Meeting customer expectations is a tall order for e-commerce retailers in 2020. Consumers want it all: fast and convenient shipping, real-time visibility of their order, the best prices, easy returns, and continuous communication from order through delivery. A recent report from the National Retail Federation found that today’s consumers increasingly prioritize convenience when it comes to purchases, and expect retailers to continue to offer innovative ways to save them time and effort.
In addition to meeting high customer demands, companies must also grapple with industry challenges. With labor costs on the rise, climbing warehouse rents cutting into profits, and a growing number of products and points of connectivity to manage, savvy e-commerce players recognize the value of optimizing warehouse processes to thrive.
Here are five tips to help your organization upgrade warehouse operations to pick, pack and ship like the top players in the game.
1. Automate Connectivity
While expanding fulfillment options by connecting to a diverse range of e-commerce marketplaces is a solid plan for driving sales, a multi-marketplace, multi-tactic strategy can quickly become an operational headache. The complexity of multiple systems and processes increases the risk of errors, added labor, points-of-failure, and differing pick, pack and ship processes.
Automation is the answer. With a warehouse solution that automates connectivity across all marketplaces and standardizes warehouse processes (i.e., receiving, picking, packing, shipping, and carrier evaluation and selection) for all sales channels, top retailers are leveraging fulfillment into a competitive advantage by driving down costs and improving the customer experience.
2. Adopt a Barcode-driven Strategy
Barcodes and scanners are a staple in today’s warehouse, used for everything from receipt, put-away, replenishment and returns to picking, packing, shipping and cycle counts. By eliminating error-prone and time-consuming manual, paper-based processes, barcode-based warehouse systems heighten accuracy, boost productivity, and decrease costs.
Top players in the e-commerce world are getting creative with barcode technology to drive sales and improve customer service. For example, barcode scans can activate background processes to inform a customer that an item has been picked and is on its way. The same scan can also automatically update sales channels with stock availability.
By leveraging the full functionality of barcode technology, savvy retailers and warehouse operators know what orders have been placed, as well as what product is moving in and out of their doors. Real-time visibility into order and inventory status, coupled with better communication with sales channels and customers, can translate into increased sales and loyal customers.
3. Drive Cash Flow with Cross-docking
With retailers in pursuit of the “perfect order,” cross-docking has grown in popularity across industry supply chains as a way of expediting shipments to customers and curtailing costs. Cross-docking eliminates the costly hassle of storing items in a warehouse between modes of transit, while increasing the speed at which items are unloaded, scanned and loaded onto their next mode of transit.
Automation is the key to optimizing cross-docking practices to keep product moving and revenue flowing. To stay at the top their game, leading companies are implementing automated cross-docking systems to increase the number of products that can be processed, maximize their ability to screen for product quality, and reduce costs associated with labor, material handling and warehouse storage.
4. Embrace Chaos in the Warehouse
While at first pass it may seem logical to group similar items in the warehouse—organized by product type or in a defined order—these practices may not be the most efficient and economical use of space. For example, organizing strictly by product type does not necessarily mean that an item fits best in a given space; similarly, ordered space does not mean that popular items are placed within easy reach or as part of an optimized picking path.
Top e-commerce players have adopted a “chaotic storage” model to optimize warehouse operations. Although “chaotic storage” may sound counterintuitive, think of it as organized confusion. This model is an organic shelving system that lacks permanently defined storage areas. Each product is assigned a barcode that tracks where it is stored in the warehouse. Although items may not appear to be neatly grouped or structured, free space can be filled more quickly and used more effectively to increase operational flexibility, accuracy and cost savings.
To maximize the benefits of chaotic storage, forward-thinking retailers employ warehouse management solutions (WMS) to optimize picking paths to guide pickers to retrieve items from the correct location, saving time and money. Used with a barcode-driven approach, this ensures automated checks and balances to minimize picking errors and improve order handling accuracy. In addition, new and seasonal workers can become productive more quickly since there is no need to memorize the warehouse layout.
5. Automate Carrier Selection
Shipping can be a major cost for online retailers and selecting the right service level and carrier to minimize those costs—and ensure happy customers—is often complex and confusing. UPS Ground or FedEx Express Saver? USPS Priority Mail Express or FedEx 2Day? The optimal answer could change for every shipment based on multiple factors, such as item size and weight, customer location, and required delivery window.
Given the pace and volume of orders, manual rate comparison is simply not effective. Top players automate carrier selection with shipping technology that rate-shops multiple carriers and evaluates service levels, determining the optimal time-in-transit versus cost scenario, to select the most efficient, cost-effective carrier for each shipment.
Parting Thoughts
E-commerce warehouses are complex operations with many moving parts and functions happening simultaneously. In this environment, it can be challenging to know where to focus productivity improvements and determine where optimization efforts will pay off. By focusing on optimizing the elements of the fulfillment process that impact the customer directly—notably the pick, pack and ship processes—retailers can gain a competitive advantage and provide a long-term path for growth.
Johannes Panzer is head of industry solutions, e-commerce for Descartes, a provider of cloud-based logistics and supply chain solutions.