We don’t need to tell you how critical warehousing and shipping are to your eCommerce business. Timeliness and accuracy of orders affect customer satisfaction and therefore retention, and set the rate of returns and by proxy profitability; efficiency in putaway and storage affects the amount of square footage you need to lease, insure, maintain, and staff.
None of this can happen if your warehouse is not optimised. Our team has identified these critical steps to ensure this, maximising your efficiency and profits.
Warehouse slotting is the process of identifying the most appropriate storage location for each product in your inventory. Slotting optimisation allows warehouse workers to pick orders faster and, consequently, helps to enable next-day or same-day delivery, which is a popular option in e-commerce. This type of e-commerce warehouse layout also ensures you’re making the most out of your warehouse storage space.
It’s possible to optimise warehouses manually, but this process requires the analysis of a great deal of data - at least a full year’s worth, including seasonality and projected inventory growth. We recommend investing in an optimisation system to save your valuable time for working on other important tasks.
Many warehouses make the mistake of calculating only the storage space that they need, without adequately taking into account other warehouse operations; remember to account for the following, as well as the staff needed to operate them:
Warehouse equipment might be essential depending on your products, volume, and business model. Generally speaking though, most eCommerce warehouses and fulfillment centers have the same basic goals: maximise space, increase efficiency in the flow of goods, improve visibility, and do it all in a way that’s safe for staff and for your goods.
There are four basic kinds of warehouse equipment, based on warehouse functions:
Storage equipment encompasses everything from large warehouse shelves and racks to small bins and drawers.
Material handling equipment is a broad category that includes transport equipment, unit load equipment, storage equipment, and positioning equipment.
This includes anything needed to assemble, package, and label orders to prepare them for shipping.
In today’s modern warehouse, these pieces of inventory management equipment deserve a category of their own. Barcoding equipment includes barcode readers, naturally, as well as printers, labels, and accompanying eCommerce software.
When you consider that eCommerce has already made the browsing and buying process much more efficient through automation, it makes sense to continue streamlining throughout the process to product picking and shipping.
Automation does not have to be a complete change to your warehouse - the best automation centers around small investments in single-task machines:
These machines have a break-even point that occurs in months, as opposed to years. Thus, investing in this kind of equipment piecemeal from the beginning can incrementally improve ROI.
Are you worried about the optimal pick path? That’s the first problem - a WMS would be far more effective at doing this than you!
Before the rise of e-commerce, warehouses and distribution centers were used to processing bulk orders. Now, they are dealing with smaller orders and even individual items, requiring a more efficient picking strategy.
Good warehouse management software is best at picking optimised pick paths for a warehouse, because it is based on mathematical logarithms. Here are some best practices to abide by, no matter if you are creating pick paths by hand or automation:
Cluster-picking is an easy method to start with if you want to optimise your warehouse for e-commerce. It’s a cost-efficient strategy that focuses on the picking of items instead of orders. In this method, a single picker collects multiple orders at one time and places them in separate totes to avoid errors. Cluster-picking decreases the travel time of workers, which accelerates the picking process and offers the potential to meet tighter delivery times.
At this stage, it’s time to start drawing up some warehouse policies and guidelines for your workers. Proper pick paths are just the start - you need to consider safety procedures, workflow, and quality control/order accuracy.
Establish policies now for quality control and order accuracy, because these will form the core of your employee training.
Note: much of this will need to be determined by warehouse policies, such as how often do pick waves occur; how much inventory needs to make it to forward staging, and how often; when should equipment be put away, and where.
Try to see the workflow from your employees’ point of view, then maximise their energy and minimise confusion by employing a WMS to streamline this process.
Training is not just about imparting knowledge: it is about giving your employees key skills they will need to work quickly and efficiently. Resources spent on training will pay for themselves over time in speed, efficiency, fewer mistakes, and a safer work environment.
By optimising labour and being able to use data to anticipate seasonal fluctuations, you can ensure that you are caught neither short-handed or over-staffed.
If you aren’t joining them, you are being beaten by them! An excellent WMS will remove a lot of the donkey work by embracing automation and streamlining systems by integrating with ERPs and workflows.
“With the increase in eCommerce and multi-channel fulfillment, many companies have realised that their existing system may fit their brick-and-mortar fulfillment environment, where the lowest level of picking is normally a case, but it’s a different set of WMS needs when you are doing many individual item picks for e-commerce.”Dwight Klappich, Research Vice President for Gartner
There are many offerings in this category, at many different price points, and with different capabilities, but here are some basics you should definitely look for:
Staying committed to a legacy WMS in your warehouse can result in bottlenecks and delays in fulfilling a high volume of orders. This is because old WMS solutions have limited capabilities, including the inability to utilise modern warehouse technologies.
To optimise your warehouse for e-commerce, it is strongly recommended to upgrade to an advanced WMS system that is equipped to work well with modern technologies such as mobile devices, dimensioners, and others. Leveraging new technologies will help you optimise warehouse processes and enable you to take on some of the key challenges associated with e-commerce.
The integration allows diverse business systems to share data seamlessly, opening up a number of opportunities for cutting costs, increasing efficiency, and reducing errors.
This is a great indicator for optimisation, and having the right warehouse metrics and KPIs (Key Performance Indicators) will help to identify bottlenecks, plan out warehouse operations, and measure overall customer satisfaction.
There are many KPIs you should consider tracking for optimal warehouse management, and a good warehouse management solution should be able to gather all of these easily.
In the past, many companies didn’t have much interest in optimising their reverse logistics process, which made it difficult for them to efficiently and affordably manage returns in today’s e-commerce age. Providing a hassle-free return experience has become crucial in earning customer satisfaction. Hence, it’s imperative to optimise the reverse logistics process.
New products, new technologies, and new business models mean that what worked a few years ago might not be optimal today.
As your customer evolves, it is a critical mistake to not only lag behind, but to anticipate their needs and preemptively adapt accordingly.
Having a flexible WMS that can integrate and offer options for future solutions like machine learning and automation is no longer on the wishlist, but an essential in order to cope with sudden changes in demand and interface with new technologies as they arise to maximise your workflow.