A boost for e-commerce: digitization of warehouse management systems
Updating outdated warehouse management systems and moving to modern logistics solutions is an important decision for many companies. This change must happen now, and if certain measures are taken, it will be successful.
Unreliable delivery services, lost packages, long waiting times: German consumers are all too familiar with these problems. Even if – not least because of the ongoing corona pandemic – online trading is experiencing a boom, many providers are unable to guarantee their customers good service from ordering to delivery.
German companies must therefore take a step forward and rely on modern logistics. This can work when on-premises ERP solutions are replaced by a cloud-based SaaS platform. Modern SaaS applications act as an interface between the areas of e-commerce, logistics and forwarding and keep an eye on every shipment.
Compared to the previous year, e-commerce sales in Germany increased by around 23 percent in 2020 and thus amounted to 72.8 billion euros. Large players such as Amazon, Zalando and Otto as well as successful multi-channel retailers such as Douglas and Ikea are benefiting from the trend. The large companies have enormous purchasing and investment power, which means that they can usually offer a particularly extensive all-round service in-house as well as various delivery and shipping options. Smaller online shops find it difficult to keep up.
So what can small and medium-sized companies do to gain a sustainable foothold in e-commerce? The key to success lies in delivery. Because customers do not differentiate between the dealer and the supplier: if they have had a bad experience with the delivery service, they tend to leave a negative review for the dealer. The following still applies: The online retailer is responsible for the order and delivery and must ensure that the ordered goods arrive at the customer’s premises quickly and undamaged.
Numerous studies also show that the desired delivery options are an important factor in making a purchase. Security, speed and personalization play the most important role. So it is no longer enough for the deliverer to tell the customer when the order will arrive. The customer wants to decide for himself when and how he receives his goods. Should the parcel be delivered by a bicycle courier, by an express service, or would you prefer to be picked up in a storage shop in the neighborhood? Consumers want flexible solutions that fit their financial capabilities and lifestyle.
This shift in expectations increases the pressure on smaller shipping service providers who are often unable to offer a Zalando or Amazon experience. What can companies do to meet customer needs for inexpensive, fast and transparent delivery? One thing is clear: you have to say goodbye to traditional warehouse management systems (WMS).
A WMS is usually a software for warehouse management that regulates all processes from incoming goods and picking to outgoing goods and shipping. It provides an overview of the entire inventory and manages the order fulfillment processes along the supply chain. The problem for many German companies: They work with a single transport company and use local WMS that are difficult to connect with external partners. This makes supply chain collaboration with suppliers and freight forwarders difficult and makes it impossible to bring together the many different building blocks of the supply chain.
In practice this means that there is no connection between the webshop, the warehouse and the transport company. This lack of connectivity of the old systems has a major impact on the overall customer experience, as consumers have fewer choices and at the same time no access to real-time updates on product availability, possible delivery options and expected delivery time.
The cloud-based services are superior to the local WMS solutions: They optimize logistics processes by coordinating the e-commerce shop, storage, picking and shipping and viewing them as a whole. Modern shipping platforms give companies secure access to a large number of forwarding agents, automate orders and the pick-and-pack process, and in some cases offer a dynamic check-out in e-commerce that provides customers with detailed transit information. In this way, customers are offered flexible shipping options during the checkout process, which creates an additional incentive to buy.
The new type of logistics makes it possible to optimize the entire supply chain instead of just its individual parts. It also helps to offer customers a range of delivery options to ultimately ensure customer satisfaction and loyalty. The big players in the market have ensured that customer expectations in terms of speed and quality of delivery have increased significantly.
Smaller providers therefore need a suitable software solution to connect the shop to their warehouse, customer service and finance departments as well as to the freight forwarder’s WMS and in this way to offer their customers a seamless buying experience – this is the only way they can keep up and remain competitive
More on the subject:
5 tips for digital resilience in logistics
Sources of purchase for resellers – special distribution
Sources of Purchasing for Resellers – Value Add Distribution
Sources of purchase for resellers – full-range distributors
Sources of purchase for resellers – TK distributors
Reseller Sources of Purchasing – Broadline Distribution