The e-commerce business ideology has transformed the business – customer interface drastically and continues to do so. In the prevailing customer acquisition phase, it is common to see businesses in e-commerce pitch value-based differentiation to attract and lock-in customers for the long run. It has become imperative to identify the buying levers and take appropriate measures to positively influence them with a view to build sustainable leadership and maintain a strong competitive stance.

A detailed study of buying patterns reveals that e-commerce customers make a purchase decision primarily on the basis of Product Pricing, Forward Speed, Order Promise or Reliability, Payment Methods offered and Cancellation Convenience. Forward speed or Order to Delivery lead time being one of the most important differentiating factors, a significant improvement here enables organizations to curb redundancy, introduce new services and enlarge the target market segment, enhance brand image and establish market dominance. It is thus evident that a disruptive innovation in forward movement holds great promise for any e-retail firm providing differentiation and thus a decisive edge over competition.

This paper explores the intricacies of Forward Placement of inventory in an e-commerce supply chain with a focus on catering to the increasing demands of express delivery. Supply Chain as a science has always reiterated on maintaining centralized inventory and repeatedly stated the sub-optimality arising out of fragmenting this inventory pool. This framework bases its decision to adopt a decentralized model by harnessing the available intelligence and thus bridging the information asymmetry on customer behavior and demand patterns.

The framework has been designed with an intent to allow for such a fundamental modification in a supply chain which exists in the highly volatile e-commerce industry. Multiple levers effecting the decision including order profiling (OP), order clusters (OC), order consolidation (OC), order delivery window (ODW),viable minimum delivery time (VMDT), inventory capacity (IC), inventory days on hand (IDOH), service premium potential (SPP) have been analyzed to efficiently implement the framework.

This framework has been applied to assess the situation and identify locations for a leading Indian ecommerce company offering multiple categories with plethora of unique SKUs. This has enabled the company to introduce a new service offering of 4 hour delivery promise, thus introducing a potential to earn premium from customers and cater to new market segments interested in high speed deliveries. Furthermore, this paper discusses a potential design modification to the supply chain to introduce forward placed inventory (FPI) in an e-commerce setup. A brief insight has also been provided to the areas where it can be further optimized and deployed across various industries.