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E-commerce Logistics Management: How can you overcome Supply Chain Challenges in the Philippines?

Team Unicommerce — Sat, 28 Oct 2023 00:00:55 +0000

Can you think of a circumstance where there’s no detailed arrangement or plan regarding the movement of inventory from its starting point to the point of delivery? The whole idea of managing e-commerce operations will remain pointless if you don’t have a systematic approach to follow by!

While the warehouse, inventory, and order management could be some of the crucial aspects of your business operations, the one element that binds them together is logistics. What exactly is logistics and what is its role in running a business successfully, especially if you are operating in the Philippines?

Right from determining the order routes (based on expediency, regulatory environments, etc.) to aligning shopping providers as per the nature of the order, a systematic logistics management system attributes to minimized operational costs and amplified business profits.

Growing E-commerce Opportunities in the Philippines!

Are you planning to start your own e-commerce empire in the Philippines or you are established in the country but want to expand operations and boost business profits? Well, the answer is to ‘Manage your Value chain by organizing logistics operations’.

Despite the Philippines not keeping up with the growing trends of e-commerce digital in the early 2019s, the country’s economy today represents major opportunities for all sorts of e-commerce businesses. So amid such growing economy, wouldn’t you also want to grow your bottom line?

Before we go deep into the topic, we would like you to first understand the logistics challenges that e-tailers like you are already facing and couldn’t grow any further. Don’t you want to find that out?

Logistics Challenges that E-commerce Businesses are Facing in the Philippines!

E-commerce businesses in the Philippines are increasingly encountering unique logistics challenges as the market expands, here are a few major challenges:

1. Error-Prone Manual Processes

Even today after the advancement of technology, businesses are highly dependent on manual logistics operations. For instance, let’s take the case of the AWB number into consideration. In order to generate the AWB number of a consignment, your dependency as a seller increases on the logistics partner. The whole process of generating and assigning the number to each shipment takes both your and your logistics partners’ time. Not to mention that the discrepancies in the value chain along with the longer lead times could become the by-product of manual processes.

2. Faulty Infrastructure

The Philippines is roughly classified into two main regions; Luzon and VisMin (Visaya & Mindanao). While travel is difficult from one region to another, there are many linguistic barriers as well as the language; Tagalog and Bisayaof both regions are totally different from each other. Moreover, the status of transportation in the Philippines could be defined by congested streets and traffic issues, which only increases the lead time of order delivery. And this becomes an absolute problem when it comes to the delivery of perishable goods – given their shelf life is less and they may get expired before reaching the destination. The problem gets magnified when the delivery platform you have integrated into your system does not deliver to a specific location or isn’t aware of the nooks & crannies of the locality.

3. High Logistics Cost

The absence of the larger authorities around the country to track the movement of the goods generally create inconsistencies in the logistics, increasing the cost of shipping. Now, these overhead expenses could either be borne by the seller or the consumers. While the former could actually minimize the profit margin, the latter could lead to poor customer service, which would eventually discourage them to shop more. But imagine if you would have the choice the partner with different courier partner/shipping aggregators as per your preferences, then you might have saved your operational costs – given you can allot the orders based on the type of the shipping partner.

Know more about How to Sell On Lazada Marketplace in Southeast Asia?

4. Cumbersome Returns Processes

Right from manufacturing & production to transportation & distribution, operational glitches and distorted messages are bound to happen. And these all lead to high order returns. While returning an order is a cumbersome process, the failure could cost you both unsatisfied customers and heavy losses. Be it Customer Initiated Return (CIR) or Return To Origin (RTO), you can’t ignore the operational costs associated with them.

When the returned products re-enter your supply chain, it challenges your operational efficiency. Not only does it acquire your warehouse space, but there’s also a risk of it depreciating quickly than the other products. To help you understand the various struggles businesses witnesses when the customer returns a specific product, we have culled out a list of some main activities included in the process.

Organize the warehouse space
Allocate a dedicated area for returned products
Segregate returns items based on their nature and type

Coming over to the bad returns (where your products get damaged in the process) you not only have to take care of the operational costs, but the product cost will also make its place in your expenses. But imagine if you would have systematic doorstep QC systems, you would not have to think about the expenses, don’t you think so?

As we mentioned earlier, logistics is what binds all of the other supply chain management solutions; warehouse management, inventory management, order management, etc., together. To overcome the above-mentioned challenges, your business needs a consolidated view via a single platform that can further simplify your logistics management. Why?

7 Reasons to Centralize your Logistics Management in the Philippines!

1. Easy Returns

As returns management helps businesses enhance their customer’s experience, it’s always advisable to seek help from a solution provider who can manage the end-to-end process including sorting, integrating with smart shipping providers, providing AI-based reports, etc. But the question is why is it necessary to deploy a returns management system?

By serving the demands of your customer, you are not only enhancing their experience but also retaining social proof, as the chances to get positive feedback increase with the improved customer experience. Not to mention the fact that incorporating doorstep quality check processes in handy can help overcome the causes of bad returns.

2. Improving value chain visibility

You need to have complete visibility of the entire workflow; inventory receipt, storage, management of orders, and shipment. A centralized system enables you to ensure the shipments are following a prescribed route throughout the routing process and in case of any sort of disruptions, you can send notifications, alerts, etc., to the stakeholders so that actions can be taken on or before time.

3. Reduce extra costs

By centralizing the whole value chain from a single panel, you can track your operational costs and know when you are going over the budget. This way not only can you reduce that extra cost but also disburden your customers from delivery costs. Don’t you think?

Moreover, if you have a choice of shipping aggregators/courier partners, will it not become easier for you to leverage the specialties of each based on the region, nature of the order, situations, etc.? Also, you can align your delivery packages with the best-in-class logistics players in the area who are familiar with the area and the surroundings.

4. Transparent operations

The integration of multiple processes, modules, and workflows lets you attain a well-structured organization where the information gets disseminated systematically. Also, the automation in AWB generation can save you time all while letting you monitor the fulfillment process from start to end. This way you can showcase the path of transparency to your customers all while achieving better accuracy in the inventory.

5. Enhance customer experience

Customer experience is not only limited to the ultimate purchase. Right from sending the order tracking details to delivering the order on or before time to supporting their queries throughout the process via phones, emails, etc., there are multiple aspects when it comes to retaining your customers. By integrating your order management with logistics, you can perform end-to-end tracking of shipment status all while offering a top-notch experience.

6. Identify potential order returns

You can set up an elaborative outbound quality check (QC) process amid the order processing process and ship the product only if it passes the QC test. This way you can reduce your order returns dramatically. To execute this, you need your logistics and warehouse management in place by centralizing your operations.

7. Achieve better order fulfillment rates

The main aim of any business is to process the received order as quickly as you can. To automate and streamline the operations, you can outsource e-commerce enablers. With the operational flow being automated, you can perform several tasks including; allocating the warehouse, managing the inventory levels, and monitoring where the product is placed. By simplifying these processes, you can hasten the completion of the delivery process and decrease the order fulfillment time.

The Solution to Overcome Challenges – Consolidated Logistics Management System!

We have already understood the challenges that sellers are witnessing when it comes to managing logistics in the Philippines, but what’s the solution to these problems?

Do you think that integrating with the leading logistics companies alone will solve your problem? But what about the processes associated with it? Can you really fulfill orders faster if your order management processes are not synchronized? Or can you actually perform inward and outward logistics operations if the layout of the warehouse is not clear?

A problem that the sellers across the Philippines have witnessed is the contingency situations and logistics regulations. Moreover, the overall infrastructure is still under development to incorporate complete digitalization and automation of processes. So given all these challenges, can you actually scale your online business in the Philippines? The answer is YES! But one thing that you definitely need to take care of is having a consolidated view of your e-commerce operations. While the integrated logistics management process keeps your operational costs low, it also reduces the dispatch time and keeps the SLAs intact.

Logistics vs Supply Chain Management: Key Components, Benefits, Comparison

Team Unicommerce — Wed, 18 Jan 2023 08:56:08 +0000

Table of Contents:

Introduction
Definition
Key Components of Logistics and Supply Chain Management
Benefits of Effective Logistics and Supply Chain Management
Comparison: Logistics vs Supply Chain Management
Summary

In today’s globalized world, efficient logistics and supply chain management are crucial for businesses to stay competitive. The success of any organization heavily relies on its ability to deliver products or services to customers in a timely, cost-effective, and sustainable manner. This on-page blog will delve into the intricacies of logistics and supply chain management processes, highlighting their key components and their significance in optimizing operations.

What is Logistics and Supply Chain Management

Logistics encompasses the planning, implementation, and control of the flow of goods, services, and information between the point of origin and the point of consumption. On the other hand, supply chain management refers to the coordination and management of all activities involved in procuring raw materials, transforming them into finished products, and delivering them to customers.

Key Components of Logistics and Supply Chain Management

Procurement: The process of sourcing and acquiring raw materials, components, or finished products from suppliers. Effective procurement ensures the availability of quality inputs at competitive prices.
Inventory Management: Involves optimizing the quantity, location, and timing of inventory to meet customer demand while minimizing carrying costs and stockouts. It requires balancing supply and demand uncertainties.
Warehousing and Storage: Warehouses play a pivotal role in storing and managing inventory. They facilitate order fulfillment, enable consolidation and sorting, and provide value-added services such as packaging and labeling.
Transportation: The movement of goods between various points in the supply chain. Selecting the appropriate transportation mode, route planning, and carrier selection are critical to ensure timely delivery and cost optimization.
Demand Planning and Forecasting: Accurate demand forecasting helps organizations plan their production and inventory levels effectively. It involves analysing historical data, market trends, and customer insights to predict future demand.
Production and Operations Management: This encompasses the planning, scheduling, and control of production processes to ensure the efficient utilization of resources and timely production of goods or services.
Information Technology and Data Analytics: Leveraging technology and data analytics tools allows organizations to enhance visibility, track shipments, optimize routes, and improve overall supply chain performance.

Benefits of Effective Logistics and Supply Chain Management

Cost Reduction: Streamlining processes, optimizing transportation routes, and minimizing inventory levels can lead to significant cost savings.
Enhanced Customer Service: Efficient logistics ensures on-time delivery, accurate order fulfillment, and proactive communication, resulting in improved customer satisfaction and loyalty.
Competitive Advantage: Effective supply chain management can be a source of competitive differentiation, enabling organizations to respond quickly to market changes and customer demands.
Sustainability and Environmental Impact: Optimizing logistics processes can lead to reduced carbon emissions, improved fuel efficiency, and minimized environmental impact, contributing to sustainability goals.
Collaboration and Integration: Building strong relationships with suppliers, customers, and partners fosters collaboration and facilitates seamless integration across the supply chain, resulting in improved coordination and efficiency.

Supply Chain Management and Logistics are closely related concepts, but they have distinct focuses within the realm of operations and business management. Let’s explore the differences between the two:

Difference between Logistics and Supply Chain Management

Definition:

Logistics: Logistics refers to the specific activities involved in the movement, storage, and flow of goods or materials from the point of origin to the point of consumption. It focuses primarily on the physical aspects of transportation, warehousing, inventory management, and order fulfillment.
Supply Chain Management: Supply Chain Management (SCM) encompasses the end-to-end coordination and integration of all activities involved in sourcing, procurement, production, and distribution of goods or services. It includes planning, execution, control, and monitoring of activities across multiple organizations and stakeholders to deliver value to customers.

Scope:

Logistics: Logistics has a narrower focus and deals with the operational aspects of managing the physical flow of goods, including transportation, warehousing, packaging, and inventory management. It is more concerned with the execution of specific tasks within the supply chain.
Supply Chain Management: SCM has a broader scope and encompasses the entire network of organizations, processes, and activities involved in delivering products or services to end customers. It includes strategic planning, coordination, and collaboration with suppliers, manufacturers, distributors, retailers, and customers.

Integration:

Logistics: Logistics focuses on the efficient management of specific activities related to transportation, storage, and inventory. It plays a critical role in supporting the overall supply chain objectives by ensuring timely delivery, minimizing costs, and optimizing resource utilization.
Supply Chain Management: SCM emphasizes the integration and coordination of various functions and processes within and across organizations. It involves aligning the goals, activities, and information flow between different stakeholders to optimize overall supply chain performance.

Timeframe:

Logistics: Logistics operates within a shorter timeframe, typically dealing with day-to-day operations and tactical activities. It focuses on the execution of tasks to ensure smooth flow, accurate inventory management, and timely order fulfillment.
Supply Chain Management: SCM takes a long-term perspective and involves strategic decision-making, such as network design, supplier selection, and demand forecasting. It addresses the entire lifecycle of a product or service, from raw materials sourcing to final customer delivery.

Customer Focus:

Logistics: Logistics contributes to customer satisfaction by ensuring that products are delivered on time and in good condition. It focuses on meeting customer expectations regarding order fulfillment, transportation reliability, and product availability.
Supply Chain Management: SCM places a strong emphasis on understanding customer needs, demand patterns, and market dynamics. It aims to create value for customers by delivering the right products, at the right time, in the right quantities, and at the right cost.

Conclusion:

Logistics and supply chain management are vital components of modern business operations. By strategically managing the flow of goods, services, and information, organizations can achieve cost efficiencies, enhance customer satisfaction, and gain a competitive edge. The ever-evolving landscape of logistics and supply chain management requires continuous adaptation to technological advancements and industry trends. Embracing innovative practices and leveraging data-driven insights will empower organizations to optimize their logistics processes and navigate the complexities of the global marketplace.

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