Managing the supply and demand gap effectively is a key component of any ecommerce business. It is a continuous challenge due to two main factors: quantity fluctuations and lead time deviations. While a close relationship with your sales and supplier organizations will help smooth out supply and demand fluctuations to some degree, to effectively reduce deviations in pipeline stock and transport lead time you’ll want to partner with an experienced third-party logistics provider (3PL). will effectively It’s a 3PLs number one job to have order accuracy and efficient, cost effective transportation. They excel at meeting demand while keeping the cost low. Plus a 3PL with a modern technology platform will be able to provide complete supply chain visibility for seamless execution to ensure minimum deviations in supply plans and schedules. Overall, by working with an experienced 3PL, your company will have limited setbacks due to a supply and demand gap.
Here are five advanced solutions developed by 3PL providers that can assist in managing your business’ supply and demand more efficiently.
Planning and Execution
Supply and demand planning incorporates product forecasting, transportation planning as well as supply schedules depending on transport lead time, cost, previous sales data, customer behavior, seasonality, and market competition. For efficient forecasting and to gain maximum output, planning should be accurate and align with the actual sales. After efficient planning, execution must also be near perfect for minimum deviations. Poor execution impacts sales and is the biggest reason for delays along the supply chain. A knowledgeable and experienced 3PL will be able to provide these tools in order to help ensure planning and execution that will reduce your supply and demand gap.
“It’s been helpful to have a partner who can handle the warehouse and logistics side of our business for us. I think the team is very knowledgeable. They bring experience fulfilling to different retailers that has made this a very steady area of our supply chain, from launch until now.”
Stock Accuracy
Stock accuracy across the supply chain makes it possible to provide timely and accurate orders to customers. Maintaining stock accuracy across different fulfillment centers for multiple SKUs becomes possible only with the use of best practices and updated technology. Most good 3PL providers already use updated systems and processes to ensure stock accuracy. The stock accuracy is further ensured by doing daily, weekly or monthly cycle counts. Partnering with a 3PL provider with excellent warehousing services will contribute positively to your stock accuracy and greater efficiency in matching supply with demand.
Transportation
Efficient transportation modes are critical to managing your supply. They should remove factors such as limited space availability, restricted time frames, and limited frequency. At the same time, the cost of transportation, such as air freight and sea freight should be optimized to the lowest possible amount. Inefficiently managed transportation blocks product flow and restricts businesses from meeting demand on time. 3PL providers understand the importance of transportation in the supply chain. Whether you need to fulfill the demand as early as possible by using air freight or need to supply products in bulk using trucking or sea freight, they can assist in choosing the appropriate transportation mode for your cargo and manage it effectively for the best experience.
Relationships with Service Providers
In a supply chain, the product passes through many entities that play a role in managing product supply and assist in demand fulfillment. Having a strong relationship with service providers improves the understanding of each step of the supply chain so that they can be executed properly. A 3PL should have a strong relationship with all the service providers including airlines, shipping lines, transporters as well as overseas agents. 3PL providers use their industry connections to manage last-minute hurdles, operational challenges, and can get a faster response, ultimately passing all these benefits directly to your goal of meeting demand on-time and under budget.
Bottom Line
By partnering with a 3PL provider, most ecommerce businesses can drastically reduce the possibility of having stock mismatches, transport lead time deviations, and receive improved visibility of their supply chain. Control over these factors provides the ability to reduce a supply and demand gap, and maximize order fulfillment which ultimately assists in the growth and success of business.
If you are considering partnering with a 3PL we would love to hear from you. Send us a note to connect about how we can help your company grow. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support.
Tags: KPIs & Metrics
