The Cookbook for Success in Order Fulfillment Using ERP

By CIOReview | Friday, March 23, 2018

201

338

There has been a continuous growth among retail distributors to expand direct-to-consumer shipping model. With more than 50 percent of Gen-X-ers and 70 percent of millennials preferring online shopping, e-commerce has continued to grow 23 percent year-over-year.

Managing thousands of small parcel shipments a day requires maximum efficiency, accuracy, and speed—of both data and product—throughout the entire supply chain. As the shift toward direct-to-consumer occurs, distributors will need to overcome some of the more prevalent challenges posed by the model. ERP software continues to play a pivotal role in how effective a drop shipping program can be.

Here are a few challenges that are faced by retail distributors in using the direct-to-consumer model:

• More than 60 percent of customers are ready to pay for the accommodation of same-day delivery, which can make it profitable for distributors. But, one stumble during the process could cost high retailer chargebacks dissolving your margin.

• Although a smooth process as seen by customers, the model is a warehouse logistics barrier for a lot of distributors. The high order volume with small pick quantity makes it expensive for distributors.

• Staying up-to-date with compliance is another challenge for distributors taking on drop shipping.

If you are facing any of these challenges, it’s time to analyze your ERP system and determine if a new technology is to be deployed to keep up with the severity in e-commerce direct-to-consumer models.

It’s crucial to have an ERP technology that can integrate with EDI and your WMS, under the same roof. Additionally, in order to fulfill orders within time, a comprehensive integration is key; this results in low warehouse costs, and the prevention of retailer chargebacks. Eventually, the dropship model is bound to continue evolving, and it’s time you ensure to have the required tools to meet the demands.