How Cloud Computing Changed Shipping and Fulfillment
One of the biggest headaches for e-commerce sellers is the fulfillment and shipping process. Poor backend operations can slow down your efficiency, damage your customer service, eat away at your margins, and wreck the workflow of your business.
Cloud computing and blockchain tech advancements are looking to change that. With cloud-based methods to collect, store, analyze, and share data, partners along the supply chain are able to communicate in new ways that were previously impossible. Making this operations process more efficient is proving to completely revolutionize the entire e-commerce business from A to Z.
How is cloud computing changing e-commerce shipping and fulfillment?
What is It?
Cloud computing refers to the transfer of data and information from software services to the “cloud.” This includes software as a service (SaaS), infrastructure as a service (IaaS), platform as a service (PaaS), and grid and utility computing.
Basically, you’re storing and analyzing data through the cloud as opposed to a centralized hardware center or server. It’s similar to the idea of Apple’s iCloud, where information is stored remotely with (seemingly) unlimited storage.
Cloud computing has already made its way into the e-commerce world without a lot of sellers realizing it. It’s likely that your e-commerce website is hosted and stored in the cloud. If you want to make a change to your site, you’re actually making a request in the cloud. All of that customer data you’re gathering from your site is stored on that cloud system too. Email servers and software have also moved to the cloud computation format.
One of the most influential and interesting forms of cloud computing is blockchain technology. This allows multiple businesses and partners to collect, store, and share data. The system saves every instant of uploaded data, creating an informational chain of blocks stored through internet-based capacities. The blockchain shows all of the data from all logistics partners, which creates a clearer and more transparent communication process.
The influx of e-commerce companies has been drastically changing backend operations.
1. Processing High Volume
There are thousands of small e-commerce companies and retailers, sending millions of products and packages out each year. A boom in the volume of online orders has put a strain on fulfillment centers and trucking companies. Distribution centers are being forced to store more inventory, process more orders, and ship more goods—all within a short delivery window
Cloud computing is the hero of efficient processing. Information can be uploaded digitally in real time, which reduces the time spent on paperwork. After scanning an item, a logistics operator has access to a centralized hub of information that updates inventory, prints labels, and alerts the next part of the fulfillment chain that the product is on the way.
2. Improving Transparency
Transparency and visibility in the supply chain process are more critical than ever. The supply chain is growing increasingly more complex in the age of e-commerce. The many moving parts mean something can and will go wrong along the process. It’s important for retailers and transport companies to understand exactly where lags in the chain exist, so they can make the process more efficient and cost-effective.
Blockchain cloud computing has radically revolutionized the transparency of the supply chain. Every partner along the chain can easily and automatically upload all of their information to the cloud, where it’s instantaneously available to all other members of the chain. This means that updates happen in real-time, so everyone knows where the products are in production and transit. This not only speeds up the efficiency of the process, but it also helps identify lagging areas that aren’t meeting standards. Artificial intelligence is constantly analyzing the supply chain to present more streamlined solution opportunities.
3. Streamlining Routes
One of the biggest holdups for shipping companies is the time and energy needed to optimize shipping routes. LTL shippers are trying to fill their trucks with packages going to similar destinations to minimize the time spent on the road, the fuel expended, and the number of hubs and spokes at which the truck has to stop.
Cloud computing and data collection have made this process much smoother. Transportation management systems held in the cloud are able to utilize collected data to automatically suggest the most efficient shipping routes for a variety of retailers.
This not only speeds up the process for your business’s goods getting from production to warehousing to the customer’s door. It also minimizes the risk of damage, loss, or theft by reducing handling at multiple ports.
4. Managing Inventory
Cloud computing improves inventory management. All inventory information is held on the cloud and can be updated down to the second. This means that it’s harder to lose track of goods, which minimizes loss and enhanced asset protection. This can even be linked to customer-facing storefronts to ensure you never sell inventory you don’t have.
When inventory is effectively managed, the rest of the supply chain is more efficient in tandem. Mismanagement of inventory is statistically one of the greatest speed bumps in the supply chain, leading to shipment delays, loss of merchandise, and an overall increase in expense.
5. Enabling Robotics and Automation
More warehouses are starting to use robotics and artificial intelligence to better manage logistics centers. Robots are picking and packing, and AI is determining how to optimize warehouse layouts.
The majority of these advanced systems work through the cloud. The machines send their data to cloud servers, where they can interact through a single unified system. This means the warehouse robots can alert the system when inventory is low or there is a lag in the process. Truckers can alert the warehouse robots to a delay in shipments. The robots can even move through the warehouse most efficiently or recommend new layouts for faster mobility.
The technology can actually talk amongst itself to ensure the process is always running smoothly—all through the cloud. And thanks to the transparency of the system, none of this information being transmitted gets lost.
Read: Robotics As A Service
6. Reducing Cost
The cost of shipping and fulfillment is overbearing for a lot of e-commerce sellers, especially smaller businesses. Cloud computing, although initially expensive to implement, has helped reduce these costs for retailers looking to make their logistics more efficient.
The cloud is a more efficient means of storing and utilizing data, which innately lowers cost. It also improves interaction between partners, minimizing loss and saving time. These services also tend to be pay per use, so businesses have a direct correlation of overhead without any wasted expense.
7. Enables Scalability
The cloud has nearly unlimited data storage. (There are limits, but they’re much higher than you could imagine reaching. These servers are constantly growing as well, so “unlimited” isn’t that far off.) Hosting everything in the cloud means it’s a lot easier to scale your business operations. You don’t have to worry about restrictive hardware servers or data collection to keep your logistics running. Your cloud usage can always scale up with your business.
Plus, cloud computing allows for a more global reach. You aren’t localized to one area. If you decide to expand to foreign markets, cloud computing enables a swift and easy transition for your operations.
Cloud computing and storage is changing the way e-commerce works. Retailers have more capabilities than ever before, opening up the supply chain and logistics processes towards greater transparency and more efficient operations.
E-commerce fulfillment and shipping are poised to see massive changes and enhancements in the next few years, thanks to cloud computing. What are your thoughts about cloud computing? Let us know in the comments below.