19.06.2024
How to reduce lead time in e-commerce logistics?
Today's online shoppers expect fast delivery and a known delivery date once the order is placed. Companies have realised that too much lead time can lead to a loss of customers and damage their reputation.
What is Lead Time?
Lead time is the time taken to complete a process from start to finish. Each constituent part of the supply chain has its own lead time, and it is essential to control these deadlines to control your supply. Lead time affects operational workflow, productivity, customer satisfaction, and the company’s turnover. Beyond these lead times, the sales lead time is the time that elapses between the moment the order is placed, on an e-commerce website for example, and the receipt of the order by the customer.
Fast delivery is no longer a differentiating criterion, but a new standard. Estimating the time between an order placed and its delivery will enable you to make the necessary optimisations and be more competitive.
How to reduce your lead time, the key stages
To improve your quality of service and be competitive in terms of sales lead time, there are several improvements to be explored.
1. Real-time connectivity between the online sales platform and the logistics IS
Efficient connectivity via APIs/EDI between the online sales platform (CMS) and logistics management systems (OMS, WMS) is crucial. This integration enables the real-time transfer of customer orders and all the information needed to build up these orders. As a result, e-logisticians can handle orders faster and minimise processing errors.
2. Have stock available for sale
Manage your stock:
Maintaining a proficient level of inventory is a priority for e-commerce companies. It enables them to satisfy customers’ needs instantly, ensuring maximum customer satisfaction without further delay. Managing safety stock helps to avoid product shortages. It also makes it possible to separate sales lead time from production and delivery lead times, which are considered in the calculation.
Anticipate return volumes:
Managing returns is a complex task, particularly during the peak period when sales and returns are higher. The challenge is to get the product back on sale as quickly as possible.
To anticipate returned volumes and optimise their processing, make sure you:
• Analyse the average volume of returns on your products and calculate returns forecasts,
• Define an effective returns management process adapted to the different types of product,
• Define a clear checklist for quick restocking.
Reduce your return rate:
Before placing an order, paying close attention to customer comments and providing as much information as possible about the product will help to reduce the returns rate. While improving the shopping experience, you’ll also reduce your costs and improve your inventory management.
3. Optimise order preparation
During peak periods, every minute counts to ensure fast delivery, without jeopardising the proper compliance of orders, which could lead to a wave of returns. Optimising the preparation of your orders will therefore be an essential key to success in reducing your lead time. There are several ways of doing this:
• Optimise stock layout to make fast-moving products more accessible, using the ABC method (the ABC method consists of classifying products according to their sales),
• Launch order preparation in waves to increase productivity,
• Optimise packing time by simplifying the process and using easy-to-use and quick-to-close packaging (e.g., self-bottoming cartons)
4. Optimise transportation
Choose your geographical positioning:
Positioning your operations according to the geographical location of your customers will reduce access time to the area and improve delivery times.
Optimise your delivery to the carrier:
Better geographical positioning and choice of carrier will enable you to postpone the time of handover to the carrier, allowing you to extend your daily preparation time.
Opt for express delivery options:
Depending on the average basket value and the period, offering fast delivery will guarantee you an optimal shopping experience for your customers, especially for last-minute purchases during the holiday season. This way, you can build customer loyalty and stand out from the competition.
Let us recap...
How to reduce lead time in e-commerce Logistics?
Reducing lead time in e-commerce Logistics involves a combination of strategic actions. It begins with seamless connectivity between the e-commerce platform and logistics management systems, efficient inventory management, optimised order preparation, and a judicious selection of transport options.
These metrics are key to delivering faster delivery that meets customers’ expectations for speed, builds loyalty through good customer satisfaction, and sets you apart from the competition, attracting more customers. In addition, they promote more agile demand management.
In summary, reducing lead time in e-commerce Logistics is essential to meet customer expectations for fast delivery.
Collaborate with a 3PL!
If you are looking to reduce your lead time in e-commerce Logistics, consider working with a 3PL. E-commerce Logistics refers to all the steps involved in delivering a product sold on the internet via a marketplace or an e-commerce website. It encompasses the planning, coordination, and execution of activities such as inventory management, order picking, shipping, delivery, and returns of products sold online. At GEODIS, we understand the challenge of meeting your customers’ expectations for fast delivery.
Our native connection to major CMSs enables real-time, effortless order communication. Our OMS will direct orders to the most appropriate warehouse in our network to fulfil your order. It also allows us to manage kits and bundles that would be part of your recurrent or promotional offer. Our integrations with various transport solutions offer gives you the opportunity to provide your customers with complete tracking & tracing of the order, tracing every stage from the time the order is placed on your website right through to delivery.
Our expertise in processes and inventory management will ensure that you always have the optimum stock available and can manage returns quickly according to criteria defined together. By working with us, you benefit from customised solutions tailored to your specific needs, effectively reducing order processing times. We are here to help you maintain a seamless customer experience while strengthening your competitiveness in e-commerce.
