Maintaining the growth of an ecommerce business often hinges on a smooth, efficient supply chain. As businesses expand, the logistics of sourcing, inventory management, and timely delivery become more complex. Ecommerce companies committed to scaling their business often hire a supply chain manager to help manage these growing complexities.
A supply chain manager doesn’t just navigate these intricacies but optimizes them, ensuring your business can scale without hiccups. They can pinpoint areas for improvement, forecast demands with precision, and create strategies that align with customer expectations. These benefits and more make supply chain managers an important asset for an expanding ecommerce business.
In this article, we explore what a supply chain manager actually does and just how they can benefit a growing ecommerce business. We’ve also created a free supply chain manager job description template your company can use to help you find the perfect candidate.
What Does A Supply Chain Manager Do?
Supply chain managers are responsible for managing the overall supply chain strategy. This includes optimizing the end-to-end processes involved in the production and distribution of goods. Their responsibilities are especially crucial in ecommerce, given the expectations of online shoppers for timely and accurate deliveries. Here’s a deeper dive into what a supply chain manager’s role looks like:
Key Responsibilities of a Supply Chain Manager in Ecommerce
- Strategy Development: Supply chain managers develop and implement a comprehensive strategy for the entire supply chain, ensuring alignment with the company’s business goals.
- Supplier Management: They negotiate contracts with suppliers to ensure favorable terms for the company. This could include bulk discounts, payment terms, a negotiated minimum order quantity, and more. They also evaluate and select suppliers based on factors such as quality, cost, and delivery times.
- Inventory Control: They ensure that inventory levels are optimal. They should never be too high (leading to excess holding costs and potential wastage) nor too low (leading to stockouts).
- Demand Forecasting: Using historical data and market trends, they predict future product demand to plan inventory and production accordingly.
- Logistics Management: This involves overseeing the transportation of goods from suppliers to warehouses and from there to the end customer. They coordinate with transportation providers, ensuring timely and cost-effective delivery.
- Cost Management: By constantly assessing and optimizing the supply chain, they aim to reduce costs. This includes costs coming from production, transportation, warehousing, and more.
- Risk Management: They identify potential risks in the supply chain, from supplier failures to transportation disruptions, and develop strategies to mitigate these risks.
- Quality Control & Assurance: They establish quality standards and ensure that both suppliers and the internal production process adhere to these standards.
- Liaison: They act as a bridge between various departments like sales, finance, production, and logistics. Effective communication ensures that all units function collaboratively.
- Returns Management: Ecommerce businesses often have higher return rates than traditional retail. Managing reverse logistics efficiently is essential.
- Global Supply Chain & Distribution: Many ecommerce businesses source products from, and ship products to, locations all over the world. This adds layers of complexity to the supply chain.
- Supply Chain Analytics: They use data and supply chain analytics tools to monitor supply chain performance and identify areas for improvement.
- Continuous Improvement: Supply chain management is not a static field. Managers should stay up to date with the latest trends and technologies to improve the supply chain.
Supply Chain Manager vs. Logistics Manager
As an ecommerce professional, you might be wondering if a supply chain manager is the role your business truly needs. You might have come across the title of logistics manager and are wondering if that role would be better suited for your business needs. So what is the difference between the two? This section will explain which role is best for which business needs.
Understanding the Roles
Supply Chain Managers typically oversee the entirety of the supply chain, from the procurement of raw materials to the delivery of final products to the customers. They manage relationships with suppliers, negotiate contracts, and ensure that every aspect of the supply chain is running as smoothly and cost-effectively as possible.
Their role is comprehensive and strategic, ensuring an optimized supply chain from end to end. If your ecommerce business has a complex supply chain with a multitude of products, suppliers, and distribution networks, a supply chain manager can bring the necessary oversight and coordination.
Logistics Managers, on the other hand, tend to focus more on the movement and transportation of goods, covering both incoming and outgoing logistics. They are responsible for handling inbound shipments of raw materials or goods, managing warehousing and distribution, dealing with customs, resolving storage issues, and managing shipping costs. They work to ensure that every aspect related to the movement and storage of goods is optimized, ensuring products are received and delivered efficiently and on time.
Which One Should You Hire?
Some overlap exists between these two roles since logistics is a component of the supply chain. But remember, logistics is more specific and focuses on the movement of goods (or the final steps of the supply chain), whereas supply chain management has a broader scope encompassing procurement, vendor management, and more.
If the challenges your ecommerce business faces are mainly related to the transportation, storage, and delivery of products – like frequently late shipments or issues with customs – a logistics manager might be the better choice. However, if you’re grappling with issues that span the entire supply chain, from procurement of raw materials to your own inventory management, a supply chain manager would be the better choice to help tackle these end-to-end issues.
Why Growing Ecommerce Companies Can Benefit From Supply Chain Managers
Below are some of the ways a growing ecommerce company can benefit from hiring a supply chain manager:
More Efficient Operations
A supply chain manager can bring unmatched efficiency by streamlining the entire supply chain from start to finish. They play a crucial role in reducing supply chain delays and ensuring smooth operations. The introduction of a well-planned inventory management system under their direction could keep ideal inventory levels, minimize overstock and shortages, and notably reduce holding costs.
Through technology like ecommerce inventory management software, businesses gain access to real-time tracking, analytics, and comprehensive data, allowing for informed and timely decision-making. A supply chain manager can use this technology to further streamline operations and boost overall efficiency.
Improved Cost Optimization
Cost management is a core function of a supply chain manager. They hold the knowledge to significantly lower operations costs through smart negotiations, process improvements, and thoughtful planning. For example, a supply chain manager could negotiate contracts with suppliers or find alternative suppliers to reduce raw material costs.
Supply chain managers might also lower costs by:
- Negotiating better terms with suppliers
- Automating various supply chain processes
- Using different suppliers to mitigate risks
- Improving warehouse efficiency
- Evaluating supplier performance and holding them accountable
- Operating under “lean” principles
A supply chain manager should be included in the company’s strategic planning. They can ensure the supply chain is flexible enough to meet growth objectives and customer demand, laying a solid foundation for scalable and sustainable operations.
Better Supplier Relationships
A supply chain manager also excels in managing and building relationships with suppliers and vendors. Effective and regular communication coordinated by the supply chain manager can solidify these relationships, ensuring a reliable and consistent supply of goods. This can lead to long-term, stable partnerships that contribute to the business’s success.
Compliance with industry standards and regulations is another crucial area where a supply chain manager contributes significantly. Supply chains are subject to various local, national, and international regulations that oversee product quality, safety, and logistics. A supply chain manager with a solid grasp of these regulations ensures that the business operates within the legal framework, avoiding potential fines, penalties, and damage to the company’s reputation.
Enhanced Customer Satisfaction
Providing a high level of customer service is crucial for any ecommerce business. By ensuring timely, accurate, and efficient product deliveries, a supply chain manager directly contributes to enhancing customer satisfaction. An optimized logistics system ensures faster deliveries and accurate order fulfillment, leaving customers happy and more likely to return.
Supply Chain Manager Job Description
Download our free, customizable Supply Chain Manager job description template to find the perfect candidate for your company right away.
Tips For Hiring A Supply Chain Manager
Below are some thoughtful tips for those who have never hired for this role before:
Create a Comprehensive Job Description
A clear, detailed job description is paramount to attracting candidates who are not only qualified but also prepared and eager to take on the responsibilities and challenges of the supply chain manager role in an ecommerce setting. You can take advantage of our free, downloadable Supply Chain Manager job description as a robust starting point.
Seek Relevant Ecommerce Experience
Look for candidates with experience managing supply chains in a similar ecommerce setting. The right candidate should have experience that aligns with your business size, model, and needs.
For example, a candidate with extensive experience working in the supply chain at a company like Amazon might look impressive on paper, but might not have the skills needed to manage the supply chain by themselves at a smaller ecommerce company with a specific product. If your operations are smaller, you might not need someone with extensive experience managing global supply chains but someone adaptable, hands-on, and ready to deal with varied responsibilities.
Look for Alignment with Your Working Style
Find a candidate whose work style and approach align with yours. As you will be delegating significant responsibilities, ensure they are someone you can trust to stay organized without having to watch over their shoulder. You should also evaluate if the candidate will fit in with your company culture. If your team is small, each member plays a crucial role, and a new hire who doesn’t mesh well can disrupt the harmony and efficiency of operations.
Ensure you hire someone you’re not only confident can handle taking over the supply chain, but also feel comfortable working closely with.
Look for Project Management Experience
The supply chain of any business has multiple moving parts that must be carefully coordinated. A candidate with solid project management experience will be able to oversee various aspects of the supply chain efficiently to ensure that everything runs smoothly.
Emphasize Flexibility and Adaptability
For a growing ecommerce business, change is constant. Hire a supply chain manager who demonstrates flexibility and adaptability to evolving business needs and can help your business navigate growth and expansion seamlessly.
Navigating the complexities of the supply chain can be a significant challenge for growing ecommerce businesses. Hiring a supply chain manager is a crucial step in ensuring seamless operations, cost-efficiency, and satisfied customers. But why stop there?
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Let us handle your company’s logistics so you can get back to focusing on growing your business. Contact one of our fulfillment experts today to learn more about our services.