Is your eCommerce warehouse set up correctly? Are you one of many businesses that set up your operation before your growing pains resulted in additional staffing and space constraints, and now simply continuing to do what you do is impacting what you need to achieve? Are you struggling to deliver a high service level and if not now – does your future growth suggest that you still will?
You will have the expectation that your business is efficient determined in part by customer satisfaction. Order speed and accuracy, efficient storage and putaway is paramount and is key in driving customer satisfaction.
More often than not your eCommerce operation will be a legacy but is it set up for growth? If not, your bottom line could soon suffer. The following dynamics should be considered in your planning.
Fundamentals
Irrelevant of the size of your operation – planning is key! eCommerce warehouses are beset by high standards and demands by customers. It is therefore essential that space planning, equipment, product flows, and operating procedures are well thought-out.
Fundamentals to consider:
- How much inventory are you to stock?
- What are the range of SKU’s?
- Is the inventory perishable / date-sensitive?
- Is it high value (requiring further considerations)?
- Is seasonality a factor?
- What is your projected growth for, say, the next 2-5 years?
- How much inventory are you selling now and in the projected growth?
- Determine what you need to deliver the above, space, equipment, resources and systems.
Where To Start
Storage
eCommerce is a rapidly evolving world. Determining your storage requirements is a starting point.
- Size the storage requirements.
- What is the best storage medium?
- What is the best use of the storage cube?
Consider your storage footprint in relation to your receiving and despatch areas.
The storage products need to be moved efficiently and safely.
Picking
Classify your SKU’s by rate of sales, i.e. A = fast movers, B = medium movers and C = slow movers. Determining the above will then lead to:
- Optimising the location of the A, B, C’s
- Sizing the ‘slot’ for each category
- Enabling your employees to pick more orders more quickly, supporting next day or same day shipment.
Processing
With your storage design and pick face optimised, processing areas are as important to alleviate any bottlenecks.
- Have you enough receiving and depatch doors?
- Have you allowed for enough processing space for checking received goods prior to putaway?
- Consider a dedicated returns area.
- Do you need to account for any value-added activities or kitting?
- Similarly for despatch, allow enough space at peak for shipment.
- While planning these areas, remember to allow for space to grow into as your growth and throughput increases.
Equipment
Identifying the right equipment and location all adds to the optimisation of your operation.
Storage
Depending on the size of your operation, determining the right storage media to optimise the cube it is important to consider:
- Accessibility to product.
- Densification of the storage.
- Part-mentalisation of storage racks into shelving.
- Dedicated shelving units
Ultimately achieving ‘best use of storage cube’.
Materials Handling Equipment
All product requires moving – transported from receiving through to dispatch.
- Identify the best equipment at each stage through the process
- Consider as your operation grows the suitability to the equipment to still deliver its tasks.
Shipping and Packing Equipment
Make sure that the layout is planned to manage the order flow and that the equipment is suitable for:
- Order consolidation
- Packaging
- Labeling
Material Flows
Planning the most expedient and efficient material flows is important and has a significant impact on productivity.
- There should be logical and simple flow of goods through the operation.
- Minimise any crossed paths.
- As importantly, segregate employees from free moving equipment.
Systems
Warehouse Management System (WMS)
Ideally you will already be running a WMS. If you are reengineering your warehouse, ensure that the functionality is capable for any new activities/processes that will need to be implemented to make the operation more efficient.
The Future
In designing your eCommerce operation, the initial physical planning should have one eye on the future demands of the business to future proof the expensive cost of having to physically move any fixed equipment. The operation should have factored in the growth requirements for all the specific areas.
With the right data and tools, the here and now can tell you a lot of what you need to allow for going forward and that is understanding your Key Performance Indicators (KPI’s). At the very least, determine:
- What is the frequency of your stock turnover?
- On receipt of order, what is the total time required to fulfill the order?
- Cost per package to transport the package.
- Rate of Returns - understand the reason for the return as these may reflect on problems within the operation from receiving, picking and quality control, for example.
An Autonomous And Robotic Future
Your eCommerce warehouse should identify repetitive tasks which could then be considered – if not now – but looking forward – to be automated. Such tasks and equipment to consider are:
- Barcode scanners – increase picking accuracy.
- Laser dimension and weight scanner – shipping efficiency is increased by the accurate computing of packages.
- Conveyors – removes the need for fork trucks to pick and deposit, reducing worker workload.
- Autonomous Guided Vehicles (AGV’s) – Moving unit loads from A to B on defined paths.
- Robotics – Also known as cobots, they can pick and place items on conveyor belts and sort goods based on their size and dimensions.
- Other Robotics
Reverse Logistics
Customer expectations on return is high and places additional demands on the operation.
There are two aspects: the processing of the “paperwork”, updating the customer’s account etc. and the processing of the goods returned. If they are saleable, i.e. not damaged or defective, they need to be back on the stockfile so they are available to be sold, and somewhere accessible. This may or may not be the exact pickface location for that product. It depends on demand and quantity of returns received.
Facility
Optimising your business to a seamless flexible operation is a win and sets realistic and budgeted OPEX costs. The additional benefit of having the most efficient use of space and height in the facility means you are not overpaying in rent, insurance and maintenance.
Wherever you are in your journey to eWarehouse optimisation, LPC can support you to visualise and determine the optimum solution, from traditional static storage solutions to more dynamic systems, autonomous vehicles and robotics.
Image Source: Canva
