The Importance of Data for E-Commerce Logistics: How to Use Data Analytics to Improve Your Supply Chain

As the e-commerce market becomes increasingly competitive, it becomes more important to sell your products through multiple channels and work with various logistics providers all over the globe.

With this added complexity comes the need to figure out how to manage all the extra channels and providers, not to mention how to do it efficiently. 

What is the key for e-commerce retailers to have success in today’s fast-paced environment?  Data.

Collecting, analyzing, and making informed decisions based on data collected from your supply chain activities is one of the most important resources in giving your company an edge over the competition. 

Collecting and analyzing data on your logistics can help your business in many areas, including

• Optimizing inventory levels
• Making delivery as efficient as possible
• Bargaining with carriers
• Reporting on supply chain activities & sustainability

In order to get the data you need to make those informed business decisions, you need to use software systems that can collect data on your supply chain constantly. 

In this article, we’ll run through the specifics on each one of those points; why they are important, and how data can help you better manage and make decisions concerning each one.

Plus, we’ll discuss some of the best ways you can collect and analyze data on an ongoing basis. Read on for more!

Read about CBIP's Adaptable 4PL Logistics Services

Optimizing inventory levels

The average stockout rate among e-commerce businesses can be as high as 10%. If you aren’t optimizing your inventory and keeping track of what you have, you are missing out on sales.

It isn’t easy to know how much stock to have on hand. Many before the pandemic were proponents of the just-in-time method, while post-pandemic many DTC retailers began storing large amounts of stock to avoid the supply chain issues of COVID times.

However, it isn’t just about keeping more stock than you need or just enough to satisfy orders for the next month or so. Nowadays, it's all about forecasting demand; utilizing predictive analysis of historical data to find the right stock levels for every item, at every time of year.

Nearly three in four retailers struggle with accurately predicting demand, which leads to shoddy restocking methods, and possibly money wasted on unnecessary storage.

How can you improve fulfillment?

Last-mile logistics is notoriously difficult and inefficient. Software developers and carriers have been working on making the last mile of logistics more efficient since the burst in the growth of e-commerce in the 2010s. 

One of the most effective tactics is using AI software that can take data from various sources- weather, traffic prediction models, and historical delivery time data, to optimize delivery routes like never before.

Bargaining power with carriers

This past year in North America, shipping rates for the major carriers rose around 6 percent — more than that if you consider all the small increases in surcharges and new fees tacked on. 

The rise in rates and competitiveness in the e-commerce space means that you have to get creative to cut costs where you can. That means using data to gain leverage.

How? By using the one bargaining chip that works best with the carriers when you want them to reduce your rates: Historical shipping data. To get the best rates, you need to have the data to hand over to your carrier. 

Sustainability reporting

This year was a big year for ESG reporting standards. In the EU in particular, some major changes in requirements are underway.

 For large listed companies, reporting on what goes on in their supply chain is now mandatory. For smaller listed companies, the standards are different, since their resources are considerably smaller, but the EU is still requiring the smaller companies to report on certain activities at a later date.

The new reporting requirements have not become a reality everywhere yet, but we are entering an era in which it seems likely that it soon will. For e-commerce companies of any size, it’s important to start thinking about how you will collect that data now before the requirement begins.

How to collect data

When it comes to collecting data on your supply chain actions, you need a centralized platform that can integrate with all your logistics providers. This may come in the form of a WMS (warehouse management system), TMS (transportation management system), or OMS (order management system.

Although the names differ and they all cater to different areas within logistics, all three of these software have similar purposes at their core: automate processes and collect data constantly to create reports.

A TMS is typically used more by carriers and other transportation companies, useful for tasks like:

• Optimizing routes
• Tracking shipments
• Managing carriers

The WMS is for internal use, and helpful for tasks like managing stock levels, tracking stock movement throughout a warehouse, and forecasting product demand peaks. They are particularly good for helping plan how much inventory to keep on hand, saving you from overspending on storage and making stock-outs less likely.

Then there’s the OMS, which is often capable of managing and collecting data on the entire supply chain journey - from order to delivery. If you can find a great OMS, this platform will be able to collect data and create reports on most of the tasks that the TMS and WMS handle.

CBIP has a new OMS to help you collect and analyze logistics data

For those wondering how to collect and take advantage of data from their logistics operations, look no further. 

CBIP Logistics has created an in-house OMS that can manage the entire logistics process end-to-end, all while collecting data from every step of your logistics and providing you with the most important KPIs to help grow your business.

You might wonder how we are able to collect data on your entire logistics operation so seamlessly. As a global 4PL, we do not own any of the logistics assets we work with (for instance, the warehouses). Instead, we have a vast network of independent providers we work with. 

Although those providers are not owned by CBIP, we take care to make sure that each one of the providers we work with is integrated into CBIP’s OMS platform. All their technology, all the data from their in-house systems, feeds into our platform and ends up in your portal.

Want to learn more about CBIP’s new OMS, or just want to take advantage of a totally free logistics consultation with one of our own? Reach out today,