Understanding & Improving an End-to-End Supply Chain
September 20, 2021
For many growing and established direct-to-consumer (DTC) brands alike, the supply chain is the most critical but also most challenging aspect of their operations.
The process involves complex steps, from procurement, to shipping products to end users, often resulting in a lack of visibility and high operational costs. No wonder many businesses struggle with supply chain delays and poor customer service!
Efficient end-to-end supply chain planning can help solve these challenges.
In this post, we take a look at how you can improve your end-to-end supply chain operations and create a seamless workflow to enhance visibility and reduce operational costs.
Let’s dive in.
What does “end-to-end supply chain” mean?
End-to-end (E2E) supply chain refers to all supply chain processes, from logistics procurement to the post-sale customer experience.
E2E supply chain management aims to provide a seamless workflow from one stage of the supply chain to the next. The goal is to reduce supply chain delays, improve supply chain visibility, and improve operational costs while meeting customer demand and expectations.
Why E2E visibility is important in today’s ecommerce economy
Proper supply chain management relies heavily on end-to-end visibility. Without knowledge of how operations are performing across the entire ecommerce supply chain, online retailers will have a hard time making the right decisions or responding to unexpected events appropriately.
Every supply chain is susceptible to disruptions — whether it’s due to inclement weather, accidents, loss of labor, natural calamities, IT outages, or cyber attacks.
But even before the pandemic, 62% of companies have already experienced significant financial loss from not having enough visibility over operations when a disruption occurred.
Having real-time visibility can help you build a more resilient supply chain by mitigating risk and responding to situations more efficiently.
What all is included in end-to-end supply chain management?
End-to-end supply chain management involves all the steps in your supply chain, starting with sourcing ecommerce inventory to managing the post-purchase experience.
Here’s an overview of the critical stages throughout an end-to-end supply chain.
Procurement & manufacturing
It’s common for business owners to make the assumption that the supply chain starts after inventory is sourced and received, and instead the only focus is on getting finished goods from the warehouse to the end user.
In truth, the E2E supply chain process begins with procurement logistics, which involves sourcing inventory from suppliers and manufacturers.
In order to optimize stock availability, you need to also factor in production and warehouse receiving lead times. By not factoring in potential delays during this phase, you risk facing stock issues later on such as backorders.
In terms of product pricing, if the price of raw materials go up, so does the price of finished goods. When this occurs, you will need to be prepared to communicate with your customers of price increases sooner than later if you choose to go this route.
At this stage of the supply chain, you already have your available inventory ready to sell. Now, it’s time to move inventory through the supply chain and eventually to your customer’s front door.
Not only does it involve storing inventory close to where customers are located (to ensure fast, affordable delivery), but it also involves the implementation of a multichannel retailing strategy, which refers to selling product across different sales channels.
A well-executed distribution strategy can improve profit margins and help your brand grow faster. How you get products in front of the right audience, to how you quickly you can deliver products to customers is all part of managing a distribution strategy.
Once inventory is received, it must stored properly to ensure a seamless warehouse picking and packing process.
There are several options when it comes to storing inventory: self-storage, renting a warehouse, or in a 3PL’s fulfillment center. Though all options are viable, it comes down to what works best for your business.
Keep in mind that storage can be a hefty cost if not managed correctly. The cost of just holding or storing inventory can be high, especially if it is a variable cost. The more inventory you have, the more you will pay.
Many brands save on storage during the beginning stages of their business with in-house fulfillment, but they’ll be spending more time on fulfilling orders, which can be a large opportunity cost.
When brands start to manage a high volume or orders as more orders come in, outsourcing your storage and fulfillment needs to a 3PL puts your inventory exactly where it needs to be when shipping to customers. This ultimately speeds up the process, saves on logistics costs, and improves order accuracy rates.
Shipping & last-mile delivery
Reliable and cost-effective shipping is one of the important stages of the supply chain as it helps to maintain customer loyalty and customer satisfaction. If your customers are not receiving their products fast enough, it’s easy for them to look for your products elsewhere with better delivery options.
Shipping incentives are used as marketing tool, such as 2-day shipping and free shipping. Fast-growing online brands put a lot into their shipping strategy by offering different shipping methods and partnering with a mix of shipping carriers that will help them deliver.
However, managing multiple carriers and offering affordable shipping can be a complex, time-intensive, and difficult process.
That’s why many brands partner with a 3PL like ShipBob that partners with all major carriers, as well as regional parcel carriers. 3PLs negotiate bulk shipping rates and pass the savings on to you and your customers.
Sales & customer service
As your business grows, providing quality common service is key. The retail supply chain depends on have with your business and could influence customer loyalty. To do this, you must provide top-notch ecommerce customer service that is in tune with your supply chain, from understanding the shipping policy to being able to track orders.
Common end-to-end supply chain challenges
Even the most well-established DTC brands are susceptible to challenges in the end-to-end supply chain. Some of the most common challenges include the following:
Lack of visibility
According to Statista, visibility is the biggest challenge faced by supply chain executives, especially when it comes to inventory.
Lack of visibility is why many brands order more inventory than they actually need or don’t order enough to meet demand. Improper inventory management can lead to higher costs and reduced customer satisfaction.
While there are a lot of steps that are crucial for enhancing supply chain visibility, implementing technology and automation can help.
For instance, ShipBob’s fulfillment technology tracks inventory movement in real time. Thus, you’re able to collect data and performance that provides crucial supply chain analytics for everything from inventory flow to shipping performance.
“We have a Shopify store but do not use Shopify to track inventory. In terms of tracking inventory, we use ShipBob for everything — to be able to track each bottle of perfume, what we have left, and what we’ve shipped, while getting a lot more information on each order.
The analytics are super helpful. We download Excel files from the ShipBob dashboard all the time and use them to analyze everything from cancelations, to examining order weights, to checking on whether ShipBob is shipping orders on time.”
Ines Guien, Head of Logistics at Dossier
High operational costs
Operational costs throughout the supply chain are paid to manufacturers and suppliers, as well as warehousing, shipping carriers, freight brokers, and a variety of other third-parties that make up your logistics operations.
Without keeping a close eye on operational costs throughout the supply chain, you risk cutting into ideal profit margins.
ShipBob is a 3PL that makes it easy to track logistics costs, from storage to fulfillment costs and shipping. Along with offering transparent billing, ShipBob provides insights into how costs are being distributed.
From the ShipBob dashboard, you can get insights into:
- Average storage cost per unit
- Fulfillment cost per order
- Total number of bins/shelves/pallets that you’re being charged for
- Average order value and shipping cost by shipping method and order
- How much you can save by optimizing inventory allocation
“We need to deliver quickly and inexpensively. Since switching to ShipBob from our previous 3PL, our fulfillment cost on comparable orders went down by 25%.”
Michael Peters, VP of E-Commerce Operations at TB12
Low accuracy rates
Have you ever had to resort to inventory write-offs to balance out your records and match the inventory you have in stock?
When you store inventory yourself or rely on a subpar inventory management system, you’ll often struggle with low inventory accuracy rates. This can also seep into your order fulfillment process, resulting in poor order accuracy rates.
For example, if orders flow in and you can’t fulfill them, it can lead to backorders or split shipments, which can delay the shipping process or increase costs.
However, investing in the right inventory automation software and/or partnering with a 3PL can solve for low accuracy rates. For instance, ShipBob offers real-time inventory tracking to ensure all inventory is accounted for. This helps improve inventory accuracy by providing more visibility and therefore avoiding inventory shrinkage.
ShipBob’s technology is also designed to eliminate fulfillment errors to maintain a high order accuracy rate. In addition, the ShipBob team closely measures ‘support cases per order,’ which is a big indicator of how well we’re performing as your logistics partner (i.e., how often you have to reach out when there are issues).
“The old 3PL charged for each pick and pack, wouldn’t take responsibility for any errors they made, and getting orders fulfilled would take up to 20 days in some cases.”
Torii Rowe, COO & Co-Founder of MANSSION, a ShipBob merchant
Poor customer service
95% of shoppers will tell others about their negative customer service experiences. Poor customer service happens when you fail to provide quick resolutions or follow-up on time.
Once orders are shipped, order tracking must be generated and sent to the customer. This way, you can keep customers in the loop and reduce the amount of customer service inquiries related to orders in process.
For example, ShipBob’s fulfillment solution enables you to create an efficient returns management process by allowing our team to handle returns on your behalf or enabling you to better manage returns on your own by integrating our technology with a leading returns platforms such as Happy Returns and Returnly.
“For reverse logistics, we have also been leveraging ShipBob’s Returns API to automate and streamline our routine RMA processes. Having ShipBob handle our returns has been a huge help in reducing our daily workload, and the ability to drive this process via API is wonderful.”
Tips for improving your supply chain – from end-to-end
Once you have a better understanding of the major end-to-end supply chain challenges, you can begin to work on solving them. Here are a few tips to help you improve your supply chain from start to finish.
Leverage modern technology solutions for greater visibility
Supply chain technology has come a long way, providing retailers even more visibility than ever before. You can leverage the right technology and integrate it with third-party supplier tools to keep track of every aspect of your supply chain.
Beyond tracking and reporting, today’s lean supply chain technology also leverages algorithms to identify trends, patterns, and gaps throughout your supply chain. This gives you the visibility you need to optimize and streamline your supply chain management.
For example, ShipBob offers real-time access to inventory data, which can tell you when certain SKUs are running out so you can plan your inventory reorders. This can help prevent stockouts and maintain optimal inventory levels amounts across fulfillment centers.
“We talked to another 3PL that looked promising but quickly realized their model is just renting space inside of other fulfillment centers with different warehouse management systems used at each. This provided no visibility into operations or ability to maintain their SLAs.
I’ve been passed around the 3PL world, and I’m glad to put roots down with ShipBob. I can’t stress enough how much easier my life has gotten since. ShipBob feels like a partner. I’ve been passed around the 3PL world, and I’m glad to put roots down with ShipBob.”
Wes Brown, Head of Operations at Black Claw LLC
Automate as much as possible
Logistics automation can save your end-to-end supply chain by making things more efficient and minimizing room for errors.
For example, you can optimize your supply chain by setting automatic reorder notifications, which will ensure that you don’t run out of inventory. A more robust logistics solution, like an ERP inventory system, can even take it a step further by placing the order for you.
You can automate much of your supply chain by utilizing a supply chain as a service provider such as ShipBob. With ShipBob, you can fully automate your fulfillment process so you have more freedom to focus on driving sales.
“I followed the steps outlined and everything was automated, from setting up my store, to sending product, to fulfilling orders. It was pretty remarkable how a 24-year-old like me with very little money and no prior logistics experience could launch a product and have distribution be automated.
I followed the steps, told my manufacturer the requirements to ship inventory to ShipBob, and in a couple days I had 4,000 orders that were ready to ship out.”
Josh Hollings, Founder & CEO of Drop FX
Improve data accuracy for better planning
Strategic planning is crucial for an efficient end-to-end supply chain. To come up with plans that make sense in the long run, you need accurate data insights. Accurate data can help you improve supply chain forecasting and help you plan for the future.
Invest in a supply chain analytics solution that can seamlessly integrate data from multiple internal and external sources to give you the data you need. This is particularly important when you have a decentralized supply chain, where you need access to data from multiple warehouses and fulfillment centers.
Machine learning can help you aggregate data from multiple sources and enhance real-time information to provide accurate predictions about future demand.
This allows you to plan your procurement accordingly, reducing wasted space and resources to store unnecessary inventory. And you can also make sure that you always keep your best sellers in stock for fast fulfillment.
“ShipBob’s analytics tool is really cool. It helps us a lot with planning inventory reorders, seeing when SKUs are going to run out, and we can even set up email notifications so that we’re alerted when a SKU has less than a certain quantity left. There is a lot of value in their technology.”
Oded Harth, CEO & Co-Founder of MDacne
Outsource to supply chain & logistics experts
Managing an ecommerce supply chain can be time-intensive, challenging, and hold you and your team back from growing your business.
If you’re ready to take your brand to the next level, consider outsourcing your supply chain management to a 3PL, so you can delegate time-consuming and complicated tasks involving inventory storage, warehouse management, and fulfillment to the experts.
By partnering with a 3PL, you can spend more of your time on product development, customer service, and marketing.
Outsourcing logistics also enables you to offer faster fulfillment and shipping at an affordable rate. For instance, with ShipBob, you’re given access to a robust infrastructure and leading fulfillment software without the need to invest in your own warehouse and fulfillment operation.
“When I switched to ShipBob, it was game over! I could finally start growing my business. They made the move from my prior 3PL fast and easy, and I saw the benefits of working with them right away.”
Courtney Lee, Prymal
Improve your supply chain visibility with ShipBob
By leveraging advanced technology and years of expertise, ShipBob helps solve one of the most critical challenges involving visibility across the supply chain.
ShipBob’s entire global fulfillment network is powered by the a best-in-class, proprietary warehouse management system (WMS). Our tech-enabled network enables full visibility into fulfillment operations, from receiving new inventory to managing returns. Check out the video below to see ShipBob’s end to end fulfillment operation that’s an important aspect of your supply chain.
ShipBob merchants have access to advanced data and analytics reporting that provides real-time operational insights. From the ShipBob dashboard, you can:
- View, track, and manage inventory across our network in real time.
- Manage SKUs and product bundles.
- Monitor SKU velocity, inventory days on hand, and more.
- Forecast demand by viewing historical trends.
- Filter all orders by status.
- And much more!
ShipBob also allowed us to make changes to bundles on the fly with complete control and visibility, which is important in monthly subscription boxes, holiday bundles, and many more scenarios. With the new fulfillment network, we had to rely on a game of telephone and someone else to do this for us.
When trying to leave the fulfillment network to return back to ShipBob, the fulfillment network had 1,500 units of missing inventory that they couldn’t find.
Because of a lack of ownership of the entire fulfillment stack, it’s been difficult to rectify, unlike with ShipBob who owns the entire stack: inventory and order management system, warehouse management system, and their fulfillment centers.”
Gerard Ecker, Founder & CEO of Ocean & Co.
Gain more visibility and ownership over your supply chain by doing less. Click the button below to request more information and custom pricing from ShipBob.
Find ecommerce operations jobs
ShipBob launched the Ecommerce Operations Job Board to help people find the best jobs and hire top talent for ecommerce operations, supply chain, logistics, fulfillment, and shipping roles. Post a job here, or browse jobs here.
End-to-end supply chain FAQs
Here are answers to the top questions about end-to-end supply chain.
How can a supply chain be improved?
There are many steps involved in improving the supply chain but real-time visibility and automation are some of the essentials. Sometimes, outsourcing supply chain management to the experts (such as a 3PL like ShipBob for fulfillment) is the best option. This way, you can focus your time and attention on initiatives that drive revenue directly.
How do you manage supply chain risk?
Getting real-time visibility across your supply chain and extracting accurate data from multiple sources can help you identify risks and manage them on time. This way, you can track end-to-end supply chain performance across your network, including third-parties, and better prepare for unexpected delays or disruptions.
What are the stages in a supply chain?
The typical supply chain process starts with product procurement. Once inventory is created or purchased, it is then distributed and stored across warehouse locations. Once product is stored, orders are placed online and items are picked and packed from the nearest fulfillment center. From there, packages are shipped through the most cost-effective route possible. Once orders are shipped, order tracking must be shared. Customers should also be able to easily get in touch with customer service to check in on a delivery or initiate a return or exchange.