If you’re a regular reader of our blog, we recently discussed the importance of transitioning to a managed freight audit process and what you need to watch for when insourcing vs. outsourcing this function. We’ve also explored the benefits of incorporating Transportation Management System (TMS) technology into your data validation process. Now, we delve into the benefits of blending SKU-level data with your transportation data and its role in revealing game-changing prescriptive business intelligence.
Imagine the power of knowing which items to bundle together to maximize fulfillment, improve single SKU order variability and boost inventory and shipping synergies, ultimately maximizing profits and demand. Or, what if you could identify missed or lost sales opportunities due to delivery time or shipping costs and take steps to capture that market share? By understanding the fully allocated associated costs to every SKU, you can influence buying behaviors through targeted programs or incentives.
When it comes to building a comprehensive business intelligence platform, your SKU-level data is the missing piece that goes beyond how items are shipped to encompass what is being shipped. This data is crucial as it allows you to connect transportation costs with profitability management and make informed decisions that directly impact product margin.
By coupling your SKU-level data with audited and validated transportation data, you can gain valuable insights into several aspects of your business:
- Understand true profitability: Calculate the fully landed cost of products or orders. Understand which products or orders are truly profitable and which ones may be eroding your margins due to high shipping costs.
- Identify service exceptions and delivery issues: Identify items that have higher service exceptions or delivery issues. This knowledge allows you to address these issues proactively, optimize your delivery processes and improve your customer experience.
- Manage returns: Identify products with higher return rates and quantify the cost associated with these returns. Armed with this information, you can take steps to minimize returns, identify possible fraudulent activity and optimize inventory management.
- Balance shipping costs and margins: Find the right balance between shipping costs and margin. You can easily identify how carriers’ surcharges and fees are impacting product profitability.
- Understand inventory flow: Gain insight into internal transfers and fulfillment patterns, allowing you to optimize your inventory flow and distribution network. This understanding helps streamline operations, reduce costs and improve order fulfillment.
- Improve order conversion and reduce cart abandonment: Present transportation cost and service information during the ordering process to understand how it impacts order conversion and cart abandonment.
Did you ever believe that having a clean audit of your transportation transactions would lead to this possibility?
Matching product information with transportation/fulfillment costs and integrating that data is undoubtedly the most challenging part of the journey to building a first-class business intelligence platform. However, if you execute it correctly, this integration can transform your data from a descriptive state (the way it is) to a prescriptive one (the way it should be), helping you gain the ultimate competitive edge.