E-Commerce Commentary: Three Ways Shippers Can Improve Customer Satisfaction
The Amazon Effect continues to weigh heavily (pun intended) upon the supply chain. Consumers expect to receive packages at their homes within a few days—or within a day—of placing an order, and the demand for lightning-quick fulfillment coupled with the myriad of small-order additions has led to a complex operating environment for supply chain leaders.
A 2017 Statista survey of consumers found that shipping was the second-most widely reported reason for consumer dissatisfaction when online shopping. Another Statista survey found that lost packages and late deliveries were the two most common causes of consumer dissatisfaction.
Any one of the various moving supply chain parts may be responsible for the delay. For instance, inventory discrepancies at warehouses might be the reason for a slow shipment—if a consumer places an order for an item that isn’t actually in stock (despite what the website says), the warehouse cannot fulfill the order and have it delivered within the expected timeframe.
Shippers should turn their attention to three frequently overlooked components of inventory record management:
- Short shipment holds
- Normalizing inventory adjustment codes
- System connected inventory adjustments
Each of these facets can affect inventory accuracy and, ultimately, consumer satisfaction. Address them to promote a better customer experience.
1) Don’t let short shipment holds bog down the entire warehouse
Late-arriving packages are often the result of inventory inaccuracies where the quantity of an item listed is less than the quantity received. When short-shipped orders happen, they can create an inventory freeze and affect the warehouse’s ability to fulfill additional orders. Rather than freeze a warehouse’s entire inventory, shippers can ensure fulfillment systems unlock held inventory in order to fulfill orders not associated with the SKU in question.
2) Normalize inventory adjustment codes across inventory pools
As companies grow, they tend to use a number of different warehouses in disparate geographic locations. As the number of inventory pools (and thus the number of warehouses) increases, managing inventory across those pools often becomes more complex. After a short-shipped order, for instance, if inventory adjustment codes at different warehouses are not all synced, it’s difficult to know which held items to unfreeze.
Normalizing inventory codes across all warehouses seems like an obvious answer, but it is a solution that many companies leave out of their maintenance routines. Normalizing codes provides a better idea of the items that are potentially available and helps with forecasting when an order can be fulfilled.
3) Connected Inventory-Adjustment Systems
A lack of centralized management tools is a common root cause of issues such as these. Identifying shipment holds and syncing inventory adjustment codes won’t help improve short-shipped rates unless there is a way to manage all of those changes. Before addressing some of these components, organizations should ensure all of their databases and other inventory processing systems are connected and working in lockstep. Connecting everything helps highlight inventory discrepancies and can stop issues before they start.
Simplify and Streamline to Address Inaccuracies
A study exploring over a quarter-million SKUs across one retailer’s 37 stores found that 65 percent of inventory records were inaccurate. The study also found that product categories were responsible for much of the variance between inventory records, and that store environment complexities and distribution structures explained more than two-thirds of the product category variance.
Essentially, implementing tools and processes to simplify store environments and streamline distribution is the key to fixing inventory inaccuracies and to ensuring consumers remain happy. Following these three suggestions can help organizations better position themselves for future growth and retention.
Jonathan Tran is the product marketing manager in charge of the Shipwire Platform at Ingram Micro Commerce & Fulfillment Solutions. He represents the voice of platform merchants in the product development process and develops go-to-market strategies.