When organizations begin a digital transformation and eCommerce journey, they often focus solely on technology. In reality, there are business decisions to be made and opportunities to explore before technology even comes into play. After setting your objectives, evaluating your market, and determining where you fit, you need to evaluate where your organization stands today with your availability strategy, product information, sales team, and IT capabilities to know where you’re prepared to grow.
Availability Strategy
A clear stocking strategy is critical to establishing availability or delivery expectations and enabling ongoing engagement with your buyers. As you consider that strategy, it needs to be aligned with your customer strategy. Once clear expectations regarding availability and lead times are established, you can leverage data to evaluate sales trends, product costs, logistics capabilities, and replenishment resources. Product and customer mix may lead some B2B suppliers to adopt some combination of the strategies noted below.
Build-to-Stock
Also known as “made-to-stock,” this stocking strategy focuses on historic demand and future sales forecasts to maintain appropriate inventory levels. Orders are filled from stocked inventory rather than producing or acquiring products as orders come in. Companies adopt this method when rapid delivery is critical, but this approach is problematic for high-cost or customized products.
When this strategy is adopted, the next decision centers around inventory placement. Evaluation of regional demand informs inventory placement, as does delivery cost and expectations. Some organizations have chosen to establish internet inventory locations to simplify stocking and limit channel conflict.
Build-to-Order
Companies that adopt a build-to-order strategy produce products only upon receipt of order. Also known as “made-to-order,” this method begins the production or fulfillment process after an order is placed. This results in longer fulfillment times and puts pressure on the supply chain, but also reduces inventory investment. Manufacturers and distributors that follow this process generally sell products of higher value that are more specialized or customizable.
Supply Chain Assessment
Longer lead times are expected for more expensive products that require customization or have regulatory considerations. For more generic, fast-moving, or lower-priced items, customers expect quick delivery after ordering (thank you, Amazon). It’s important to provide transparency regarding lead-time, shipping costs, and any other costs anticipated when you receive a client order. For many B2B sellers, providing this level of transparency without human intervention is a significant challenge.
Another factor to consider is simplifying your fulfillment logic. For manufacturers and distributors with multiple fulfillment locations or production facilities, it can be difficult to determine the best way to fulfill an order. In many cases, this function is often provided by customer service representatives. Automating this process can be complex and difficult, but it’s important for B2B businesses moving online, particularly given multiple line items orders typical to this market.
Providing a delivery estimate for complex orders can also be a challenge. Shipping items from multiple locations increases shipping costs, but at times is unavoidable. Determining when and for whom to provide that level of service is important. When digitally transforming your B2B strategy, look for areas of your supply chain where shipping and fulfillment decisions can be automated. Need help? Consider investing in an order management system (OMS).
Next, you should evaluate your product development, management, and sales capabilities. To read more about digital transformation in B2B eCommerce, check out our guide.
