Supply Chain Management (SCM) refers to the use of computer network technology to comprehensively plan the business flow, logistics flow, information flow, capital flow, etc. in the supply chain, and to plan, organize, lead and control them. In other words, supply chain management is the use of advanced information technology to collect information from all parties in the supply chain and market demand to reduce the error in demand forecasting, control logistics with real-time and accurate information, reduce or even eliminate inventory (realize the “virtualization” of inventory), and thus reduce the risk of holding inventory.
The importance of inventory and supply chain management
(1) Inventory and supply chain management are the core competitiveness in operations
After completing product selection, sellers must do a good job in product supply chain management. Inventory management is the core competitiveness in store operations and can widen the gap between sellers. A well-organized inventory management method can greatly improve the seller’s delivery efficiency, save time costs, and thus improve the customer’s shopping experience.
According to the rules of the Amazon platform, the factors that affect the weight of the listing mainly include sales volume, conversion rate, review star rating, quantity, total sales, etc. Therefore, in order to restore or even improve the sales volume and ranking of the listing, sellers need to start with the above factors and embark on a journey of rebuilding.
The real operational task of Amazon sales is logistics and order fulfillment. When a brand decides to start selling on Amazon, the seller must consider how to manage, transport and track outbound orders. There are usually two ways: Amazon fulfills the order and the merchant completes the order. Whichever implementation method the seller chooses will determine the seller’s visibility of inventory tracking and inventory management capabilities.
(2) Inventory and supply chain management are important means of controlling costs
After the seller receives the order, if it is out of stock, it will suffer a great loss. Because the product out of stock means that the product will stagnate, Amazon will temporarily stop allocating traffic to this product, and the product originally ranked behind will overtake this product. If you happen to encounter a high replenishment period and the out-of-stock time is extended, then the listing you have worked so hard to create may be copied by others, making others successful. Sellers can effectively reduce the risk of out-of-stock through reasonable inventory and supply chain management.