Click here to read our blog post to learn what supply chain management and basic supply chain management processes from order management to transportation.

Everything About Supply Chain Management

Everything About Supply Chain Management | OPLOG

All logistics activities, from the supply of raw materials to delivering that product to the consumer to manufacture a product, are called the supply chain. These logistics activities involve people, technologies, and resources.

From the start of production to delivery, supply chain management is a system that oversees the flow of commodities, data, and finances associated with a product or service to its final destination. Today's digital-based supply chain management systems include material handling and software capabilities for product or service development, order fulfillment, and information dissemination trackings, such as suppliers, manufacturers, wholesalers, shipping and logistics providers, and retailers.
Supply chain management can also be used in global trade activities such as managing international suppliers and multinational manufacturing processes.

Basic Supply Chain Management Processes 

Order management: It means organizing business activities so that orders can be carried out correctly, on time, and without damage. It is the first stage of the chain and is very important.

Production planning: Production planning is a step in which the supply chain looks at the orders and demands of the customers, and future orders are foreseen. To this end, production processes are planned.

Purchasing: It refers to the procurement of goods and services to be used in production. The important thing at this stage is that all products and services can be purchased quickly, smoothly, and with high quality.

Production: It transforms raw materials purchased for use in production into a product without any problems within the specified time.

Stock management: It means regularly checking the stock level determined for the products. It has a critical role in supply chain management processes.

Warehouse management: It is the stage where the products are stored and ready to be transported, and their quantities and costs are determined.

Transportation: It is the transportation of the products from the warehouse to the consumer or the seller. It is the last stage of the supply chain.

Why Is Supply Chain Management Important? 

If you do not plan correctly, your supply chain management will fail. Failure to manage the product supply process will cause the stocks of the products you sell on your eCommerce site not to be renewed. The inability to calculate and optimize shipping and shipping costs will result in extra costs and lower your profit margin; If you do not manage your warehouse well, your products can take up too much space in your warehouse, which may cause additional costs. However, not planning how the products will leave the warehouse may cause the products to become obsolete in your warehouse and decrease their value. For these reasons, supply chain management in eCommerce stands out as one of the most critical issues.

The importance of the supply chain can vary from company to company, but it is one of the crucial points for all companies, whether small or medium. For this reason, chain management with the right tools and in a healthy way enables the company to grow and increase its profit rate.

Timely and undamaged deliveries increase customer satisfaction and continuity.

The planned execution of supply chain management effectively reduces operating costs and saves money.

It increases the use of resources correctly and effectively, thus increasing efficiency.

It ensures that the production of the enterprise continues without interruption.

It quickly responds to possible demands and prevents loss in unforeseen situations.

It enables us to be prepared for sudden changes in the market.

It contributes to the faster realization of the procurement process.

1) Sharing Information
For supply chain management to be successful, businesses in this chain must trust each other. To gain this trust, it is essential to share the correct information. Companies that can ensure that the information flow is fast can respond quickly to changes in the market and customer needs and strengthen supply chain coordination.


2) Understanding Members' Performance Expectations
As the supply chain becomes more complex, balancing members' needs and maintaining mutual trust can become more complex. At this stage, it is necessary to fully understand the performance expectations of all members of the supply chain.


3) Minimizing Cost
In a constantly developing and changing competitive environment, companies should minimize their supply chain and distribution costs to expand their market shares. For this, it is necessary to examine and develop management techniques. Companies that attach importance to customer satisfaction with minimum price and can make a profit will take a better path in their financial processes.


4) Analyzing and Planning
It is essential for companies that will prefer to use supply chain management to analyze their current situation. A correct management plan should be made per the results they will achieve. Changes to the supply chain should cover all members of that chain. Businesses that cannot plan their supply chains well by their analysis may face the danger of extinction in today's competitive conditions.


5) Turning to eCommerce
eCommerce is a crucial business approach that constantly develops and contains information and communication technologies related to production and distribution. eCommerce solutions should be used to ensure information sharing between commercial partners. It will be essential to transfer all processes to an electronic environment to create transparency in information sharing. Customers can place their orders on eCommerce sites, track them, and see their payment status will contribute to the trust environment that needs to be created. In addition, supplier companies will be able to follow all processes on the website.



Discover how OPLOG's integrated solutions can help optimize your order management, production planning, stock management, transportation, and more. Contact us to unlock the advantages of efficient supply chain management and enhance your business operations for increased customer satisfaction and growth.

Explore how to optimize inventory management through cycle counting; this blog covers its significance, methods, and benefits for effective business operations.

Inventory Cycle Counting Everything You Should Know

Maintaining an efficient inventory management system is essential for any successful business. It is crucial to ensure that your inventory records match your physical stock. Inventory cycle count is a process that helps achieve this goal. 

Doing a complete physical count of your inventory once a year can be time-consuming, disruptive, and prone to errors. Many businesses use inventory cycle count as an alternative inventory management method.

Inventory cycle counting is like a fitness routine: you have to do it regularly to keep your inventory healthy and avoid costly problems.

This comprehensive blog post will explore the world of inventory cycle counting, its significance, methods, benefits, and how to implement it effectively.

Inventory cycle counting is a highly organized process that entails regularly counting a portion of your inventory items instead of doing a total physical count once a year.  

Cycle counting guarantees regular precision in inventory records without causing significant interruptions. This helps to continuously recognize and correct any differences between recorded quantities and actual stock levels.

There are different methods of inventory cycle counting. Some of the standard methods are: 

This method divides the inventory items into three categories based on their value and frequency of sales: A (high value, high frequency), B (medium value, medium frequency), and C (low value, low frequency). The items in Category A are counted more often than those in Category B, which is more than those in Category C.

This method randomly selects a specific number or percentage of the inventory items to count each time. This way, every item has an equal chance of being counted over time.

This method focuses on the inventory items with the highest value or impact on the business. These items are counted more frequently than the rest of the inventory.

This method ensures inventory accuracy for essential items by counting the ones used the most in production or sales. It prioritizes items that are crucial to the business.

This method counts a small group of items repeatedly in a short period to reveal any errors in the counting technique or system. This way, the counting process can be improved and standardized.

One approach to cycle counting involves tracking specific events in the inventory management process, such as when an item is ordered or put away. These events can trigger exception-based cycle counts, such as when stock levels fall below a predetermined threshold or when short-picks occur. For example, when an item is moved, received, or shipped, it can be counted as an opportunity.

This method counts the items based on their location or warehouse area. For example, one shelf, bin, or aisle can be counted as a unit.

This combines two or more of the above methods to create a customized cycle counting plan that suits the business needs and goals. 

The best method for your business may depend on factors such as inventory turnover rate, seasonality, availability of resources, and accuracy goals.  

Depending on the inventory's type, size, and complexity, these methods have advantages and disadvantages. The frequency of tracking your inventory cycle count also matters.  

Periodic vs. Perpetual Inventory Practices

No matter which inventory tracking method a company uses - periodic or perpetual - conducting regular cycle counting is crucial for effectively managing inventory counts. 

A periodic inventory system only updates inventory records at the end of an accounting period, like a month, quarter, or year. In contrast, a perpetual inventory system updates inventory records constantly with every purchase or sale of goods. 

The advantages of periodic inventory practices are that they are simple, inexpensive, and do not require sophisticated technology. However, the disadvantage is that it needs to provide timely and accurate information about the inventory levels and the cost of goods sold (COGS). Periodic inventory also requires a physical count of the inventory at the end of each period, which can be time-consuming, disruptive, and prone to errors. 

The advantages of perpetual inventory practices are that they provide real-time and accurate information about the inventory levels and the COGS. A perpetual inventory also reduces the need for a physical inventory count, as it tracks every movement of goods in and out of the warehouse. However, the main disadvantages are that it is complex, expensive, and requires sophisticated technology. Perpetual inventory practices also require more record-keeping and reconciliation to ensure the inventory records match the physical inventory. 

You should consider many factors when deciding whether to use a periodic or perpetual inventory system. These include the type, size, and complexity of the inventory, as well as the frequency and volume of sales and purchases. Other important considerations include the availability of resources and technology, as well as the accuracy goals of the business. 

A periodic inventory practice is typically more appropriate for small businesses with simple inventories or low sales volumes. Conversely, large businesses with complex inventories, high sales volumes, or multiple retail locations may benefit more from a perpetual inventory system. 

Inventory cycle counting is essential for several reasons:

Regularly counting your inventory can help you keep optimal stock levels and prevent stockouts or overstocking. This practice also allows you to identify discrepancies or problems with your inventory system, such as theft, damage, or misplacement. Once you detect these issues, you can take corrective actions to adjust your stock levels and prevent any loss or customer dissatisfaction.

By maintaining accurate inventory records, you can enhance customer service and satisfaction by providing the right products at the right time. This enables you to fulfill customer orders quickly and efficiently while avoiding any delays or errors that may arise due to incorrect inventory data.

Full physical counts can be expensive and risky due to the need for a lot of labor, time, and resources. Additionally, these counts can disrupt normal business operations and result in inaccuracies due to human error. By spreading the counting process over time and minimizing disruption and error, inventory cycle count can help you avoid these problems.

Let’s get into how to develop and execute a cycle counting program that suits your business needs and goals.

Before you start counting your inventory, you need to plan and design your cycle counting program. This involves deciding on the following factors:

The number of distinct items or stock-keeping units (SKUs) in your inventory determines the complexity and time required for the cycle-counting process. Prioritizing or categorizing SKUs by their value, frequency, or importance is necessary to streamline the process.

When planning cycle counting, it's crucial to consider human and technological resources. This includes considering the number and expertise of your staff, the availability and capacity of equipment, and the functionality and compatibility of software. Depending on the size and complexity of your inventory, you may need to allocate or invest in additional resources to ensure an effective cycle counting process.

This is how often you will perform your cycle counts. The frequency depends on your inventory turnover rate, seasonality, and accuracy goals. Depending on their value, frequency, or importance, you may need to count some items more often than others.

After selecting your preferred cycle counting method and frequency, it's essential to establish an inventory cycle count policy. This policy should outline the roles and responsibilities of your staff, the procedures and standards for cycle counting, and the performance indicators and targets for cycle counting. Your inventory cycle count policy should include the following:

Designate a staff team to ensure accurate cycle counting. Each member should have clear roles and duties, such as selecting items to count, performing counts, recording and reconciling counts, investigating and correcting discrepancies, monitoring and evaluating results, and reporting and communicating findings. By defining these responsibilities, you can ensure a smooth and efficient process.

You need to establish a set of procedures and standards for cycle counting that ensure consistency and accuracy. Provide clear instructions and guidelines for each step of the cycle counting process, such as how to select the items to count, how to use the equipment and software for counting, how to verify and validate the counts, how to handle any exceptions or issues during counting, how to update and maintain the inventory records after counting, etc.

You need to define a set of performance indicators and targets for cycle counting that measure your progress and success. Set realistic and achievable goals for your cycle counting program based on your inventory characteristics and business objectives. Some of the common performance indicators are inventory accuracy, inventory variance, inventory adjustment, cycle count frequency, and cycle count coverage.

Once you have created your cycle counting program and policy, it's time to begin implementing the cycle counting process. This process involves four key steps:

Select the items you will count for each cycle based on your cycle counting method and frequency. You can use a software tool or a manual list to generate and assign the items to your staff. You should also consider the availability and location of the items when selecting them. 

In this article, learn to leverage data, turning insights into action for effective seasonal demand planning and efficient response to market changes.

Harnessing the Power of Data in Seasonal Demand Planning

Seasonal demand comes with perks, challenges, and uncertainties for most businesses. However, there are ways to eliminate uncertainties from the mix. 

You see, seasonal demand planning is like predicting the weather: you never know what will happen, but you have to be prepared for anything. 

Seasonal fluctuations can significantly impact your business performance and overall customer satisfaction, whether it’s a heat wave, a snowstorm, or a pandemic.  

To ensure that your business is on top of every seasonal change in demand, you need to harness the power of data to plan and optimize your inventory, pricing, marketing, and operations.  

For businesses whose decisions are purely based on data, there are no guesses, just informed decisions backed by insights.  

In this blog post, we will show you how data can help you anticipate and respond to seasonal demand changes and how you can use tools to create data-driven forecasts and scenarios.  

By the end of this post, you will be able to turn data into insights and insights into action and make your seasonal demand planning more efficient and effective. 

Here’s a quick overview of what we will be discussing 

Working with Data for Seasonal Demand Planning  

Data isn't just a four-letter word in the eCommerce and supply chain universe; it's the secret sauce behind growth and increased return on investment.  

It's the wizard behind the online shopping curtain, the crystal ball predicting your next production/purchase, and the hero in the story of accurate and effective sales.  

With data, you are able to make smarter, more informed, and insight-driven decisions than Sherlock Holmes. Literally! 

Despite 91% of companies stating that data-driven decision-making is essential for business growth, only 57% make data-based decisions, according to a Bi Survey. Are you with the 57%? 

Did you know?

Stitch Fix is an example of a brand that uses high-level data to make decisions. Stitch Fix is a personal styling service that uses data to match customers with clothes they will love. 

When customers sign up for Stitch Fix, they complete a detailed style profile that includes their size, preferences, and budget. The brand then uses this data to select a box of five clothing items to send to the customer, who tries on the clothes at home, keeping what they like and returning the rest. 

Stitch Fix collects data on everything, from what items customers keep to what they return. This data is used to improve the company's algorithms and to make better recommendations for customers in the future. 

For example, if a customer returns all of the dresses in a box, Stitch Fix will take that as a sign that the customer is not interested in dresses. In the future, Stitch Fix will be less likely to send dresses to that customer. 

According to a McKinsey report, data-driven organizations are 23 times more likely to acquire customers, six times as likely to retain customers, and 19 times as likely to be profitable. Another study by Harvard Business Review found that data-driven businesses are 5% more productive and 6% more profitable than businesses that are not data-driven. 

If you intend to take the lead and sustain it over competitors, you must maintain the importance of data in the never-ending race of customer acquisition and business growth. 

Data can help your brand gain an advantage over competitors in several ways.  

Analyzing this data lets you gain profound insights into customers' preferences, needs, and pain points. Understanding your customers on this level allows you to tailor your product offerings, marketing strategies, and user experience to meet their expectations better. 

Data is at the core of personalized shopping experiences. Effective personalization relies on Machine Learning algorithms that analyze customer data and deliver tailored product recommendations, content, and marketing messages. When customers feel that your brand understands their preferences, they are more likely to engage and make purchases, increasing sales and customer loyalty. 

Accurate data on inventory levels and trends are essential for avoiding overstocking or understocking products during demand season. By integrating inventory management systems with sales data and demand forecasts, you can ensure having the right amount of stock on hand. This prevents lost sales due to stockouts and reduces carrying costs for excess inventory. More on this later. 

Dynamic pricing relies on data. You can adjust prices based on demand, competitor pricing, and the customer's browsing and purchasing history. Data analysis helps you set optimal prices to maximize sales and profitability. 

Digital advertising and marketing campaigns generate vast amounts of data, from click-through rates to conversion statistics.  

This data can help you measure the effectiveness of campaigns, identify which marketing channels are most profitable, and refine strategies accordingly. Data-driven marketing enables budget allocation wisely, focusing on campaigns that yield the best results. 

Seasonal demand patterns are usually predictable and often influenced by external factors, such as weather conditions or holiday periods. 

Brands are often impacted by seasonal demand – those that can anticipate fluctuations in consumer demand are better equipped to take advantage of trends, manage inventory levels, and create optimized marketing campaigns.  

Accurate demand planning can also improve customer satisfaction by making the right products available at the right time. 

Let's explore the data you need for a near-fail-proof seasonal demand plan. 

One of the most crucial aspects of accurately predicting seasonal patterns is using historical and past sales data.  

Analyzing this data helps you forecast seasonal demand, particularly during significant events like the holiday season.  

By examining historical sales data, you can identify patterns and trends that can help predict future demand. This data can also be used to determine any spikes or dips in sales that vary from the usual or average level of sales and correlate them with the seasons or events that may have caused them.  

By analyzing your sales data, you can gain valuable insights into your customer's purchasing behavior, which can help you make informed production or purchasing decisions that optimize your supply chain processes accordingly. 

Seasonal Index in demand season planning helps you to measure and adjust the demand for products or services that vary according to the time of year or season.  

With the Seasonal index, you can remove the seasonal fluctuations in data and analyze the underlying trends and patterns. 

To use a seasonal index, you have to calculate the ratio of the actual demand for a product during a specific season or period to the average demand for the same product over a longer time frame, like a year. 

Your answer indicates how much the demand in that season or period changes from the average level of demand.  

For example, if the average demand for clothing is 2,000 units per month, and the actual demand for the same clothing in December is 5,000 units, then the Seasonal Index for December is 5000/2000 = 2.5. This means the order in December is 150% higher than the average demand. 

You can use the seasonal Index to plan for future demand by multiplying the Seasonal Index for a given period by the expected average demand for that product.  

Suppose you sell Selfie Sticks, and the expected average demand for 2023 is 3,000 monthly units, and the Seasonal Index for December is 2.5. In that case, the forecasted demand for Selfie Sticks in December 2023 is 3,000 x 2.5 = 7,500 units.  

This means you should prepare to meet a higher demand in December than in other months. 

Artificial intelligence (AI) and Machine Learning (ML) 

Planning for seasonal demand can be time-consuming and tricky when done manually. Additionally, the potential of having a less precise forecast is higher when done by humans than those created using automated learning algorithms. This isn’t far-fetched, as computers are more efficient in calculations.  

AI and Machine Learning (ML) revolutionize seasonal demand planning, as these technologies can identify seasonality patterns that may be difficult for humans to detect by processing vast amounts of historical data. 

Many Artificial Intelligence (AI) and Machine Learning (ML) tools can be used for seasonal demand planning. Some of the common examples are Microsoft Power BI and Azure Machine Learning. 

You can use forecasting models to predict the future level of sales for products during each season.  

To develop a plan for seasonal demand, you can use forecasting models such as trend analysis, regression analysis, exponential smoothing, moving average, or time series analysis. These models use mathematical formulas and algorithms to predict future sales levels based on past data and other relevant variables. 

Suppose you are in the business of selling perfumes. Trend analysis data can help you predict future sales levels during a particular season, allowing you to project sales for your fragrances. 

Working with an advanced Warehouse Management System (WMS) can track your inventory analytics, helping you determine the optimal inventory levels for each product, location, and distribution channel. 

Inventory Analytics determines the optimal inventory levels for each product or service during each season based on factors such as the demand forecast, the lead time, the replenishment frequency, the safety stock, and the service level.  

You reduce inventory costs, improve your service levels, and increase profitability using various methods and techniques, such as inventory optimization, which balances the trade-off between stock availability and stock holding costs, ensuring you avoid overstocking or understocking. 

Also closely related to Inventory analytics are Supplier performance analysis and SKU rationalization. 

Analyzing supplier data helps you evaluate their performances, such as tracking delivery times, assessing quality control metrics, and identifying cost savings and process improvement opportunities.  

With this data, you can optimize supplier relationships and enhance overall supply chain efficiency. 

SKU rationalization data provides insights into product performance, profitability, and customer preferences. This helps you make informed decisions regarding SKU distribution, product discontinuation, and portfolio management. 

Your Path to Effortless Inventory Management with OPLOG One 

Don’t let inventory management challenges hold your business back. Implementing the right solution paves the way to not only optimize your stock levels but also enhance overall operational efficiency. With OPLOG One, manage all your stock seamlessly from a single platform, ensuring real-time tracking across different sales channels and warehouses. Unlock the power of integrated inventory analytics, SKU rationalization, and supplier performance analysis in one centralized system, enabling you to make data-driven decisions swiftly and efficiently. Ready to revolutionize your inventory management and take a step towards amplified profitability? Discover the capabilities of OPLOG One and elevate your stock management strategy to the next level. Learn More about OPLOG One → 

One example of a fashion brand that uses high-level data to make decisions is H&M. The brand uses artificial intelligence and big data to enhance its supply chain, help determine merchandise for individual stores, and offer a personalized customer experience. H&M uses data to make decisions in supply chain optimization, merchandise assortment, and customer personalization. 

In the supply chain and fulfillment industry, seasonal demand planning is an ongoing challenge that can make or break your brand. Leveraging the power of data is no longer a luxury but a necessity. Ultimately, data-driven seasonal demand planning is the key to ensuring your business survives and thrives during even the most challenging seasons. 

In this article, explore challenges of organizational growth in fulfillment, learn best practices, and get tips for the right partner choice.

Scaling Smart: Fulfillment Operations Growth

Fulfillment is a crucial part of the supply chain process that should never be compromised, as it plays a vital role in ensuring customer satisfaction, retention, and loyalty by delivering on the promises made by your business. 

Like the conductor of an orchestra, effective fulfillment operations harmonize various components, from inventory management to order processing and logistics, ensuring that products transition from storage shelves to the hands of eager consumers accurately and on schedule.  

It's crucial to realize the significance of the fulfillment process. According to a report by OnTrac, 98% of consumers believe that shipping directly impacts brand loyalty. Also, a study by Shipstation revealed that as many as 84% of consumers are unlikely to purchase from a retailer after going through a single negative shipping experience.  

So, while your brand is successfully scaling operations, you need to pay close attention to fulfillment operations, optimizing the process efficiency and quality. 

How can you scale your fulfillment operations smartly and strategically to meet the increasing demands of your customers and the market? 

We will explore some of the common challenges of organizational growth for fulfillment operations, some of the best practices for overcoming them, and some tips for choosing the right fulfillment partner for your business. 

What is an effective fulfillment operation? 

Effective supply chain fulfillment operations can be likened to your favorite restaurant, ensuring a seamless dining experience. 

The restaurant's inventory management mirrors a well-stocked warehouse, ensuring ingredients are readily available to fulfill customer orders without shortages. This requires careful tracking of inventory levels and proactive replenishment to avoid disruptions. 

Order processing mirrors the accuracy and efficiency of a fulfillment center. Waiters accurately capture your orders, relaying them to the kitchen as a fulfillment center receives and processes customer orders promptly and without errors. 

The kitchen staff represents the heart of order fulfillment, akin to warehouse operations. As warehouse workers pick and pack orders efficiently, the kitchen staff prepares dishes precisely, ensuring quality and timely delivery. 

Order delivery mirrors the final stage of fulfillment, where waiters ensure your orders reach you, just as delivery personnel ensure packages reach their intended recipients. Any additional requests or concerns are addressed promptly, prioritizing customer satisfaction. 

 
A restaurant's operation mirrors effective fulfillment, emphasizing accuracy, speed, and customer satisfaction. Just as a restaurant strives for a seamless dining experience, effective fulfillment operations deliver a smooth and satisfying customer journey. 

Challenges of organizational growth for fulfillment operations 

Organizational growth can bring many benefits to your business, such as increased revenue, market share, and brand awareness. However, it can also pose many challenges to your fulfillment operations, such as managing larger inventories, optimizing supply chain management, dealing with more complex logistics, and ensuring timely delivery of products to customers.  

As your brand gains more exposure and popularity among customers, it becomes increasingly important to review and refine your fulfillment strategy to ensure that it can handle your operations' increased demand and complexity. 

Some challenges you are likely to experience are: 

Being understaffed: An increase in your order volume will translate to needing more staff to handle the fulfillment tasks. However, hiring and training new staff can take time and effort. Moreover, you may need help with employee turnover, absenteeism, and burnout. 

Diverse customer needs: A scaling business means more customers, and more customers come with varied and complex needs, such as faster delivery times, customized packaging, personalized messages, and international shipping. These increase the complexity and variability of your fulfillment processes. 

Keeping up with Innovation: While focusing on fulfilling increasing orders, you may need more resources and time to innovate and improve your fulfillment processes. This can limit your ability to adapt to changing customer expectations and market conditions. 

Regulations: Scaling into new markets or regions has its perks and challenges. Countries have laws that require you to comply with different government standards regarding taxes, customs, duties, safety, environmental impact, etc. These can add more costs and complexity to your fulfillment operations. 

It's important to proactively and strategically address challenges impacting fulfillment efficiency, quality, and customer satisfaction. 

So, let’s look at how we can take on these challenges and emerge as winners. 

Best practices for smart scaling your fulfillment operation 

To overcome growth challenges in your fulfillment operations, it is essential to strategically scale your business and implement best practices that can improve efficiency and quality and reduce costs and risks. 

Let’s look at the best practices for smart scaling your fulfillment operations. 

Assess the current and future customer demand and expectations 

For your growing brand to succeed, it is crucial to deeply understand the market trends, customer segments, and preferences that can impact your fulfillment operations.  

By gaining insights into these areas and making data-driven decisions, you can optimize your operations, improve customer satisfaction, and ultimately drive growth for your business.  

For example, IKEA considers the demand for low-cost, high-quality, sustainable products in different regions and channels. 

Consumer preferences, expectations, and purchasing power differ across regions, influencing the demand for specific product features and price points. In some markets, affordability may be the primary driver, while quality and sustainability may take precedence in others. IKEA considers these nuances and adapts its product mix accordingly. 

Evaluate the existing fulfillment capabilities and gaps 

To sustain growth, you should regularly evaluate your fulfillment capabilities and identify performance gaps.  

Conduct an audit to identify your strengths and weaknesses and take necessary steps to improve its fulfillment process.  

This will help ensure that your brand can meet customer expectations and maintain high customer satisfaction, which is essential for long-term success.  

Taking a cue from IKEA, the brand balances cost efficiency and customer service by utilizing a hybrid model of in-house fulfillment and third-party logistics (3PL) providers. 

Defining a clear vision and set of objectives is crucial to guiding your fulfillment operations growth. This means taking the time to carefully consider your business needs, customer expectations, and available resources to determine the best course of action.  

Once you have a solid strategy, you can choose the fulfillment model that aligns with your goals and maximizes efficiency, whether in-house, outsourced, or a hybrid approach.  

Use Technology to Optimize the fulfillment process 

Nike does a fantastic job at optimizing its fulfillment process using technology. 
 

For example, Nike utilizes 3D printing technology to produce custom-made products like the Nike Vaporfly Elite Flyprint shoe, which is meant for elite marathon runners. This approach helps Nike to reduce material waste, shorten production time, and lower shipping costs. 

The company also uses smart sensors to track and monitor its inventory, orders, shipments, and returns. RFID tags embed information about each product, such as size, color, style, and location.  

Utilizing the right technology allows you to centralize your supply chain process on one platform and access inventory data from various sources, including suppliers, distributors, retailers, and customers, to optimize your fulfillment process.  

Build a flexible and resilient fulfillment network 

Fostering strategic partnerships across different regions is crucial for efficiently scaling fulfillment operations. 

You need to establish a network of fulfillment centers, warehouses, distribution centers, and partners to handle the increasing order volume and complexity.  

For example, Nike partners with JD.com, China’s largest online retailer, to offer same-day delivery service in select cities. Nike also partners with Flexport, a digital freight forwarder, to streamline its international shipping process. 


Choosing the right fulfillment partner for your business 

Depending on your business size, goals, budget, and capabilities, you may decide to handle your fulfillment operations in-house or outsource them to a third-party service.  

Each option has advantages and disadvantages, so you need to weigh them carefully before deciding. Here are some tips for choosing the exemplary fulfillment service for your business: 

Some tips for choosing the right fulfillment partner for your business are: 

Estimate your monthly order volume: If you have a low or inconsistent order volume (less than 100 orders per month), you may prefer to handle your fulfillment in-house. However, if you have a high or steady order volume (more than 100 orders per month), you may benefit from outsourcing your fulfillment to a third-party logistics (3PL) provider. 

Consider pricing and fees: Regarding fulfillment services, the pricing, and fees can be affected by several factors, such as the number of orders, size and weight of the products, storage requirements, shipping methods, additional services, contract duration, and so on. It's crucial to compare the pricing and fees of different fulfillment services and choose the one that provides the best value for your money. 

Check reviews: It is essential to consider the reputation and reviews of various fulfillment services to determine their quality, reliability, and customer satisfaction. You can evaluate the reputation and reviews of such services from different sources like online platforms, industry associations, customer testimonials, and more. A partner with a good reputation and great customer and expert feedback is recommended. 

Use of Technology: When selecting a fulfillment partner, it’s crucial to consider the ease of technology integration into their operations and accessing critical information that can either make your business thrive or bring challenges. OPLOG offers a solution that simplifies your fulfillment operations with 4PL service, allowing you to focus on providing exceptional customer service without worrying about balancing smooth operations. With OPLOG-ONE, you get a platform that maximizes IoT and enables you to manage all aspects of your orders, packaging, shipping, and delivery in one place, making your job much easier. 

To achieve sustainable growth, it is crucial to scale fulfillment operations effectively.  
 

This can be accomplished by proactively addressing fulfillment challenges that might arise, creating strategic partnerships with key players in the industry, and adopting technology solutions that enable businesses to streamline their processes and increase efficiency.  
 

As stated earlier, choosing the right fulfillment partner with 3PL/4PL services removes most of your scaling worries, helping you align fulfillment capacity with customer expectations. 

Master the language of global shipping with our guide on Incoterms: From DDP to EXW, learn how to navigate international logistics for smooth transactions.

DDP vs Other Incoterms

Incoterms are like the traffic lights of global commerce: they keep things moving smoothly, preventing misunderstandings.

International shipping can be complex, with various challenges and rewards. To ensure a smooth logistics operation, stakeholders use Incoterms, a global shipping language that outlines the journey of goods from factory to doorstep.

The shipping terms range from Delivered Duty Paid (DDP) to Ex Works (EXW), and choosing the right one depends on the specific requirements of the buyer and seller.

Understanding Incoterms is essential for stakeholders to know their responsibility and ensure a hitch-free logistics process.

DDP stands for Delivered Duty Paid, an Incoterm that defines the responsibilities and risks of buyers and sellers in international trade.

Under DDP, the seller is responsible for delivering the goods to the buyer’s place of destination and paying for all the costs and duties involved in the transportation and clearance of the goods.

DDP is the most favorable term for the buyer, as it transfers all the risks and obligations from the seller to the buyer. The buyer does not have to worry about additional charges or delays in delivering the goods, as the seller bears all the consequences. The buyer only has to pay the agreed price for the goods and receive them at the specified location.