Setting up a web store and selling online is relatively straightforward. However, picking, preparing, moving the product, and working with parcel carriers to ensure shipments are delivered on time, is an entirely different challenge. There are a couple of key ways to render a warehouse eCommerce-ready.
First, consider what new challenges and consequences the traditional warehouse might face?
A Surge in Your Warehouse Activity
Before eCommerce, retailers typically stored all units of a particular item in a single picking location in pallet-size quantities. Now, in order to fulfill both eCommerce and brick-and-mortar orders, warehouse staff may have to pick items by the pallet, case, or single item—which means that multiple distinct storage locations for each item are required to keep the warehouse organized. In addition to storage, processing direct-to-consumer orders also requires more time. Shipping a pallet to a retailer may be one distinct workflow. Shipping a pallet’s worth of individual items requires many more distinct tasks. As a result, the biggest strategy questions that many fulfillment centers are asking themselves right now surround the dilemma of how to pick.
Inventory Control & Management
Accurate inventory data is essential and requires extra care to ensure customers receive the correct item. The margin for error that exists between warehouse and retailer doesn’t apply with the on-line customer. Product Profiling is vital when making your warehouse eCommerce-ready, and capturing the measurements and sizing of an on-line product are new challenges for the warehouse.
Warehouse Information & Management Systems
Many warehouses don’t have proper visibility tools and information systems support (WMS), thus making the handling of split-case order fulfillment more difficult than it really needs to be. When prioritizing the on-line customers, expedited orders put a strain on the warehouse operation.
Managing Reverse Logistics
High percentages of returns are common among retailers. In some cases they’ll up to 22% in returns. Returns management is a complicated process which each retailer must manage next to their core warehousing and distribution operations, often within the same facilities and at great expense. When unforeseen circumstances occur, product recalls put a further strain on supply chains, consuming significant resources and storage space. Each return represents a value, and needs to be stored accordingly until it has been quality checked, destroyed or processed for new sales, returned to the supplier or otherwise managed in accordance to the respective retailers’ return policies.
Now, let’s discuss what we believe are the key points that will assist an existing warehouse operation moving into a multichannel approach.
Consider the Transition Strategy
Perform an assessment of your current operation to develop a short, medium, and long term plan of action for your warehouse readiness to handle the on-line channel challenges. Avoid ‘big bang’ implementation if at all possible. Ensure your solution can effectively support the transition; the logistics profiles during transition are often vastly different from the end state.
Redesign / Retrofit Your Storage Solution
Seeing the need for more space, some companies are building additional warehouse facilities to accommodate direct-to-consumer distribution. Others are investing in retrofitting their existing facilities to accommodate omni-channel fulfillment.
Companies will ultimately make this decision by evaluating the percentage of orders that they ship to brick-and-mortar stores, and the percentage they ship directly to consumers as they account for future trends. To stay ready for change, it’s important to not only have facilities that can accommodate different types of fulfillment, but also to implement technology and infrastructure that can adapt. Elastic walls that can be easily moved around and reconfigured are one of the best tools a warehouse operator can deploy. Setting up flow racking and conveyor belts to accommodate both pallets and individual parcels can help a warehouse continue to run smoothly.
Improve Your Information System (IS)
Fulfillment of B2C (business to consumer) orders requires additional functionality in regards to new interfaces and new operating functions and these are over and above a standard WMS. New eCommerce IS requirements can include a customer delivery address and special customer requests, e.g. gift wrapping, engraving, and paperwork that must accompany the product. The IS must generate consignment orders that can be integrated with the transport contractor’s system and give correct information while supporting traceability. E-Fulfillment activities can also place specific requirements on WMS support of eProcesses on the warehouse floor. This involves the definition or rules for new inventory and picking strategies.
Plan for a Culture Change
Consider and plan for a culture change, especially if automation is new to the operation. Automation typically requires a manufacturing mentality – throwing people at a problem is no longer a solution. Ensure the leaders and workforce understand the automation solution and are trained to use it. Involve the operational teams as early as possible, identify knowledge gaps and recruit where necessary. Every person plays an important role in getting your warehouse eCommerce-ready!
E-Retailing is clearly a growing and important way of doing business. In order for companies to be successful in the new marketplace, they must adopt a new approach to warehousing design and warehousing operations to cost-effectively satisfy the more demanding requirements of the e-Order fulfillment process.