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23 (118) 2016
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Innovation

Innovation in logistics: getting ready for e-commerce

by Marta Kunikowska, business development manager, Rhenus Logistics S.A
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In traditional sales channels, the logistics process ends in a shop or warehouse, and is limited to  the efficient management of inventories and deliveries.

The consumer selects the goods, takes them from a shop, and returns them there in case of a complaint. It’s possible to predict the time and the place of execution of the process of purchasing or indeed even product return.

In online sales, the logistics process is extended to the individual customer, and to a high degree it is dependent on the individual customer’s expectations. It’s the customer that makes the decision when to purchase, and when and where the products are to be delivered, and in the case of a return, where they are to be collected from.

Online sales are characterised by dynamism and high degree of unpredictability. E-commerce is not only the sales of goods It’s a promise of fulfilling the customer’s dream of the given product, in specified size, with specific colour, style, etc, and its success depends on the untroubled communication between the store and the logistics operator. The party responsible for the correct preparation of customer's order is the provider of logistics services.

The process of preparation of  an order may be the beginning or the end of success in online sales. An order that is put together incorrectly has a negative effect on the image of the store. The disappointed customer may in future decide to do their shopping with the use of another sales platform. And disappointed customers increases the store costs (handling the returns, benefits lost on account of lack of availability of a given product to other customers, possibility that the product will be damaged during the process of return, negative opinions passed onto others).

Correct preparation starts when the products are delivered to a warehouse. It depends on correct product identification upon entry, and its correct introduction into the warehouse. Another element of success is the warehouse management system created to ensure efficient management of the flow of goods, minimising the human factor in the process of order preparation. Several inspections of the goods at the stages of picking, packing and releasing, limit the possibility of mistakes to the minimum, with the assumption that the goods have been correctly introduced to the warehouse.

Another aspect worth mentioning is the quality of product packing and order personalisation.

The aesthetic packaging of products, selecting a suitably sized carton, placing products in a larger carton in compliance with the packing manual specified by the vendor, adding notes, samples, leaflets, etc. – such activities are becoming standard procedures in handling online stores. Large shopping clubs and well-known online sales networks demonstrate high requirements in that regard. Packing guidelines often change from season to season – this is especially the case in the fashion industry. Attention to aesthetic packaging develops the image of the store and the relationships with clients.

The role of logistics operator is not limited only to properly preparing the orders in terms of their completion. It is also very important to secure the goods against any damage during transportation. The manner of packing the given product groups should be defined by the e-store, and executed by the operator. Even the best and most costly packaging will not guarantee the absence of damage during transportation, but it will minimise the possibility of its occurrence.  

The correctness and quality of packing don’t seem difficult to implement. However, the challenge starts when the volume of online sales begins to increase rapidly, and the logistics resources of an online store no longer allow it to handle the orders efficiently. Future growth suddenly hangs in the balance. At this point, it becomes a good idea to entrust the logistics to a partner with suitable experience and know-how.

 

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