Improving Ecommerce Efficiency with Kanban

• Introduction

• Kanban Basics

• Kanban in Order Processing

• E-Commerce: Status & Challenges

• Challenges in e-commerce

• Practical examples of using Kanban in e-commerce

• Implementation Tips

• Potential Hurdles

• E-Commerce Trends

• Kanban Implementation Resources

• Final thoughts

Introduction

Kanban was initially developed in Japan as the principle of lean management. The system also maps the whole process from order taking to delivery so as to enable the company to manage and cut on the systematic wastage.

E-commerce has changed the nature of commerce as it is now easier to sell or purchase a product and or service. Today the industry is huge with millions of transaction happenings across the world on a daily basis.

Order management and order fulfilment are the wheels that any successful e-business must keep well oiled. These two elements are central to customers’ relations and organization operational performance.

Getting an order is a process which starts from the time a customer places an order and ends at the time the products are picked, packed and ready for dispatch.

Fulfillment of orders involves holding of stocks, processing of orders, packaging of goods, and delivering the products to the customers.

Both aspects are part of the operation and they impact on the ability to deliver quality customer service.

Kanban is used to optimize the work of e-commerce by making order processing and order fulfillment as efficient as possible. It offers a clear window into the state and flow of work, so that businesses can improve on the flow of stock, delivery of orders, or elimination of constraints.

Kanban Basics

Kanban works on several basic principles.

1. First, it is a visualization that presents work items and workflow steps for easy understanding.

2. The second is work-in-progress (WIP) restriction, which helps manage workflow and prevents overload.

3. The third principle is flow management, which aims to create a smooth workflow, and the last is continuous improvement, in which the process is regularly reviewed and improved.

Kanban in Order Processing

The application of the Kanban system may require writing down an order processing flow in an online store. When laid down in this format, teams can easily understand all the stages, right from order placement to delivery. Thus, it is possible to determine problem areas, as well as the existence and nature of bottlenecks.

Overload situation can be prevented and teams can also maintain focus on a particular task by establishing a limit on the amount of work. Restrictions in the number of orders that are handled at any one time aids in operations when it comes to e-commerce and quality.

Kanban enhances flow in a manner that there is a constant stream of work in the system. This makes sure that orders which pass through e-commerce go through the various steps without hitches or any setting back. This constant flow can improve order cycle time and in turn the satisfaction of the customers.

Regular systems analysis and assessment enable change according to the gained experiences from its use. This is done through the constant enhancement of the order processing system used by e-commerce businesses depending on the feedback and observation noted. The outcome is what has contributed to the upward trend in the efficiency and satisfaction by customers.

E-Commerce: Status & Challenges

The use of ecommerce has been on a exponential rise in the recent decade. This means that the proper resolution of e-commerce order fulfillment strategies and processes is more important than ever.

Thus, the work process could be defined as receiving order, their further processing, and delivery to the customers. This is a combination of a number of activities right from storage and stock control to packing and dispatch.

E-commerce has had some involvement with technology, though its impact has not been as giant as some may believe. There is utilization of technology such as automation, data analysis, artificial intelligence and machine learning in order accuracy. Also for enhancing the operation efficiency and for maintaining the quality of the customer services. Further, because most retailing has transitioned to omnichannel, online and offline order fulfillment processes have had to be combined.

Challenges in e-commerce

Despite technological advances, e-commerce companies still face numerous challenges:

• Inventory Management: The first is maintaining an actual count of inventory and storage which may sound easy but can be a real headache as your organization expands. Lack of effective stock control will result to either experiences of stock-out or realization of excess stock which are bad for the business.

• Delivery time optimization: The bigger firms like Amazon have incorporated same-day or next-day delivery and such standards have become the new norm in terms of delivery time. This is one reason it is proving rather difficult to meet all these expectations of customers as well as remain profitable.

• Order Accuracy: Vital component of a company’s ability to create customer satisfaction. But if the assembly and packaging errors occur, there will be problems with the returns of the product and negative feedbacks.

• Scalability: It is quite typical for fast-growing e-commerce companies to face the problem of rapid growth of the scale of the order fulfillment.

• Returns Processing: Returns management ought to be efficient since a good return process attracts customers to continue patronizing a business. But as we have seen, processing returns may not be very easy and might take sometime.

• Sustainable development. Since consumers become more concerned about the effects of their actions on the environment, it becomes compulsory for most e-commerce firms to integrate environmentally sustainable strategies to order fulfillment. This also includes the green packaging and also the green logistic in that transport is well planned in a way that it has least impact on the environment.

Understanding the landscape and challenges associated with e-commerce is the first step to improving it.

Practical examples of using Kanban in e-commerce

Toyota: A car manufacturing company around the world adapts to the Kanban system. The Kanban board consists of three sections: It includes lists such as Backlog, In Progress, and Done by which team members are able to communicate, coordinate and become aware of where each work is up to till it is completed. This made Toyota’s work flow to be efficient and it shortened the number of hours and or days needed to complete a given task.

Spotify: Another example of an organisation that has adopted Kanban is the popular music streaming service. They use a simple board with three sections: The three categories that are used include the To Do list, the In Progress list as well as the Done list. Other types of cards include Postponed and Blocked which are used with tasks that are more time consuming or cannot be done for whatever reason. Kanban assisted Spotify organization in tackling its work and thus provided much needed time for innovation.

Pixar: An animation and film production company is a clear example of Kanban being applied across various departments for instance, concept art, modeling, production management and more, the department would feature several columns where different types of cards could exist depending with their status. Resources working on a project also change status to show progress thus enabling other teams to plan for their work schedules.

Apple: Uses Kanban with a modification called Dynamic Kanban that enables the workers to target their activities on trends that are most relevant. To them, their various processes come in the form of the backlog which entails a series of activities which involves different teams in doing work and the Done section which marks the completion of various work. It also contributes to fostering the spirit of togetherness for achievement of set objectives.

Zara: A fashion retailer applies it directly in the stores, differentiating their set-up into a pre-kanban state, which includes prioritization, a control state which means work in progress and the post control state, which implies that the task is done. They accurately include every piece of information related to their flow of work in their Kanban board, thus being helpful in making more sound business decisions.

Nike: Nike, the worlds leading shoemaker also adopted lean manufacturing strategy to solve the problem of poor factory working conditions. Although it is unclear how it utilises Kanban directly, Lean is combined with the concept of business processes in a way.

Implementation Tips

Implementing Kanban in an e-commerce environment involves several key steps:

1. First of all, it should be recognized what overall picture of order processing and fulfillment is at the present moment. This will provide a ground for a positive improvement as needs would be assessed and solutions sought for all of them.

2. It is then necessary that the various stages of the process be given a physical or even virtualrepresentation. It can be as basic as a board that has stickers for orders or as advanced as a digital Kanban board with integrated e-commerce capabilities.

3. The third step is to regulate currently performed work. This can be however difficult because it involves assessment of business opportunities. Usually it is more effective to set it higher and then lower it over time as the team develops an increased level of performance.

4. Next comes flow control. Another job is to control and enable change after change in order to maintain flow and stability.

5. Last but not least there should be a culture of perpetuity whereby the team is constantly engaged in scrutinizing the process and making necessary changes.

Potential Hurdles

A new concept of project management such as the Kanban system has several special characteristics. If these potential problems are highlighted and recognized, then there are likely to be increased chances of a success transition.

When choosing Kanban, there could there be some resistance to change. Employees are also likely to openly reject a proposed change especially because things are already running smoothly in their teams. This can be rectified by undertaking some sensitisation, constant follow ups and further elaborating on the advantages. To enhance its implementation, it is advisable that every team member is advised of his/her obligations in the new regime as well as how the new system will meet the needs of project thus facilitating compliance and transition.

One might also get some issues due to lack of understanding on the guidelines of the system. Kanban is not just organizing work on a whiteboard, but it teaches about constant improvement, flow and WIP. It is project integration management approach at its best.

If the Kanban board is used incorrectly, problems can arise.

There must be a proper and concurrent effort by every member in the board to make sure that the status in the board reflects the current position of the project. These are concept elements to rationalise work and facilitate the movement of exchange between individual and social activity and artefacts. If the changes are implemented from time to time and when the effectiveness has been evaluated then the board can be an asset to the entire team.

Occasionally there is an issue in managing too many kanban which in turn lead to some problems and constraints to development.

The amount of work actively being done at any given time should be kept to a minimum to maintain a continuous flow and prevent system overload.

Those teams which shall have observed the above prospective problems and acted on the same shall be in a position to effectively adopt the Kanban project management.

E-Commerce Trends

E-commerce is a rapidly developing field which remains open to further insights and, consequently, new approaches. Future changes in this sector are likely to impact on the ways companies work.

Computerization of most business sectors and the increasing application of the internet to make purchases online means that e-commerce will be determined by artificial intelligence and machine learning. These innovations enable organizations to state future trends, tailor the encounters, and study consumer practices.

Proactive customer service will enhance through AI-based chatbots in the communication process. And when it comes to machine learning, it will impact inventory management which is so crucial to e-commerce firms.

The use of augmented reality (AR) and virtual reality (VR) will offer greater diversification to online shopping services offered in e-commerce platforms. The use of AR can help the customers to visualize objects in their environment hence increase confidence in their purchases.

Kanban is important in regard to these trends. Such methodology can facilitate operation procedures of the e-commerce organisations. For example, the use of a digital Kanban board could be, the immediate notification of inventory levels. The problem of stock out or over stocking can also be eradicated. For that, it can facilitate the order management starting from the pickup point up to delivery thus making it easy to track and manage.

Also, this strategy plays a role in eliminating customer service grievances because; This makes it possible for teams to work out which tasks should be addressed and responded to as quickly as possible through the representation of the status of each of the requests. Customer satisfaction is possible which is vital in e-business environment that is highly competitive.

Finally, they pointed out that there are more possibilities still to be discovered for e-commerce in the future. It will remain a work in progress, being responsive to changes in the customers’ habits and development of new technologies.

Kanban Implementation Resources

There are many resources available to help businesses implement Kanban. These include:

• Books: David J. Anderson and David R. Radice’s, “Kanban: Successful Evolutionary Change for Your Technology Business” and Mike Burrough’s,”Inside Kanban” are two sources touching this subject matter.

• Online courses. Among other sources, there is available a wide range of web platforms that provide Kanban courses, for instance, Coursera, Udemy, and LinkedIn Learning.

• Consulting services. As many consulting firms focus on lean and agile approaches including Kanban you may find firms that can help you to implement Kanban system.

• Software Tools: This makes it possible for organizations to find many digital tools that they can use when implementing Kanban. Seven of them are Rememo, Trello, Jira, Asana, and so on.

Bear in mind that Kanban is a continuous improvement model, and thus sessions cannot be run completely successfully without constant learning. Some of the ideas and resources mentioned here may be useful as the basis for developing an effective training program – modify it as desired according to the needs of a specific business and possible obstacles.

Final thoughts

It means that the idea of implementing the Kanban in e-com transactions can lead to an effective organization of activities, satisfaction of the customers, and, therefore, higher revenues. Although it may require a certain amount of work, it is highly rewarding activity for any organization who aims at enhancing its order processing and fulfilling activity.

Kanban simply changes business processes and leads organizations into more effective, better serving, and successful organizations.