Whether it’s Lebron James shooting free throws or Lady Gaga singing scales or Warren Buffett doing his own taxes, the lesson is the same - the great ones always practice the fundamentals.
The speed at which eCommerce moves might make it seem like a waste of precious time to focus on the basics, however few things are more important. They form the foundation upon which to build all of your business operations and ignoring them will only lead to instability.
Fortunately, best practices are not bound by qualifiers, and many of the same tools and methods being used by the largest enterprises can be employed by small businesses as well.
At SkuNexus, helping eCommerce businesses optimize their warehouse operations and order fulfillment services is a big part of what we do. Warehouse management is an area full of time-honored techniques that have been augmented by technological updates for the modern business environment.
Here, let’s take a look at some best practices for small business fulfillment warehouses.
1. Practice Safety First
The safety of your employees comes before anything else and this is exemplary of a well-run warehouse. By establishing procedures and protocols for cleaning up spills, servicing lighting, and anything else that may help prevent a workplace accident, you can foster an environment based on safety. Accidents will happen, but taking the steps to minimize their probability is always the best course of action.
2. Prioritize Organization
With products arriving at loading docks, customer orders coming in from different sales channels, and busy employees in motion, the importance of organization in an eCommerce warehouse cannot be overstated. An organized warehouse is not only easier to navigate, but also contributes significantly to maintaining a safe working environment.
Maintain Clean Workspaces
Rigorous adherence to a schedule of regular cleaning of the warehouse space is a crucial part of maintaining organization, and this extends to machinery, as well. The warehouse floor must be uncluttered and easily accessible to forklifts and other moving vehicles. Additionally, inventory items should be stored in bins or totes to reduce dirt/dust/contamination and to maximize storage space.
Maintaining a clean workspace works on both physical and psychological levels. While a clean, uncluttered warehouse means obstacles to efficiency (and potential hazards) have been removed, it also serves to improve employee morale, pride, and confidence.
Post Signs & Provide Maps
Clear, easy-to-read/understand signage is an excellent tool for minimizing confusion on the warehouse floor. These can convey any information you desire and can be especially useful for new employees.
By the same token, providing employees with maps can help them navigate until they become familiar with the warehouse layout.
Use Barcode Labels & Scanning
Extensive use of barcode labels & scanners provides merchants with enormous accuracy, organization, and control. From the moment an item is scanned at receiving until it ships out the door, this system can be used to track its location in real time.
“Location” can be anywhere, including in transit (cart, tote) between fixed stations (storage rack, packing, shipping). By placing a scannable barcode label on any of these, a merchant can always know where any given item is. This method is invaluable both for organization within the warehouse as well as inventory management.
Conduct Cycle Counts
Cycle counting is a valuable method of inventory auditing that allows specific items to be counted on a rotating basis and is widely considered more favorable than a full physical inventory count. Not only does cycle counting minimize disruption to fulfillment operations and save valuable time, but it also maximizes inventory accuracy.
The inventory data generated from cycle counting can be distributed throughout a merchant’s business. This data allows purchasers to gain insights on what they need to order, the finance department to budget accordingly, marketers to see what is and isn't selling, and customers to know exactly what you have to offer.
3. Optimize Warehouse Layout
Each eCommerce merchant may develop and apply custom models for organizing its warehouse, however certain best practices can provide structure for this process. The fundamental goal is maximum efficiency for both goods and employees as they make their way through the warehouse.
Everything involved in the entire fulfillment process will both inform the warehouse layout and be impacted by it. As a result, merchants must consider all aspects of their operations in order to optimize the space available.
Reduce Travel Time Whenever Possible
To reduce warehouse the amount of time employees spend between tasks, all station locations (receiving, packing, shipping) and routes between them (putaway, picking) should be assessed for maximum efficiency. This may involve eliminating long rows of warehouse racks in favor of cross-aisles to help decrease distances.
Decisions re: where items are stored can increase efficiency as well. For example, most popular items (high-velocity SKUs) can be stored nearest the shipping department, and items often purchased together should be stored accordingly.
Consider Space/Storage Requirements & Methods
Regardless of the size of the business, every merchant is working with a limited number of square feet and must make the most of the available space.
The types and sizes of inventory can influence how wide aisles should be, the configuration of shelves, etc. Vertical space cannot be ignored, either. Maximizing a warehouse often means going higher.
Research different types of shelving and storage, as well. Plenty of options exist and finding the right system to work with your inventory can produce significant dividends in space optimization and operational efficiency.
In addition, any inventory with special consideration must be accommodated and grouped accordingly. For example, all items requiring refrigeration or ultra-low moisture, regardless of their association, would be stored in the same area of the warehouse.
When it comes to the reorganization of an existing warehouse, current design inefficiencies must be identified and addressed, and even the most optimized processes should be reviewed periodically.
Ultimately, just as every business is unique, so too should be every warehouse. The layout needs to be the result of careful thought and planning that incorporate as many different variables as possible.
Direct Putaway and Automate Pick/Pack/Ship
These warehouse operations present significant opportunities for maximizing efficiency and productivity, and a warehouse management system (WMS) can play a major role.
With directed putaway, the WMS informs employees on exactly where to store goods immediately upon receiving them. This elimination of guesswork saves valuable time, eliminates the need for staging, and reduces confusion.
The automation of pick/pack/ship involves the WMS providing information, as needed, to tightly control the processes.
When customer orders are routed to the warehouse, a pick list is generated by the WMS. This list will contain the items to be picked and their specific locations (aisle/shelf/bin). In a “directed picking” model, the picker will also receive instructions for the most efficient route to take through the warehouse.
After all items have been picked, scanned, brought to packing, and scanned again, an order pack list is generated. Detailed information re: correct parcel size(s), packing materials, and any special instructions will be provided to the packer. Once the parcel is packed, a shipping label is affixed and the order is ready to ship.
4. Implement a Warehouse Management System (WMS)
The tools provided by a powerful warehouse management software system (WMS) will have a profound impact on any merchant’s backend operations. From directed putaway to providing insights on space optimization to commanding pick/pack/ship, a WMS provides accuracy, direction, and control across the breadth of operations. It is an essential tool for any online retailer handling its eCommerce fulfillment in-house.
Warehouses present a myriad of opportunities for online retailers to improve their business operations, and we have merely scratched the surface here. SkuNexus will devote considerable time and go into great depth on a host of other related subjects in the weeks and months to follow.
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