Logistics and Operations are the backbones of your e-commerce business.
You learn about the six key processes of Order Management that include inventory management and counting, racking, system, order management, logistics process, and managing returns.
You can use tools such as Unicommerce and EasyEcom for inventory and order management.
Let’s learn about the backbone of your e-commerce business:
If there is a gap in this part of your business or if you cannot optimise its workings, you will be unable to make your business into a profitable venture. Operational stability is key to running any business. It is the Operations Department that executes all the promises that the Sales and Marketing teams make to their customers.
Key Note #1: Operations Management Processes
The following are the key processes of Operations Management:
- Inventory Management: In Operations, this is the most important process and consists of several sub-processes:
New Stock Update: When you bring in new stock, you have to keep counting what has come in at the SKU level or Stock Keeping Unit. We will understand SKU deeply at the third level of this course. Let us return to the counting process. The SKU is a process to identify each product that is being sold.
- Inventory Counting: You have to keep a count of your goods; in case a product is damaged, you have to delete it from your available inventory. A damaged product should never be shipped to a customer.
If you don’t have a product, update the stock in your digital shop immediately. If a customer places an order for the product and it is not available, your customer will be upset and this will spoil your relations with him or her.
You need the product as well as packaging material in your inventory stock. How will you pack your product if you don’t have packaging material?
- Racking System: Store your products in your warehouse in order so that you can find it immediately when a customer orders it. For example, if you take 10 minutes to find each product, and suppose you receive 100 orders a day, how will you manage to ship out the required number to your customers? You will never be able to deliver on time.
The Racking System is used so that you can store your goods in an orderly manner so that you can locate products in the least possible time.
Amazon uses the Racking System – and that is the reason why they can send you products so quickly from their warehouse. Whether your warehouse is located in a big space or a small room, racking is an important process that is necessary for your future growth.
- Order Management: The first step is Order Processing. Process an order, step by step. Once you receive an order, get the item from your warehouse, pack it so that it is ready for the courier company to pick up.
Here is the second, more optimal method. First, make a list of all your orders. Then, obtain the goods from the warehouse in one trip. Now, they are all ready to be packed and to be picked up by the courier company. This saves you your valuable time and you can process more orders in one go.
- Logistics Process: Your orders are ready and are packed. You can now take the help of any courier company. They will give you a panel and you can track your goods through this. This tracking number is automatically notified to the customer as well.
You have already seen two examples of automated platforms who give you this service:
- Order Returns: This is the process you should follow if an order is returned by the customer.
Accounting – Return Entry: Make a return entry in your books. Then cancel the invoice as you have to adjust the GST.
Product Verification: If the product is undamaged, add it back to your inventory so that it can be sold again. You may have to repair it a little if something is damaged. These steps help you to keep your costing under control and save your losses.
Electronic products have the maximum returns, and often only because the customer cannot understand one feature in it. Suppose the customer cannot install a battery into the product, he might get confused and return it.
The customer might return it labeling it as Damaged. When you receive the product, you add it to the Defective Product category. Instead, examine the product carefully to see if there is anything wrong with it.
If there is nothing wrong, the product can go back into the Saleable Inventory and control your losses.
Key Note #2: Tools to Manage Inventory and Orders
For Inventory Management and Order Management, you can use certain tools:
These tools help you to save time as well as manage your orders and inventory at the same time.
Therefore, to run a successful e-commerce business, do the following:
Understand Operations Processes thoroughly so that there is no gap between the processes.
Manage your Racking System
Execute all orders at the same time
The above will ensure that you save both time and money.