Ever considered how the way you currently manage your warehouse could be costing you money? Outdated processes and procedures lead to reduced productivity and higher costs, but there are several simple changes you can make that will help you save money and improve warehouse efficiency.
Below are eight of the top ways we see B2C fulfillment businesses throwing away money when we undertake initial site visits. If you’re running a B2C e-commerce warehouse that’s despatching more that a couple of hundred orders a day and two or more of these sound familiar to you, perhaps it’s time to consider some changes..
Top warehouse management mistakes – and how to change them
1 – Not using warehouse locations
If you rely on staff knowing where everything is, or having to arrange SKUs in alphabetical order to find them, you’re tying yourself to a really inflexible approach. This is an inefficient use of space and prevents any optimisation of slotting and picking processes. Introducing new products becomes disruptive and training new staff will take far longer than it should.
If SKUs are given a dedicated ‘home’ location in the warehouse every SKU has to be given enough space for the maximum quantity that will ever be present. As it’s very unlikely that all your products will be at this maximum quantity at one time there will be lots of empty space in your racking. This low stock density is not only an expensive use of space, it will also require your staff to walk greater distances than necessary, slowing down all the key warehouse operations.
Every B2C warehouse should have a location numbering scheme that’s intuitive and completely independent of the SKUs the locations might contain. This is probably the most fundamental requirement for introducing a warehouse management system (WMS) and is a prerequisite for all the points below.
2 – Still using paper
Dedicated warehouse handhelds are expensive but the benefits of introducing product barcodes and handhelds far outweighs the cost in most cases. B2C operations generally find that majority of their SKUs are already barcoded when they arrive, but even if you need to add barcodes as part of your receipting process it’s still worth doing.
In many cases it’s not necessary to barcode individual items. Barcoding the outer carton can be a useful approach for those products that don’t already have a manufacturer barcode on each item.
Once your operation is using warehouse locations, product barcodes and handheld scanners it will be possible to know exactly what stock you have at any given time and to know exactly where it’s being held. Perhaps more significantly, mispicks and other errors can be eliminated, even when new staff join your team.
3 – Rekeying data or bouncing between multiple systems
Manually rekeying or cutting and pasting information is slow and can easily lead to errors. This is often done to produce courier labels or CN22 documentation, but it shouldn’t be necessary in any of the day-to-day warehouse operations. Similarly it should be possible to complete all the key warehouse operations from within a single WMS environment.
Processes that require users to log-on to multiple platforms to generate courier labels, update the status of orders when they’ve been despatched or to adjust stock will not scale as your business grows and will allow the possibility of costly manual errors.
4 – Picking one order at a time
The most obvious way to process orders is to start with the oldest one, pick it, take it to a packing bench, pack it and repeat. Although this is the simplest way to process orders, it also requires the picker to walk far farther than necessary and repeatedly visit the same locations to pick single items.
Unless your orders are incredibly uniform a system that requires you to process all your orders the same way is going to be highly inefficient. It’s useful to consider your typical Monday morning orders and think about how you’d subdivide the pool to process them most efficiently. If your current WMS doesn’t allow you to do this then it’s costing you money in wasted time and missed delivery deadlines.
5 – You spend too much time sorting picked items before they’re packed
Grouping orders together will increase the efficiency of your picking process. But if it’s not done carefully it can just move the bottleneck from the picker to the packer, as they’ll have to sort through a mixed tote to find the items they need.
This can be reduced by limiting the number of items picked or picking into subdivided carts. This way, when a cart is presented to the packer the stock’s already sorted by the orders it’s being picked for. The aim should be to spread the workload equally between the pick and pack operations so that orders flow through both processes at roughly the same rate.
6 – Not picking your best selling products or product combinations efficiently
In some environments a handful of products are responsible for a significant proportion of orders. If these products or product combinations are not identified and processed separately you might be missing an opportunity to make significant savings.
The 80/20 rule might apply to a few of your most popular products, it may be determined by product promotions, or it may change day-to-day as a result of factors that can’t be planned for.
So you need an order processing platform that allows you to identify the orders for your best selling products and handle them together.
7 – You have a large picking face, but your stock’s too concentrated
If you have a picking face that’s spread over more than a few aisles, and contains a large range of SKUs, it makes sense to spread the stock around. Amazon does it.
Make sure your WMS allows you to control the ‘slotting’ logic that determines where SKUs are put in the picking face. At its most basic it should ensure that each of your most popular products are spread around so they’re held in every aisle. This will dramatically increase the proportion of picks that can be completed within a single aisle.
8 – You don’t know where the time’s going and what it’s costing you
If your users are working in a paper-based warehouse it can be hard to get an accurate picture of how much time is spent in each of your main processes. You need to know what a realistic man hour cost is for your operation and how many man hours a week are spent in each of the main warehouse processes. When you do it becomes possible to ensure the costs associated with improving your warehouse efficiency are justified.
Improving your warehouse efficiency
By making some or all of the changes we highlight above you’ll be able to run a far more productive, efficient B2C ecommerce warehouse. Addressing any of the problems described above will usually involve some costs, however the benefits should far outweigh the original outlay.
If you tick some – or even all – of the boxes above, why not give us a call at Realtime Despatch to see how we can help.
Our team of multi-skilled professionals has a wealth of experience in the world of warehouse management and can offer consultancy services to help you develop a more productive warehouse operation. Our own OrderFlow platform provides a scalable enterprise WMS that can take your warehouse operations far beyond the fundamentals outlined above.
Why not give us a call on 01249 750564 or drop an email to email@example.com to find out more?