business operations. For instance, it may be more efficient to pick and pack orders on an individual basis. But if several orders are going to the same location, it might be time to reassess picking and packing operations. In other words, it's important to know how efficiency gains impact the bottom line. To prevent mistakes like this from happening, it's a good idea to take a random sample of orders leaving the facility and ask how they could leave the facility in a better way.

These are just a few of ideas on how to manage distribution operations in the age of online sales. To see a more comprehensive list, visit my website at: How Distributors Can Thrive With eCommerce.