Wednesday, January 11 2017
By Adam Robinson, Director of Marketing & Digital Marketing Consultant at Cerasis
There is nothing quite like the ease of ordering things online. The holidays are around the corner, and millions of Americans will turn to their phones, computers and tablets to get the gifts they need. Unfortunately, millions more will still go to brick-and-mortar stores to find those special items, and the push toward online and omnichannel ordering will continue grow, which is why it is increasingly important to invest in eCommerce Warehousing.
In your organization, the ability to adapt to the changes in demand of your direct consumers and business-to-business (B2B) partners will strain even last year’s technologies. However, if you can leverage these “best practices,” you can create an eCommerce warehousing solution ideal for both holiday and year-round scalability and growth.
1. Embrace “Chaotic” eCommerce Warehousing. Chaotic storage and eCommerce warehousing is a means of storing products developed by Amazon. Chaotic storage does not follow any logical process, explains Larry Alton of Entrepreneur.com. Instead, it focuses on using any available shelf space for incoming storage, and the location of the items are logged into the warehouse management system (WMS). While it seems illogical, it does reduce time spent in trying to find new, ideal places for products.
2. Consider On-Demand Warehousing. More on-demand services are being offered online than ever before. From Airbnb to Uber, including Netflix and a host of other services, outsourcing exactly what you need has become a core function of modernity, explains Amitabh Sinha of Supply Chain 24/7. The same concept is also being applied to outsourcing complete or partial warehousing needs on an as-needed basis.
3. Target Two-Day Shipping. Major online and big-box retailers, including Amazon, Target and Walmart, are targeting two-day delivery times, if not same day shipping or pickup. Therefore, all smaller eCommerce warehouse solutions need to strive toward this same goal. Otherwise, consumers will go to your competitors.
4. Combine Traditional and eCommerce Warehouse Locations. E-Commerce warehouses do not necessarily require a different location or warehouse. In fact, up to 70 percent of companies are combining traditional retail, B2B and eCommerce warehousing operations under one roof, explains Chris Cunnane of Logistics Viewpoints. However, different sections of the facility may be used for specific eCommerce or traditional fulfillment purposes.
5. Build Touch-Plan Strategies For Different Order Types. Smaller orders should have fewer touch points. However, large orders of the same item should also have minimal touch points. These facts imply a touch-point strategy should be in place for different types of orders placed, including eCommerce orders.
For example, single-item orders should only have one touch point, but multi-item orders for a store should have at least two touch points. An indicator or alert label should be used to help pickers, packers and loaders identify these shipments easily.
6. Integrate WMS With Other All Order Fulfillment Systems. The warehouse is only part of the product cycle. All existing warehouse, procurement and logistics systems should operate within the same omniscient system. This transportation management system (TMS) is key to reducing delays and keeping the entire supply chain flowing properly.
7. Use Technology to Boost Training and Mobility. Training and mobility have become synonymous with “new hire.” New employees need to be able to complete training almost from anywhere and in real time. Cloud-based computing and personalized training modules can help new hires learn as they begin working, reducing overhead costs and delays during peak seasons, asserts Eric Lamphier of Multi-Channel Merchant.
8. Use Batch Pick to Carts. Warehouses had grown accustomed to picking orders individually, but the demand created by eCommerce requires faster picking of many different orders. Consequently, warehouses must create a strategy for picking different types of orders faster, such as zone pick-and-pass or multi-order pick-to-tote. Ultimately, this helps get more accomplished sooner. Of course, mobile technology, such as radio frequency scanners, can help ensure all picks are accurate by verifying the items’ specifications against orders automatically.
9. Implement Adaptable Pack Zones or Stations. Rigidity in warehousing is incompatible with eCommerce. All plans and strategies need to adapt to real-time data regarding demand fluctuations, forecasts and changes in how consumers are ordering. Rather than devoting additional resources to the construction of new warehouses for peak seasons, existing areas can be converted to pack zones or stations, allowing pickers to complete the order-packing process faster, promoting faster delivery and fewer touch points.
10. Integrate Your eCommerce System With Compliance Requirements. The U.S. and much of the world is hypervigilant in the wake of numerous terrorist attacks, attacks of police and increased violence. It stands to reason that compliance requirements, such as the EDI 856 Advanced Shipping Notice, will continue to become more important. For example, the required information could easily expand to include details that are not mandated as of now. While you need to pull this information throughout the day, it should be an automated process. In fact, these details should be compiled and reported from within your warehouse management system (WMS), which reduces the amount of time required in processing thousands, if not tens of thousands, of orders.
11. Manage Returns Quickly and Effectively. Returns, not simply a nuance for shippers; they are critical to providing consumers with peace of mind while shopping online. As explained by Carl Marin of Advantage Business Media, large-scale online retailers, including Amazon and Wal-Mart, are serving consumers with unparalleled return options, making any possible returns easier and virtually free to consumers. Unfortunately, consumers are far less likely to complete an online purchase if return policies are non-existent or too expensive, and many consumers will simply forgo purchasing your products if it can be obtained with a returns’ guarantee from another eCommerce solution. In other words, shippers need to be prepared to take on the costs of free return shipping, assistance when printing shipping labels, and processing returns as they come in.
12. Proactively Pull Orders as They Come In. E-Commerce warehouses are processing more orders than ever before. As a result, a single eCommerce warehouse may actually be responsible for processing groceries, fresh fruits and vegetables, beauty supplies, apparel and practically any other type of product. Shippers need to proactively pull orders as they come in, but the key to making this practice successful is prioritizing order picking to meet the demands of the consumers. According to the following graphic, created by the Ivey Business Journal, prioritizing can be broken down by type:
13. Manage All Order Types Under One Roof. Historically, order channels were split among different distribution centers. Orders for retail spaces came from one center. Meanwhile, orders processed online were left exclusively in another center. Yet, the separation was even more apparent as small package shippers operated almost independently of large-scale shippers using less-than-truckload (LTL) and full truckload (FT). However, the unyielding push toward cheaper products, low shipping costs and faster delivery is making it harder for shippers to operate independently of one another.
In this space, the role of using a dedicated transportation management system (TMS), which includes a WMS, has become vital to success. A TMS combines the perks of working independently with the benefits of working together, and shippers can combine orders from different channels and of different modes into one environment, reducing unnecessary delays and costs along the way, reports Roberto Michel of Logistics Management.
14. Use Metrics to Track Progress and Order Fulfillment Processes. The endless flow of incoming orders via eCommerce actually reflects one part of the multichannel supply chain. In other words, an eCommerce order may be a final order by a retailer when a customer placed an order in the physical store. Ultimately, the role of eCommerce stretches beyond purely eCommerce order and transportation needs. However, shippers should use metrics to track the percentage of orders fulfilled within time requirements, numbers of orders shipped within a given time frame, accuracy in orders picked, packaged and shipped, and labor productivity. Each of these metrics relates directly to consumer promises, such as free two-day shipping.
15. Use Incentives. Having metrics to track progress and productivity is only half of the battle. Your staff members need to have a reason for working more efficiently than the fear of not being employed. Furthermore, threatening the employment and financial security of your staff will only breed hostility. Instead, you should implement an incentive-based program to encourage all staff members to work together and increase progress and productivity. This increases collaboration, which can also be leveraged to increase collaboration across other parts of the supply chain.
16. Optimize Transportation Requirements During Picking. Aside from the labor costs of having staff members physically pick products, the cost of transporting a shipment to the customer represents one of the highest costs in the supply chain. While many small orders may come in, the warehouse should proactively work to reduce the transportation costs by picking and packaging products for intermodal transportation, asserts Art Eldred and Tony Hollis of Supply Chain 24/7. As a result, shippers can reduce transit times and fuel costs, which promotes faster, on-time delivery.
Why Best Practices Are Essential
E-commerce is only going to grow larger in the coming years. Traditional means of warehouse management are obsolescent, and omnichannel orders mean your organization needs to be ready with the right product on-hand, at the right time and ship it almost simultaneously with the customer’s “checkout.” Ultimately, these 16 best practices are essential to fulfilling your orders and being successful in the next wave of omnichannel, eCommerce options for customers and brick-and-mortar stores alike.
BIO: Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness - all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.