ShipHero recently launched The Fulfillment Innovation Wheel to help 3PLs understand what capabilities and service offerings they need to implement in order to be successful and to help online retailers and brands choose which 3PL is right for them by allowing them to ‘check the boxes’.
The Fulfillment Innovation Wheel listed a set of twelve (12) capabilities that fulfillment providers and logistics companies should implement to continually delight their customers and push themselves towards greater success and innovation.
The twelve capabilities are:
- 2-day delivery
- Same day shipping
- At the box personalization
- Designed for returns
- Sustainable fulfillment
- Resilient shipping
- Distributed fulfillment
- Data now
- Scale up and out
- Integration stack
- Professional services
In this article, we will be diving into Capability #6: Resilient Shipping.
And be sure to stay tuned for future articles as we deep-dive into each capability.
Capability #6: Resilient Shipping
Is your business sufficiently protected from supply chain risks like extreme weather events, supplier disruptions, and well… pandemics?
COVID-19 has certainly had an immense impact on global trade and domestic supply chains, but this hasn’t been an isolated incident, with SARS, measles, swine flu, ebola and avian flu all resulting in similar yet less severe business interruptions at a global level. Moreover, domestic supply chains are frequently plagued by extreme weather events, supply shortages, and carrier delays.
Supply chain resilience refers to a company’s ability to conduct normal business operations despite sudden disruptions or unexpected events that negatively affect supply chains and order fulfillment. Resilient supply chains are also able to quickly recover from outages and achieve pre-disruption levels of functionality.
As an example, many FBA merchants use ShipHero for FBM to avoid stock outs, maintain emergency inventory stockpiles, and provide diversified fulfillment options. In this article, let’s uncover how businesses can build a resilient supply chain and delivery network.
What Is a Resilient Supply Chain?
To start building your roadmap towards supply chain resiliency, you need to know what a resilient supply chain looks like. According to a recent study, these are the five core principles of a resilient supply chain:
- Rapid detection, response, and recovery. Your business must be able to quickly detect events, identify optimal response options, and achieve full-scale recovery.
- Complete oversight and control. Your business should have end-to-end visibility into your supply chain, along each step of the fulfillment journey, as well as the ability to take action quickly.
- Preparation for any scenario. Your business must prepare for a disruption before it happens with documented incident response plans, complete with specific steps and responsible parties for each scenario.
- Built-in redundancies and continuity. Your business must be able to account for process failures and bottlenecks, and provide additional surge capacity when disruptions arise.
- Intelligent demand planning. Your business can proactively avoid disaster scenarios with distributed fulfillment and effective inventory management.
Are these five principles present when looking at your own supply chain?
If you outsource your fulfillment, ensure that your fulfillment provider can guarantee a resilient supply chain with the above principles.
If your business fulfills in-house or you are a 3PL provider, consider building in the following practices for a resilient supply chain.
Building Supply Chain Resiliency
Hope for the best, plan for the worst. Your business can minimize damage from supply chain risks with the following best practices:
Map Out Your Fulfillment Processes
By documenting your end-to-end fulfillment process, you have a powerful visual tool to understand your supply chain and identify any possible pain points. Consider creating a process diagram and list relevant people at each step.
As for data, how does information flow through your supply chain? Is it automated? Or does it heavily rely on the copy/pasting of a single employee? By creating a full picture of how data flows through your supply chain, you can identify possible bottlenecks or dependencies that could inflict serious damage to your supply chain in times of crisis. Consider creating a process diagram of how data moves around your business (i.e., data flow diagram) and list relevant people at each step.
Get Inventory Insight and Control
Is your inventory where it should be at any given moment? Proper inventory management helps you avoid surplus inventory gathering dust on warehouse shelves and accumulating storage fees, while guarding against stock-outs and shortages in certain regions. Not to mention, intelligently distributed inventory allows you to reduce shipping costs and decrease delivery times.
Consider investing in modern inventory management software to get oversight and control of your inventory, or switch to a fulfillment provider, like ShipHero, that uses advanced warehouse management software across their network of fulfillment centers.
Build Automation Rules
In times of crisis, stressful or crunch-time decision making is very susceptible to human error. Automation can eliminate human interference in your core business processes, while leaving room for intervention when needed.
Consider implementing automation rules in your inventory management software; for example, automation rules can help place orders with the most cost-efficient suppliers when inventory hits certain levels, or automation can be used to choose the optimal delivery carrier when many face delays.
Provide Real-Time Collaboration
Do you have the ability to access and share supply chain information in real-time? Being able to access up-to-date information and reporting enables better decision-making and emergency planning. Consider implementing procedures and systems to get the right data to the right decision makers.
Manage Product Returns
Product returns introduce a lot of complications in your supply chain, including unpredictable inventory levels, increased costs, and reduced conversions — and this is amplified during situations of surging demand or delayed shipments. With a more effective return strategy (i.e., reverse logistics), your business will be more prepared for when the ship hits the fan.
Consider designing your supply chain and inventory management process with returns built in, or switching to a fulfillment provider that offers return credit and advanced reverse logistics capabilities.
With the above best practices in place, your data-driven supply chain will be optimized for resiliency, and be able to quickly detect, respond to, and recover from any sudden supply chain disruptions.
Our customers love that ShipHero provides a resilient and data-driven supply chain that can offer 2-day shipping anywhere in the contiguous United States at simple and transparent pricing. We also prioritize ground shipping, making for an eco-friendly supply chain. We attribute this success on the Fulfillment Innovation Wheel to Capability #6: Resilient Shipping.
Stay tuned next as we cover Capability #1: 2-day Delivery! Get 2-day, today. ShipHero.
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