Everything you need to know about e-commerce Logistics 

Logistics:– The apparel logistics market is expected to record a CAGR of 6% during the forecast period. Rapid replenishment cycles of the apparel industry are the main factor driving the market’s growth. Apparel supply chains compete vigorously to provide the latest trends and the best customer experience from retailers to manufacturers. Meanwhile, changing consumer expectations and fulfilment models pressure apparel businesses.

Logistics
Logistics

What is Logistics?

Logistics is the process of coordinating and moving people, materials, inventory, and equipment through space efficiently to fulfil your business needs. The importance of logistics in business cannot be understated since it touches on various areas, including operations management, supply chain management, and marketing. This word is originally from “logistics,” which means the science or art of arranging or transporting material goods or troops by land, sea, air, or space. It refers to the supply of food and provisions to military personnel and includes a traffic management study.

Logistics can sometimes be a challenge in the business world, but it doesn’t have to be. This can be simplified by having the correct type of product or service at the Right Place, at the right time, for a specific price, and in good condition.

Logistics management has become an essential skill for managers and executives today, and it is necessary to consider logistics management to succeed in the current economy. Logistics provides the link between the supply chain, manufacturers, and retailers or between a production facility and its customers.

Logistics Components

  • Inbound transportation:- Inbound logistics is a particular kind of logistics used to bring materials and other goods to a company. It involves the receiving, warehousing, and processing of materials delivered or shipped by suppliers or customers. Inbound logistics is a large, ever-growing field that focuses on the supply aspect of the supply-demand equation. It is a complex and multifaceted process that involves hundreds of different companies, individuals, and operations.
  • Outbound transportation:- Outbound logistics refers to the transportation, storage and delivery of goods to customers or other businesses. These services are usually provided by third-party companies and can be either inbound or outbound. Inbound logistics refers to goods being shipped into a business while outbound logistics refers to the transportation, storage and delivery of goods outside a business. It relates to the sales of goods (out of the company) i.e. the outflow of goods from the production line to the end-user.
  • Warehousing: – Many companies use warehouses for a wide range of purposes. They are typically long and rectangular buildings with high ceilings and a lot of space. The warehouses come in different shapes and sizes, which can be used for various purposes. Like warehouses can be used as storage units, they can also be converted into a storage area for home appliances.
  • Material Handling: – Material handling is a process that can be defined as “transportation, protection, storage and control of materials and products throughout manufacturing, warehousing, distribution, and consumption.”
  • Order Fulfilment: – Order fulfilment management has evolved over the years, with many companies now having more than one supply chain that fulfils orders. The key to a successful supply chain is the order fulfilment process. This can involve several steps such as receiving goods, processing orders and delivering goods to customers. In this process, many challenges need to be addressed by organizations, such as inventory management and order routing.
  • Demand planning: – Demand planning is how much a company should produce and sell to meet customer demand. It also includes assessing customer needs, creating strategies, and developing plans to meet targets. Demand planning is a management process that enables organizations to grow and offer their clients personalized service.

Importance of Logistics

Logistics takes the movement of goods from point A to point B. It is an integral part of many economic processes, such as producing and distributing goods. Logistics centres on the movement of goods, but its effects extend much further than just moving products around supply chains.

Logistics is a critical element of business success, and it includes the planning, coordination, and management of inbound transportation and distribution of goods for a company.

Logistics is the process of planning, organizing, and carrying out the movement of materials, or anything else, from one place to another. Logistics can be seen as a set of principles that help reduce wasted time and costs to ensure efficiency throughout all aspects of an organization’s operations.

E-COMMERCE LOGISTICS

The Role of Logistics

Logistics management refers to planning, coordinating, and controlling the movement of goods and services to meet customer demand. A logistics management team is responsible for everything that moves from a raw material source to an end customer through a product manufacturing process.

There are seven pillars of effective logistics:

  • Material sourcing: – Material sourcing involves finding the lowest-cost supplier for a raw material used in manufacturing. Several more essential factors to consider when sourcing materials can impact product quality, delivery, and profitability. Supply chains are complex and challenging to manage at the best of times, but when you consider the myriad of factors that can affect supply, it’s easy to see how important it is to plan.

When sourcing, it’s essential to keep a close eye on what you’re looking for and identify your goals, timelines, and budget. Planning is key to finding the right source for that material.

  • Transportation: Logistics is the backbone of most businesses as it directly impacts their success. Whether using air or land to transport goods, you must choose the best carrier based on cost, speed, and distance. The key is finding an “optimal” option that will give your business what it needs and leave time to focus on other things.

The global shipping process has undergone many changes over the past few years. Today’s shippers need to be up to speed with international customs (tariffs, compliance) and relevant regulations.

  • Order fulfilment: Order fulfilment is how companies collect, record, process, and ship orders to their customers. This complex process allows retailers to reach a wider audience and increase sales through more efficient supply chain operations. Retail fulfilment services provide the entire supply chain management and related services required by a retailer or wholesaler. The primary responsibilities of this type of company are to receive, store, sort, and package merchandise, prepare items for shipping, record customer information, and ship goods to customers.
  • Warehousing: Warehousing is an essential part of the manufacturing process, especially for those companies that need to store large quantities of goods for different purposes. Warehouses are also used for the distribution and marketing of goods. Warehouses can be classified according to the type of materials stored inside and their function.

A warehouse management system is an integrated software solution designed to automate these functions while providing visibility into the inventory of a business and how it’s being managed. Warehousing and distribution is a complex process that requires many different functions to be completed in order to run smoothly.

Example:-

Oracle Warehouse Management System Cloud

Oracle has introduced a WMS solution for businesses of all sizes. This software can streamline workflows, increase efficiency and consequently reduce costs. Furthermore, it provides end-to-end visibility of inventory across different channels and products and reports on the status of all business lines. “The software fits seamlessly into the current workflow and enables companies to improve efficiency and reduce costs without compromising quality.”

SAP Warehouse Management

SAP Extended Warehouse Management is a cloud-based software platform that can be used by businesses of all sizes. It allows for the automation of warehouse and inventory management, planning, sourcing and order fulfilment. The time saved on these processes can be used to focus on higher level tasks such as customer service. This system serves industries including aerospace and defence, consumer products, automotive, retail, high-tech, wholesale and more.

It provides features that support yard management, inbound optimization, shipment notifications, quality management, physical inventory, order optimization, slotting and rearrangement, replenishment, wave management and more.

Infor CloudSuite WMS

Infor CloudSuite WMS is great for medium to large sized businesses. It supports consumers in replacing paper and even provides ways to make work more efficient while building a responsive and engaging sales funnel. Companies can use the information provided by AI-written content to manage rates of service, product velocity and equipment. It also provides customers with timely updates that can help keep them engaged.

Some of their features include inventory management and visibility, 3PL billing, warehouse fulfilment, 3D analysis & task management.

Fishbowl Warehouse

Fishbowl Warehouse, we offer a cloud-based solution for small to medium-sized businesses. This cloud-based solution offers everything from accounting software to mobile apps, and everything in between. A business automation platform is a tool that helps companies fulfill their business needs and grow. This platform has features like order management and purchase tracking which are designed to make it easier for users to manage their warehouses.

  • Demand forecasting: Inventory demand forecasting is a crucial process in logistics. It relies on accurate projections of demand for goods and materials, which helps to reduce capital tied up in warehousing overheads. One of the most critical tasks is forecasting how extended inventory will last before it must be replaced.

Open-to-buy is an inventory management system that works with your retail business. It is a software application that helps people take control of their inventory. Open-to-buy also helps in managing your business finances and allocating your resources effectively.

  • Inventory management: Companies that use inventory management techniques to plan for increased demand in seasonal or trending products can keep profits higher and make inventory turns faster, meaning the ratio of how much is sold to how much is on hand will be greater.

Some companies are starting to use their inventory turns to determine when they should offer discount pricing or other incentives to free up capital that can be reinvested in the company. By noting slowing list depends on other products, a company can determine when the time is right for a promotion.

  • Supply chain management: Supply chain is an essential in Logistics. It facilitates the movement of goods from suppliers to manufacturers, sellers or distributors, and finally, buyers. Without logistics, it would be impossible for manufacturers to receive goods and send them out while keeping their production schedules on track. If a manufacturer’s supply chain breaks down, this could potentially lead to a loss of revenue.

Supply chains are essential to the smooth running of the business. It is a series of business transactions that takes Place between many different companies, and these transactions help companies deliver products on time and at the best price possible. 

What is Logistics Management System?

Logistics management is a supply chain management unit that ensures the clients’ needs are met. It prepares, monitors, and efficiently handles and transmits goods while keeping inventory records. This can be done by using logistics software found in any form, from ERP to e-commerce applications.

As technology advances, so does logistics. The logistics function, including planning, execution, and policy, is mainly performed by the logistics manager or management facility. This shift has created a demand for greater human-machine integration.

  • The Scandit mobile application software

The mobile barcode scanning app, Scandit, is a widely used and widely-respected tool in the supply chain management industry. It augments other inventory management tools by providing two options for barcode scanning: manual mode or automatic mode. Since the software doesn’t have to be perfect or functional, it can easily reach even challenging barcodes. They also work with other networks online, meaning they can share data with ease.

  • The Easy stock mobile application software.

This is a fully optimized inventory system that leverages the power of cloud technology for everyone’s benefit. It allows for controlled deliveries and reduces warehouse spending by streamlining inventory processes.

The use of an app to forecast, plan and budget for resources is becoming more common among logistics managers. This app can help automate procurement and provide a list of other inventory-related apps that work well.

  • The Web fleet Android application

The work fleet app is a mobile application suitable for tracking the day-to-day activities of your workforce. It can track essential data essential for synchronized and verified production. This app makes it easy for logistic professionals to manage their business when they’re on the go. They can access it through web browsing or download an app wherever they are, so they don’t need to waste time looking at some website on a tiny screen.

This solution is designed to help you reduce time spent on daily operations by providing reports, metrics, and detailed information on your workforce. It can also be used to automate tasks.

  • Service Max mobile app

Service Max mobile app is one of the best and top-selling apps in the service management field that every logistic professional should consider using. The team at E-Logistics is always working very hard to make sure that the Logistics Helper app is constantly being improved and optimized for our users. Social Media Management is an app that helps businesses integrate service contracts, management of orders, workforce optimization, and monitoring of social media customers. This app can be customized to suit any business type and is accessible through mobile devices.

  • The Co-pilot Android mobile app

Co-pilot is a mobile app available across platforms that is great for managing your logistics. It offers maps and routing features that allow you to more efficiently manage the process of moving your goods around.

What are logistics operations?

Logistics operations are essential to the supply chain and refer to moving finished goods, starting from the manufacturer and moving to the end-user. This can be done by air, sea, or land. The United States imports more than half of its overall goods from overseas.

As the eCommerce marketplaces became the go-to destination for sellers and consumers, Amazon restructured inbound & outbound logistics to create a better customer experience and improve profitability.

To optimize e-commerce logistics, inventory management, warehousing, and order fulfilment all play an essential role. Unfortunately, larger organizations tend to have their own dedicated logistics team, while smaller businesses (or even individuals) frequently handle the processes independently.

Why are logistics operations so crucial for eCommerce?

E-commerce businesses need a back-end supply chain management system for inventory and order fulfilment, just like any other business. This is a crucial component of having a successful company!

Logistics is a term that describes the process of constantly moving goods. It’s essential to understand how your eCommerce business will handle logistics before you start shipping products and managing warehouses. Today, the most common way to handle logistics is through back-end supply chain management.

4 Key processes of logistics operations that have the potential to improve your supply chain management.

It is a common misconception that the only way to improve logistics operations is through extensive trials and error. There are many ways to streamline your company’s process, some of which you may not even be aware of.

  • Inventory administration processes:- Inventory management software can help you better track inventory levels in real-time. Various technology comes with built-in inventory management tools to help you optimize inventory levels, improve forecasting and reduce cost by avoiding overstocking or understocking your products.
  • Automated order fulfilment:- Automating your order fulfilment process is a great way to save time and do more important tasks like generating sales and marketing. Contacting your customers with automated messages is a great way to create lasting impressions and set yourself apart from the competition.

With several third-party service providers for storage and fulfilment technology, you’ll have an easy time storing and fulfilling your inventory. That means a lot less work for you and more time to focus on the aspects of your business that are important to you.

Orders are automatically filled and shipped from the location closest to the shipping destination, without the need for you to worry about that part of your business. Once finished with delivery, clients are sent their tracking numbers & information, which allows them to easily see where it is & know when they’ll be getting it.

  • Warehouse management systems: – The Warehouse Management System (WMS) is software that was created to reduce inventory levels and human error. This system can make it easy to stay on top of inventory levels, stock counts, and the flow of goods within the warehouse. 

Several prominent enterprise software vendors sell WMS software as standalone products or modules in comprehensive ERP suites. These include IBM, Microsoft, Oracle, SAP, etc.

  • Real-time data and reporting:- It can be hard to improve logistics without access to data on the operations. Various tools provide a free data and analytics reporting tool that is invaluable for uncovering insights into your fulfilment performance, shipping data, future demand forecasting needs, inventory allocation, etc.

Why do companies need logistics services?

Logistics services are becoming more and more critical for companies. They help to reduce costs, save time and increase efficiency. Companies should not be afraid of outsourcing logistics services to third-party providers because they can benefit from it. With the rise of online shopping, companies are faced with more and more logistics needs. Logistics companies have arisen to fulfil these needs, providing transportation, warehousing, inventory control, etc.

What is stakeholder engagement?

Stakeholder engagement is a process by which stakeholders are involved in decision-making and implementing change. Stakeholder engagement can be achieved through different methods such as interviews, surveys, focus groups, etc. These methods must be chosen based on what information needs to be collected.

Different stakeholders involved in the process

  • The shipper (consignor):- The consignor is the sender of a shipment, and the consignor originates the selling. The consignor is often referred to as the seller. Their cargo may be in a container, truck, or plane, depending on where they send their goods. When they send their goods to another place, they are called the consignee.
  • The recipient (consignee):- The recipient of freight is the freight receiver who gets delivered goods from a shipment. As mentioned above, the consignee wants transportation that is low-cost, reliable, and capable of delivery in the shortest time. There are many instances when the for-hire transportation company can temporarily assume the ownership of goods and products until they are finally delivered to the consignee. These situations can arise in various contexts, such as when a package is stolen from package delivery or there is a delay in delivering the goods.
  • Carrier and agents: – A carrier is a company providing air, sea, or land transportation services, while an agent is considered one who acts on behalf of another in dealing with a third party. The shipper and the recipient are responsible for moving the goods, while carriers keep their costs and move the goods. 

Large carriers often rely on pricey high-quality equipment and lots of space to carry larger shipments. However, smaller players can provide great flexibility, customization, and personalized service to meet their shippers’ needs. If you’re looking for a freight carrier, consider your business needs and destination when choosing the best option for your needs. Factors like the type of product or service, number of items shipped, region where the order is being delivered, and much more should also be considered when making this decision.

  • The government: – Governments have expressed a strong interest in transportation and have provided funds, direction, and tools to help keep carriers safe. It is hard to deny that the government is one of the stakeholder’s most important customers. It plays a critical role in their happiness and productivity, which can contribute to the success of their company. That is why companies need to deliver high-quality services.

Transportation plays a role in economic success, and the government works to achieve this. It must be stable and efficient, so the government does what it can. In an environment where transportation professionals are used to being able to take it anywhere, you have to be mindful of the regulations that place restrictions on your business by location.

  • The General public:-The public includes individual consumers and businesses that require transportation to run. Public expectations and needs have affordable rates, access to reliable transportation & competitive security.

People who live in urban areas spend much more per capita on transportation than those in rural areas, which has led to significant demand for public transit in these areas. With the rising cost of fuel, there is also a backlash against cars and other forms of personal vehicles. Public transportation has taken up much of the slack, with many online services.

What is Cross-border logistics?

Cross-border logistics is the process of transporting goods across international borders, and it is an essential part of the supply chain, and it is an area that has seen a lot of growth in recent years. The cross-border logistics industry has overgrown with the advent of e-commerce. To ensure quality and cost-effectiveness, companies need to find a partner that can provide high-quality services and offer competitive rates.

Cross-border logistics involves many different parts, such as freight forwarding, customs clearance, warehousing, transportation, distribution, and more. It is also highly regulated, with compliance requirements being one aspect that needs care. Fees for all these channels are different, but the service provider generally charges a fixed price for each transaction. 

How is cross-border logistics helping e-commerce to grow?

Cross-border logistics is vital to e-commerce, and it helps companies bring products to customers faster & cheaper and make money sustainably. Some of the most popular e-commerce companies that benefit from using cross-border logistics are Amazon, Alibaba, and Walmart. These companies have diverse supply chains that span multiple countries around the world, which allows them to deliver products quickly without incurring high costs or waiting for long periods for shipping.

4 Strategies for Effective Cross-Border Logistics

1. Establish warehouses near borders/Ports/Terminals: – To ship efficiently, there are a lot of factors to consider. Establishing warehouses near borders provides greater flexibility for managing congestion, transit time, and capacity. Whenever border backups result in delays, this can cause production problems and ultimately impact business. Management may even start to consider a change in distribution centre location.

If the warehouse is near the border, it could become easier to participate in cross-border opportunities, even with congestion. Shorter distances mean shorter transportation time, which means just-in-time logistics, enabling companies to have more control over their supply chain and final product.

2. Work with bonded or Certified Transportation Security Administration (C-TPAT) carriers: – Charter carriers don’t pay taxes and aren’t required to clear U.S. customs. This means that products will reach their destinations faster and with less added costs for your business. To meet the demands of a growing market, They have introduced new Multi-Drop Shipments. This means that you will now be able to set your products up for multiple deliveries at once.

It is a good idea to work with carriers who C-TPAT has screened. The inspections are more minor, and they are allowed to use the fast lanes, which saves time and effort.

3. Determine an optimum shipping model based on product: – Depending on the product, transporting may be preferable, or a door-to-door model could work. While one carrier typically transports them to their destination, this process can take some time and creates bottlenecks on both ends.

4. If you utilize a Transportation Management System, you can monitor routes and plan accordingly: – A real-time monitoring system provides visibility and can help identify opportunities to dynamically optimize routes, trailer space utilization, and costs.

With so many solutions coming through, finding a company that can help you seamlessly integrate your answer makes sense. With a service that has been used in different parts of the world, it will be easy to get up to speed. Cross-border logistics can be a challenge for any company, and it is difficult to find the best providers for your cross-border logistics and ensure your goods flow seamlessly around the globe. However, some providers can help you optimize your freight, cross borders faster, and make sure you never miss a shipment again.

What Are Incoterms?

Incoterms are a set of definitions that determine how specific terms should be interpreted in certain countries, like what is FOB and What it means. 

Incoterms define the responsibilities of all parties involved in international shipping. What costs are incurred, and how much risk this transaction will pose for each party. Therefore, it’s imperative that shipping documents clearly state the Incoterms relevant to your supply chain.

How do Incoterms help in International Trade?

The role of incoterms in procurement is vital for international trade, which is why it continues to be widely used. It provides a universal language that solves what could otherwise be a problem – understanding each other.

It reduces inconsistencies in language by standardizing specific terms. With more and more companies relying on international trade to grow their business, the importance of supply chains is growing with it. This has led to an increase in unfair trade practices and a surge in the global demand for supply chain transparency.

Types of Incoterms

There are 11 types of international trade terms, with four of them being applicable for specific modes of transportation and the other seven covering any kind of transport.

So here we go with the latest list of incoterms 2020 series:

Rules for any transport mode

EXW Incoterms

EXW stands for EX Works, meaning that the seller agrees to ship the goods from their warehouse or Place of business and bear all risks and costs associated with them until they are delivered undamaged at the agreed-upon destination. 

An EXW agreement is a type of seller financing agreement. The seller provides all the materials and services necessary to manufacture, package, and ship an item to the buyer. In return, the buyer pays a pre-agreed upon price and promises to pay for the delivery of the product by a specific date.

FCA Incoterms

A free carrier is an arrangement where the seller bears all risk and costs of delivering their products to a specified location. 

CPT Incoterms

Carriage paid to is a little more specific than FCA. The seller bears the cost of transportation to the Place nominated by the buyer and the risk of the transfer of the good only when it reaches the nominated destination. 

FOB Incoterms

“Free On Board” is a common phrase used in international trade, describing the arrangement of goods being shipped. This is usually used when purchasing goods from a seller and using their freight services. As the seller’s responsibility is to deliver the goods at the port of shipment and the risk transfers to the buyer once they are loaded on, this phrase has been used in international trade for decades. This means that a transfer is made from the seller to the buyer once goods are loaded.

In most cases, FOB is used in the international trade of goods. The seller will ship goods to the buyer and then wait for payment. The buyer will bear all risks and costs involved in importing goods into their country, including paying duties, taxes, etc.

CIF Incoterms

CIF is a commercial rule under incoterms 2020, which stands for Cost, Insurance, and Freight. In this standard, the expenses are borne by the seller–from delivering goods and handling settlement charges for carriage and insurance to the designated port. 

However, CIF usually not be used for air flights. They are not generally used in the case of bulk cargo and non-containerized goods, as well as when the seller has direct access to the vessel for loading.

The seller, who is in charge of the goods from the beginning until they are loaded onto a vessel, is responsible for them until goods are delivered at the destination port.

CFR Incoterms

The Cost & Freight terms are used for sea and ocean freight transits. The acronym of CFR stands for Cost & Freight terms, used explicitly for sea and ocean freight transits and, more precisely, bulk and non-containerized cargo. For containerized cargo, one may use the CPT in Place of CFR.

Delivered Duty Paid (DDP)

DDP is an agreement where the seller assumes all risks and responsibilities of the goods until goods are delivered to the buyer’s warehouse or the preferred location. This is a popular option for companies that do not require buyers to pay for transport costs or customs duties.

Most of the expenses tied to shipping are on the seller tab but ensure you check all the terms in this agreement before signing your name to send it off.

  • Delivered duty paid is an agreement whereby the seller assumes all responsibility for transporting goods until they reach an agreed-upon destination.
  • This transaction must be arranged with the seller and their agent. Their company will take care of all transportation, importing, exporting, and customs documentation required for this transaction.
  • DDPs (Delivery Duty Paid) are a beneficial option for buyers as the seller assumes most of the liability and costs for shipping.

DAP (Delivered at Place) Incoterms

Delivery at Place is the standard term for delivering goods to a particular place. If you plan a delivery from your warehouse to a customer’s home, you’ll be using DAP terms.

Dropshipping is important for Logistics.

Challenges inherent to cross-border transportation

Trade deals have increased imports and exports across the globe; however, there are several challenges that cross-border freight companies must sort out, documentation being the main issue. Freighters must accurately describe their cargo’s origin & classification to comply with international laws, and they must be able to provide this information in several languages to market themselves overseas. If the documentation is not completed in a timely manner and can’t pass customs, it will delay your shipments and potentially result in revenue loss. Not only is the revenue lost, but your potential clients will also miss their refunds.

How to choose a cross-border freighter?

Some considerations to keep in mind when choosing a cross-border supplier are:

  • Resources: This implies the capacity to rapidly assume command over the freight to get reserve funds in both time and cash. The best providers contribute to their vehicles and hardware and guarantee their accessibility.
  •  Local Representation: This implies knowing the nations, courses, customs systems, and nearby organizations to ensure fast and proficient arrangements.
  • Multimodal Options: This implies considering multi-purpose options as per area, conveyance terms, volume, recurrence, and having the opportunity to answer unfavourable climate and political circumstances.
  • Experience in cross-border transportation: this implies picking an organization with long stretches of involvement with global delivery, which knows how to manage the intricacies that might emerge.

Conclusion 

E-commerce is a booming industry, and with the advent of technology, it’s becoming easier to run an online store. The future of logistics is bright. With the increasing need for cross-border logistics, companies are looking at digitalization to help them.

Outsourcing logistics is beneficial to the company as it helps better manage the supply chain and better control.

Logistics can affect how a company is perceived in the market and affect its ability to compete. A company’s logistics can affect how the market perceives them and its ability to compete. Having a robust logistics system and reliable deliveries means that the product will reach customers on time. It helps companies provide their products and services to customers efficiently and effectively. The logistics system also helps optimize the workforce by providing them with resources on demand. As the demand for logistics systems increases, the need for transportation increases.  

GlamWork – If you looking for an end-to-end service provider for Design, Sourcing, Sampling and Product Development, please check out  OUR plans at GlamWork.org

HulaGlobal – If you are looking for an apparel supplier, we recommend you check out Hulaglobal.com and connect with their team to talk more about your requirements.

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