How the Internet is Improving e-Commerce Back-End Operations

For etailers, the Internet is the store, the sales channel, and the interface with customers. But the Internet can also assist in their store operations in many ways unseen by customers, to improve efficiencies and provide better service. Here are some interesting new examples:

  • Web-enabled supply chain management. Neiman Marcus customers expect to see hot new fashions on the store shelves, in the catalogs and at the e-commerce site—but most products come from abroad, from hundreds of different suppliers, requiring lots of paperwork. To help manage their complex supply chain, Neiman installed a new system from TradeBeam Inc. that helps them comply with import regulations requiring products to be classified by country of origin, calculate cross-border duties and process international payment systems like letters of credit. This level of automation allows Neiman to monitor supplier performance, and ensure that products arrive on the shelves before they go out of style.
  • Web-enabled voice-directed warehouse management systems. The “pick and pack” operation in a warehouse that gets the product out the door to the customer is a fertile opportunity for improved efficiency. The grocery wholesaler Mitchell’s provided its warehouse pickers with web-enabled headphones and microphones that interact with the warehouse’s management system. This allows last-minute changes to be handled on the fly, improving accuracy by 50%. Since many grocery products are highly perishable, and Michell’s ships 500,000 cases of dry goods, milk and produce weekly to 250 stores, such improvements benefit the bottom line immediately.
  • Web-hosted transportation management systems. Customer expectations are growing every day. They want their products when they want them, and they want to be able to track shipments in the meantime. Some new solutions based on Internet technology from companies like LeadLogistics and One Network Enterprises are improving logistics productivity by giving ongoing visibility into where products are in the process, dramatically reducing the amount of phoning and faxing that logistics managers needed to do in the old days to find out what was going on with a given shipment.
  • Web-based workforce management. Employee productivity can be better managed using tools that keep track of employee use of time clocks and make the data available to management, helping them meet daily sales and service targets. The best approach includes integrating these tools into legal, payroll, accounting and human resources systems. Papyrus, a multi-channel retailer of greeting cards, has been using RedPrairie’s workforce management software since 2003, tracking the number of deliveries made per hour by its drivers, and identifying weak spots like poor route planning. As a result, they were able to triple deliveries to 30 per hour, up from 10.
  • Outsourced home-based agents for call center overload. The giant floral service 1-800-Flowers was an early adopter using home-based order takers from Alpine Access Inc. who are able to mimic the same real-time access to order management systems and information about inventory levels and product details, using a web-based interface, completely invisible to customers. The lower cost of outsourcing has also allowed the company to afford extra customer-friendly features like live chat and email.
  • Web-based customer service applications. As customer expectations rise, so does the online merchant’s need to improve speed and accuracy in answering questions and solving problems. The Internet can help, especially with email, live chat and self-service tracking of shipments. With the rise of Web 2.0, mutual help sites have also sprung up, where customers answer each others’ questions and share ideas.
  • Web integration technology to connect with suppliers. Ritz Interactive, an etailer of cameras and photo supplies increased its year-end sales by 35% by line-extending into consumer electronics. They were able to bring in a host of entirely new products thanks to agreements with 15 new suppliers that were executed with an integrated on-demand web-based fulfillment system from Vcommerce Corp. Thanks to XML technology, applications work together better, and Ritz could even include some suppliers who drop-shipped the product, avoiding inventory management altogether.

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