How Is E-Commerce Analytics Changing Logistics For Distribution Companies?

Distribution companies are implementing warehouse management systems (WMS) and enterprise resource planning (ERP) systems to streamline operations and create more efficient workflows. According to an article on the DC Velocity website, one of the most significant improvements to these systems in recent years has been the advent of e-commerce analytics.

With e-commerce analytics, wholesale distributors and manufacturers are not only able to examine the success of past operations, but also able to predict what decisions will lead to increased efficiency and profits in the future.

“Software vendors are working on analytics that can prescribe courses of action and even offer predictions as to where things are headed,” the article states.

Determining which vendors or carriers to use in distribution operations can be invaluable in decreasing costs and improving output for any business. If a WMS or ERP system could foresee these requirements, it could mean serious improvements to business success.

“In addition to making recommendations for improvements — say, suggesting the use of an alternative carrier to cut costs or improve service — some TMS (transportation management system) packages can look ahead and evaluate possible future scenarios. For example, the solutions can assess the potential implications of moving customers from pre-paid to collect freight. They can also assist with risk scenario contingency planning,” the article explains.

The DC Velocity article also reminds us that most systems are still behind in these needs. However, the direction and progress toward predictive e-commerce analytics is undeniable and necessary for distributors and manufacturers to cut costs and remain competitive in a changing and fast-paced marketplace.

Logistics managers considering a new ERP or WMS system would do well to find a system that includes strong analytical modules. Cloud systems like NetSuite offer an integrated ERP system with robust analytical capabilities. For example, NetSuite’s e-commerce analytics module can use location management and the integrated ERP and customer relationship management (CRM) modules to determine which locations and vendors are best to use for particular customers based on order size and customer location.

Such capabilities are not yet common in all logistics departments and are sure to give distribution and manufacturing companies an edge.

Source: DC Velocity, November 2013