eCommerce Supply Chain Trends 2024

Introduction

In the latest episode of the Store Hero podcast, host Thomas is joined by Jamie Clark, the founder of Impact Evolve, a consultancy specializing in supply chain operations. Jamie shares his extensive experience working with various founder-led brands, discussing the critical role of effective supply chain management in scaling businesses.

Understanding Impact Evolve

Jamie begins by explaining the inception of Impact Evolve, which was born from his firsthand experience in senior roles within supply chain operations across brands such as Hotel Shakar, Beer 52, and Bulk Nutrition. Each of these brands scaled rapidly, revealing a recurring theme: while frontend operations often received most of the investment and focus from founders, backend operations—where Jamie specialized—needed attention to ensure the brand's scaling success. Impact Evolve was established two years ago to assist brands in navigating the complexities of their operations as they grow.

The Common Oversights in Supply Chain Management

Jamie emphasizes a prevalent trend he has noticed within eCommerce brands, where the focus tends to be on paid media and marketing while backend operations are often overlooked. He stresses that neglecting backend processes can significantly affect the brand’s performance, leading to issues like long lead times and unhappy customers. He argues that founders, driven by growth metrics, tend to gloss over the crucial aspects of operational capacity and infrastructure required for scaling.

Recognizing Signs of Complexity

As businesses expand their operations, they often face complexity—not just in volume, but also in logistics, channels, and territories. Jamie notes that businesses don’t always recognize when they need to transition from a team of generalists to specialists, which can be pivotal in sustaining growth from a certain revenue threshold (typically around 5 million).

When to Get Help

A critical point of engagement for Impact Evolve is when brands aim to launch into new territories or expand sales channels. Jamie discusses how often these changes are attempted without building the necessary capacity—leading to rising costs and failed deliveries. He advises businesses to recognize that successful scaling requires building infrastructure to support the new demands of their growing operations.

Managing Relationship with 3PLs

Many brands are turning to third-party logistics (3PL) providers to handle their fulfillment needs. Jamie underscores the necessity for brands to foster strong partnerships with their 3PLs by having robust communication about upcoming marketing campaigns and order volumes. Often, brands assume that 3PLs will manage everything without providing adequate information, which can lead to operational failures.

Identifying Good and Bad 3PLs

A good 3PL will challenge brands, asking crucial questions about their operations and ensuring they have the necessary data to succeed. Conversely, a poor 3PL might only act on the information provided without seeking further clarification or offering insights. Developing a healthy partnership through transparency and expectation management can significantly impact supply chain effectiveness.

Preparing for Holidays

With the holiday season approaching, Jamie stresses the importance of planning. He shares his personal experience from when he first handled the Black Friday and Cyber Monday seasons, which was a learning curve marked by overreach and stress. Jamie highlights the importance of preparing cross-departmentally, where marketing, operations, and logistics collaborate to create a cohesive plan.

Conclusion

Jamie Clark's insights illustrate that understanding the intricacies of supply chain logistics is pivotal for eCommerce brands looking to scale. By investing in backend operations and building strong partnerships, brands can set themselves up for sustainable growth and success in 2024 and beyond.

Keywords

Supply Chain, eCommerce, Operations, Scaling, 3PL, Black Friday, Inventory Management, Logistics, Strategy, Impact Evolve.

FAQ

What is Impact Evolve?
Impact Evolve is a consultancy focused on supporting eCommerce brands in optimizing their supply chain and operations as they scale.

When should brands consider hiring a consultant for supply chain management?
Brands should consider hiring a consultant when they begin to face complexities in their operations, particularly during territorial expansions or launching new sales channels.

How can brands prepare for high-demand periods like Black Friday?
Brands should prepare cross-departmentally, ensuring collaboration between marketing, operations, and logistics while planning resource allocation and inventory management well ahead of the peak season.

What should brands look for in a good 3PL?
Good 3PLs will ask the right questions, challenge assumptions, and help brands assess their operational needs effectively to ensure successful collaboration.

Why is inventory management critical for scaling brands?
Effective inventory management helps prevent overstocking and understocking, ensuring that brands can meet customer demand without tying up cash in unsold inventory.