Workers receive boxes through the automated box delivery system, pick ecommerce orders, place them in boxes,
and send complete orders through the conveyor to the automated shipping system.
When a package arrives at your door, the last thing an online shopper thinks about is what it took to get it there.
“Many people underestimate the complexity of the fulfilment aspect of ecommerce,” says John Ferguson, president and CEO of SCI in Toronto. “Few people understand how operationally complex fulfilment and distribution is. It’s not just about setting up a warehouse facility. You have to be able to pick and ship multiple items with absolute accuracy.”
This requires countless pieces to work together seamlessly, from inventory management and order processing to shipping and tracking. It needs to happen while managing the dramatic ups and downs created by the seasonal swings of consumer demand.
An underlying part of that puzzle is large-scale, state-of-the-art systems and technologies to manage ordering, warehousing, inventory and distribution functions, Ferguson says. Another invaluable asset is long-standing industry experience. “You can only be effective at ecommerce logistics processes once you’ve picked up some battle scars along the way.”
SCI’ experience dates back more than a decade, when it started a dedicated operation in Canada for one of the world’s largest ecommerce companies, he explains. “At that time there wasn’t a lot of ecommerce going on in Canada, but SCI managed the operation at an enormous scale, housing 900,000 product SKUs [stock keeping units] or 1.8 million items; fulfilling on an average day more than 25,000 orders containing over 60,000 items; and then adding gift wrapping, kitting and other value-added services.”
The company built on that early ecommerce foundation to become an industry leader, he adds. “That experience is key in this industry, especially given the fact that ecommerce continues to see double-digit growth each year. Our own operations have in fact doubled in size over the last three years alone, including significant expansion into Western Canada.”
Traditional retailers who have developed their supply chain over decades are experiencing a completely new set of rules to handle ecommerce and omnichannel business, he says. “Now it’s small picks on an item level, and individual shipments going to people’s homes. You have to rethink the network and systems infrastructure to make that happen.”
A growing focus of SCI’s ecommerce logistics strategy is the use of regional multiclient facilities throughout Canada. In this model, different retailers and channels share resources within the same facility, getting access to technology and a national distribution centre network to bring inventory closer to their markets.
“Typically that’s used by mid-size operations because it allows for flexibility and faster start up at lower cost. From there they can ship product direct to store by the case, or deliver individual items to households.”
With the demand for accuracy, Ferguson says technology has been a big enabler in ensuring inventory visibility and control.
“As ecommerce matures, we are constantly improving our [fulfilment] practices. We are always applying new ways to scan, pick, process and pack orders faster and more accurately and looking for opportunities to automate processes. At the same time, on the transportation side we are working on optimizing the delivery network.”
One element that has set SCI apart in its fulfilment success has been its ongoing relationship with Canada Post, Ferguson notes. “They’re the leader in parcel distribution and delivery, providing the broadest coverage at the lowest cost. They can deliver to every home in the country, get to places no one else can, even rural and remote areas.”
As ecommerce evolves SCI is working on several strategic initiatives with Canada Post to deliver a more comprehensive solution for the ecommerce supply chain, he adds. “It’s a very integrated relationship.”
For example, an important part of the partnership has been the ability to link SCI’s warehouse management systems with shipping and tracking services from Canada Post. “Our systems talk to one another, so we have greater visibility and ready access to data when we need it,” Ferguson says.
This relationship is especially important on the returns side. SCI is enhancing a joint program with Canada Post for managing returns across the supply chain from start to finish.
“If you add together our resources and experience, we have the ultimate logistics solution for Canadian ecommerce.”