How inbound logistics impacts the customer experience
January 11, 2017
Creating an outstanding customer experience is a primary focus for retailers competing in today’s omnichannel environment — but it’s easier said than done. To achieve that goal, retailers are looking to create a customer-centric supply chain, one with the capabilities necessary for attracting new customers and fostering customer loyalty, such as order tracking, free returns and fast customer crediting.
With that focus, it can be easy to forget how inbound logistics plays into an outstanding customer experience, largely because many aspects of inbound logistics are hidden from the customer. For instance, even if an online storefront guarantees two-day delivery, there is a lot of work that goes on behind the scenes to enable that tight delivery window.
There are three key aspects of inbound logistics that help retailers deliver a great customer experience. If you look to these fundamentals in the upstream segments of your supply chain, it can pay huge dividends further downstream — at your fulfillment center, brick-and-mortar stores and your customer’s doorstep.
- Product availability
The first, and arguably the most visible part of inbound logistics for customers, is product availability. Thanks to e-commerce, obtaining and maintaining a customer is more challenging than ever for retailers. If a product is not available on your storefront, consumers can quickly turn to other companies, leaving you with the tough task of reacquiring that customer. Oftentimes, retailers are forced to expedite orders from non-optimized locations just to capture an order, rather than face the challenge of reacquisition. Better communication between the supply and demand sides of your organization can help make sure your products are available at the right time from the right location.
- Modal selection
Even further upstream from the customer — but no less important— is modal selection. For supply chain management, this aspect of inbound can be a balancing act between enhancing profitability and ensuring product availability for customers. It can be challenging to work through an ever-changing transportation pricing environment, all while trying to select the most reliable and cost-effective mode of transportation. By working with a third-party logistics provider (3PL), retailers can take advantage of network optimization, cross-docking and freight consolidation to maximize the efficiency and cost-effectiveness of their transportation operations.
- Demand planning
One way to alleviate the pressures of modal selection is through demand planning. A good demand planning process incorporates many different departments across the organization — from sales, marketing and manufacturing to supply chain management and in-store operations. To make informed decisions regarding demand, organizations should also have a warehouse management system (WMS) in place for aggregating data and providing predictive analytics. Adding qualitative data from across the company can then help put your predictive analytics in context – supporting your plan for demand at a very granular level.
Getting visibility for supply chain insights
While it may not be as fancy as customized packaging or as visible as customer service, inbound logistics is still vital for e-commerce fulfillment to run smoothly. Focusing on the fundamentals of inbound logistics can also help deliver a great customer experience with consistency.