It sounds like a great idea when someone first brings it up at the executive conference table: Let’s increase sales and profits by selling our products online and shipping them directly to the consumer. After all, who doesn’t want to increase sales and profits?
Yet, like many seemingly great ideas, such as solar-powered homes or the second “Star Wars” trilogy, success is really in the execution. Adding e-commerce capabilities to an existing warehouse or distribution center (DC) requires more than installing new equipment or revamping workflows to accommodate small quantities. There are many factors that must be considered, starting with your organization’s readiness and commitment.
The hard reality is the bar for delivery has been set very high by the current crop of online sellers, so there is no room for error. It’s a very unforgiving marketplace.
If there are any missteps—inventory not being available when customers order, shipping the wrong product(s), orders arriving to the customer late or incomplete, etc.—you may lose that customer for life. Not just for your e-commerce site, but your other sales channels as well. So you either need to be “all in,” or you need to hold off until you can dedicate the capital and the resources to do it right. Just keep in mind that if you feel you’re not ready yet, get ready fast. It’s no longer a question of if e-commerce may impact your space; it’s a question of when.
Following are some suggestions that can help you add e-commerce to your market space.
Put Together a Cross-Functional Team
Naturally, step one of building that team is finding an executive sponsor—someone in the C-suite who fully believes that e-commerce is necessary, and has the clout to help you obtain the time, personnel resources and funding to do it right. Also make it someone with the authority and respect to make the tough decisions along the way, because there is going to be tough decisions. Without that, all the rest may be an exercise in futility.
You want to bring in leaders in marketing, sales, IT, operations, inventory management, accounting, even facilities management and maintenance—just as you would with any other challenge. e-Commerce operations are very complex and require a great deal of integration across the enterprise. Every part of the organization that would be impacted should provide input and have a stake in how to enter the e-commerce market. Otherwise, you may encounter problems and resistance when what you need is focus and cooperation.
Consider Bringing in an Expert
Once you have your internal team assembled, you’ve reached your first major decision point: Do you try to figure out how to add e-commerce capabilities to your warehouse or DC alone, or do you hire an outside expert with experience in these types of conversion?
While doing it yourself may seem like the least expensive or most expedient option initially, there are so many potential break points in an e-commerce conversion that the odds are it would take longer and cost you more to do it yourself in the long run. Integrators with extensive experience in preparing warehouse and DCs for e-commerce already know the questions to ask, considerations to make and pitfalls to avoid. They also likely know some intelligent shortcuts that can help you implement your conversion while your competitors are struggling to figure it out on their own.
Work the Process End to End
It’s very easy to get caught up in one aspect or another of a move to e-commerce. One major mistake companies make is focusing on selecting cool equipment and/or software, then trying to make the rest of the operation conform around it.
The smarter approach is to look at the entire process and work through it end to end. For example, how would the front-line site’s ordering software integrate into real-time inventory management? After all, you don’t want to show customers that you have an item in stock, ready for the promised free, same-day shipping when another customer just snatched up the last one.