Top tips for improving the efficiency of your warehouse
With the growth of ecommerce continuing apace, warehouse efficiencies are one of the key battlegrounds for the outsourced retail fulfilment sector.
Customer expectations are rising
In 2005, John Lewis forecast that its online sales would eventually grow to be equivalent to that of an average-sized John Lewis store. In 2015, the year it celebrated its 150th anniversary, gross sales at John Lewis hit £4.4bn, and online accounted for 30% of that - almost £1.5bn. That’s roughly equal to 10 John Lewis stores.
It’s not just online sales that are going sky-high. Customer expectations are on a similar trajectory; if they can do their shopping while still in bed, it’s not surprising they’re going to expect delivery and collection to fit in with their demands, too. A bad delivery experience can drive a customer away from a retailer permanently and, as such, the pressures on retailers and their fulfilment partners alike are greater now than ever before.
What’s more, people are impatient online - they won’t stick around if they’re not happy. If they can’t find the convenient delivery option they want, shoppers will often simply abandon their order and shop elsewhere. Keeping up with customer expectations is where leaders in retail fulfilment stand out.
Is your warehouse efficient enough to cope?
While a convenient buying experience is great for shoppers, it can put a strain on your warehouse. Now’s the time to assess the key systems you have in place to manage fulfilment, otherwise you risk losing ground - and therefore customers - to your competitors.
It’s hard to overstate the importance of stock control when it comes to fulfilment. If you’re holding stock, processing orders and making deliveries on behalf of several clients, there are likely to be different delivery needs and expectations for each retailer and each SKU, as well as a range of customer-friendly collection and delivery choices to support. You don’t need an over-active imagination to see the potential for chaos if you’re not consistently on top of things.
Consider, if you will, Argos, which prides itself on having a complete end-to-end view of all the stock within its network. Warehouse efficiencies are fundamental to this kind of operational success; imagine trying to keep track of Argos’s 20,000+ SKUs, across hundreds of stores without a robust warehouse system. It couldn’t be done.
Returns is another area where a joined-up view of data and systems can mean the difference between fulfilment success and frustration.
Retailers risk damaging customer relationships, sometimes permanently. Plus they will lose margin if they aren’t able to resell the returned item quickly and efficiently. This presents an opportunity for fulfilment providers to deliver an excellent returns management service for their retail clients through the effective use of warehouse management software. Whether it’s accurate recording of the return, automatic stock updates, efficient put-away, or timely customer communications, fulfilment providers can add value and a competitive edge for retailers through efficient returns management.
Pick, Pack and Despatch
One of the most labour intensive elements of fulfilment has always been the picking and packing that takes places in a warehouse. While robots that can augment, or even replace, the human touch are on the horizon, for now you must manage your people as efficiently and effectively as possible.
Now is the time to do more with less. But that will require an investment in processes, technology and systems to make your staff more productive. That might mean voice-controlled picking and packing systems in the warehouse, or handheld scanners, or automation of routine tasks, or a combination of all those things. Or it might be simplifying processes to ensure better use of data, elimination of waste, and doing away with duplication of tasks like data entry between separate systems.
Top Tips for Improving the Efficiency of Your Warehouse
1) Simplify your processes: eliminate unnecessary touch points
If your business has evolved from being a traditional logistics provider into a multi-channel fulfilment company, it’s likely you’ve added processes and systems along the way. Whether it’s an accumulation of new services, or a cumbersome way of adding new customers to your systems, it can be a complicated drain on time, resources, and money.
Action: Identify those tasks and processes that should be repeated because of the way your systems are set up, and draw up a hit-list of things that could be streamlined. It could be product flow, it could be data entry, it could be the way you compile monthly reports: whatever it is, you need to identify it.
2) Data visibility: use data to catch problems and monitor operations
If you want to improve something you first must quantify it. What are the critical metrics and KPIs that affect your business? You need to be able to assess, analyse, and improve upon your productivity and costs at every opportunity, and that requires a fulfilment system that provides a single, clear view of accurate, reliable, real-time information.
Action: Draw up a list of items such as critical cost per parcel, shipment, or product line, and ascertain how time-consuming it is to assess the ongoing profitability of each customer or business unit.
3) Be more flexible: strive for systems that will enable fast service deployment
Picture the scene - you have a great idea for a new service you are confident customers will pay a premium for, but you can’t execute that idea because the systems your business runs on can’t accommodate it. If that’s even remotely familiar you have a problem. Systems should support the business and its objectives, not confine and constrain them.
Action: Evaluate some of the services you wish you could deploy and what it would take from your systems to bring them to fruition, or even if it could be done at all.
- Ever-increasing customer expectations mean efficiency, flexibility and productivity are key to your fulfilment success.
- Robust warehouse systems are essential to accurately and cost-effectively manage everything from stock control to returns.
- Technology can be used to make staff more productive and eliminate inefficiencies - resulting in a smoother operation and happier customers.
See what the future holds for fulfilment and what this means for warehouse management, download, Present and Future of Fulfilment in the UK: Challenges, Solutions and Future Proofing: Part Two