Why Warehouse Management Is So Important
Getting packages processed and delivered to customers on time is one of a retailer’s key competencies. Get this step wrong, and you will ruin the customer experience. The consequences could be downright catastrophic.
Naturally, every retailer has a stake in warehouse management and how it impacts the end consumer’s shopping experience. This guide will show you the critical areas you need to pay attention to
in warehouse management.
Warehouse Management Impacts Order Delivery
Warehouse management involves the planning and orchestration of all aspects of a retailer’s warehouse. The core disciplines of warehouse management include:
- Warehouse automation - working with digital systems to capture data and organize inventory
- Reception of new stock - processing the arrival of new stock
- Picking - Selection of items to match incoming orders
- Packing and packaging - Combining items for shipment
- Analytics and tracking - Metrics-based evaluation and warehouse optimization
Inefficient Warehousing Costs You Money
In a study, UPS found that
77% of consumers were willing to pay for expedited shipping. In addition, 63% reported that delivery speed was an important factor for their shopping decisions.
For retailers, this means that slow or inefficient warehouse processes could cost your business money. Not only are customers willing to look elsewhere if you process orders too slowly, but there are hidden costs that come with inefficiency. For example, holding stock for too long imposes additional storage costs, which raises your overall operating costs.
Picking A Warehouse Management System
Working with an optimized warehouse management system (WMS) is a key part of efficient warehouse management.
Warehouse management systems allow you to manage stock levels, shipping, purchase orders, and other elements of your warehouse. You should choose one that is easy to use and that fits the dynamics of your retail business.
Leading Warehouse Management Systems
There are many contenders in the WMS market. This is good news for retailers as it makes it easier to find a system that suits your exact circumstances.
Here are some of the leaders in this market:
- Zoho Inventory
- Oracle Warehouse Management
- Softeon WMS
- Infor Supply Chain Management
Prioritize Ease Of Use For Employees
Ease of use should be a top priority when selecting your warehouse management system. If your WMS is too difficult to use, employees will likely resist it and will not use all of its capabilities. This, in turn, will lower your return on investment (ROI) from implementing the WMS.
As a central system for your retail business, a WMS system tends to come with significant technology lock-in effects. If possible, spend ample time testing out several alternatives before selecting one.
New Stock Reception Guidelines
The frontline of your warehouse management workflow is the new stock reception area. Any inefficiencies here will have knock on effects on the rest of your operations.
For example, if items are misplaced here, search and recovery will take longer, delaying storage or order shipping. These guidelines will help you streamline the reception of new stock.
Assign Workers To Order Receiving
If no one is available to receive new stock, stock may end up getting misplaced or damaged. This imposes unnecessary costs on your business.
To ensure all new stock is processed promptly and correctly, have a member of staff assigned to this task.
To prevent potential damage to stock while it awaits proper storage, make sure there is enough space in the reception area.
Record And Digitize Stock Reception
A good part of stock reception is making sure that all new stock is booked properly. Due to the inaccuracies inherent in manual systems, it’s good practice to digitize as much of this process as you can.
Scanning systems that log and record stock reception will create accurate records that are available to other parts of your warehouse management.
Picking And Packing Strategies
Move into any retail warehouse and you will likely find that one class of activity takes up most of the time. What is that one activity? Picking and packing is the core activity of a warehouse operation.
However, if you are not careful, this is where the bulk of your inefficiencies will occur. Excess time spent picking and packing means that orders move too slowly through your system. Delays and customer dissatisfaction are the undesirable results.
Optimize Your Warehouse Layout
There is good reason to be intentional about your warehouse layout. According to InboundLogistics
, about 60% of pickers’ time is spent just walking around a warehouse.
You can reduce this wasted time by optimizing your warehouse layout so that pickers get to products faster.
One strategy is to place the most frequently ordered items in sections of your warehouse that are closest to the packing area. Slower moving inventory can be located further in the back of the warehouse.
In addition, consider using conveyors and other mobility systems to make inventory move faster through the warehouse.
Order Picking And Packing Options
For smaller operations, order picking is straightforward because picking takes so little time initially. As your warehouse grows, you might want to consider adopting advanced picking strategies.
Zone picking and batch picking allow pickers to focus on picking in a specific area, with orders packed in a central packing area. These strategies raise the efficiency of very large warehouses but come with potentially higher labor costs.
Metrics You Need To Know
Using metrics and analytics will help
you improve the efficiency of your warehouse. Metrics like order lead time and picking accuracy indicate how good of a job your warehouse is doing.
By measuring and tracking these metrics, you will spot problems before they become detrimental. This, in turn, will help your store in its mission to please customers.
Order Lead Time Affects Customer Satisfaction
Order lead time is a metric that measures the length of time it takes, on average, for your customers to receive their orders. The lower your order lead time, the happier your customers are likely to be.
Picking accuracy, another important metric, measures the percentage of orders picked accurately before shipping. Accurate picking helps you ship items out more quickly to your customers.
Inefficiency Adds To Warehousing Costs
Other warehouse metrics like receiving efficiency and days on hand indicate the overall efficiency of warehouse operations. Inefficiency will impose costs. For example, receiving efficiency shows you how quickly new inventory is ready to be used for order fulfillment. The longer it takes, the more time is wasted handling inventory.
Likewise, the days on hand metric shows you how long inventory sits idle in your warehouse. Inefficiency here adds to storage costs and ties up cash flow unnecessarily.
Improving Your Warehouse Management
Warehouse management is vitally important for retailers because it affects your ability to deliver orders on time. At a different level, it also affects your operating costs. This means that having an efficient warehouse is much in your interest as a retailer as it can have a huge impact on the business.
For optimal warehousing, use automated warehouse management and adopt strategies that will improve the overall efficiency of your warehouse.