eCommerce Warehousing & Supply Chain Efficiency

Warehouses are vital to eCommerce success, acting as hubs for efficient inventory control and fulfilment strategies. They balance supply and demand, optimise storage management, and enhance supply chain efficiency. Effective eCommerce warehousing is crucial for meeting customer expectations and contributing to overall business success.

This article explores key warehousing functions, including master data creation, receiving goods, product identification, and storage. Components are categorised into inbound and outbound logistics, laying the foundation for understanding warehouses' key role in the eCommerce supply chain efficiency.

In any warehouse, the key functions of receiving goods, identification, and storage form the backbone of warehouse optimisation. The initial step in this process is the creation of master data, a comprehensive collection of essential details like weight, dimensions, product images, and SKUs. This meticulous step ensures that the subsequent goods reception process is both accurate and seamless.

Once the master data is in place, incoming shipments are anticipated based on vendor announcements. However, challenges often arise during this stage, such as discrepancies in the type or quantity of delivered items. This highlights the significance of having robust systems in place to handle and address these issues swiftly.

Upon the arrival of goods, a swift unloading process begins, officially marking the reception phase. This involves a quick confirmation without unpacking and inspecting the actual goods. The subsequent identification process is the key point, done by human storekeepers who meticulously match physical items with the system. This attention to detail at the identification stage lays the foundation for the smooth progression of warehouse operations, avoiding major problems in the future.

The Put Away process is initiated with successful identification, wherein items are methodically placed on shelves for storage. This step contributes to warehouse optimisation. It is also accompanied by merchandising efforts in the sales area, improving the overall presentation of the products to customers.

The core functions of receiving, identifying, and storing goods are integral to warehouse operations, emphasising the need for accurate master data creation and a meticulous identification process. These foundational processes play a key role in ensuring not just supply chain efficiency but also customer satisfaction. Next, let’s delve into the complex dynamics of Inbound and Outbound logistics in eCommerce warehousing.

In the previous section, we covered the Inbound process, which involves everything from creating master data to storing items in the warehouse for future shipping. This process includes receiving, identifying, and storing goods for upcoming shipments. Two crucial aspects of the Inbound process are meticulous record-keeping and the use of waybills.

Every movement or change in goods' status must be recorded, ensuring accurate goods tracking and preventing fulfilment issues. A systematic approach ensures efficiency, especially when integrated with the entire team. The waybill, a document reflecting received goods and quantities, is essential for the final settlement with the supplier.

Moving to the Outbound process, designed for shipping products out of the warehouse, encompasses storage management and fulfilment strategies. This process operates on outbound orders, categorised into customer orders - small commodity orders, and B2B orders - bulk orders, returns, or inter-warehouse movements.

Many companies adopt the First-In-First-Out (FIFO) approach to optimise storage and picking. Proper identification is crucial for FIFO to work efficiently, involving serial numbers, lots, batches, and expiration dates. While lots and expiration dates are common in groceries, batches are used in the automotive industry, and serial numbers are prevalent in electronics.

The critical part of the Outbound process involves building an assembly route for efficient movement between items. So, in order to go from one item to another, staff must skip the maximum number of unnecessary items in the minimum number of steps. A clear layout ensures a directed and streamlined process, significantly increasing warehouse optimisation. Placing popular items near the entrance and less frequent items in the back further improves picking efficiency.

Fulfilment strategies are the two main assembly strategies: Sequential Picking and Wave Picking. Sequential Picking assembles goods on one floor with one picker per order, which is suitable for smaller warehouses. In contrast, Wave Picking, either Sequential or Parallel, groups orders based on specific criteria, optimising the picking process in larger warehouses.

Parallel Picking within Wave Picking helps avoid chaos and time wastage by grouping orders for larger warehouses. This method ensures efficient consolidation and sorting of items before they are packed and shipped.

The final steps in the Outbound process include Loading, where packed items are checked for the correct gates, and Dispatch, where products are shipped away and the system registers the shipment. A waybill is generated for the destination warehouse at this stage.

So, following the Inbound and Outbound logistics significantly enhances warehouse storage management and fulfilment strategies. Following these storage, shipping and receiving processes ensures accurate record-keeping, optimal storage, and efficient order processing.

Technology integration into eCommerce warehousing has become a transformative force, revolutionising traditional practices and optimising supply chain efficiency. You’ll learn some of the technologies used in warehouse automation and examples to give you a better idea of their impact on eCommerce logistics.

Warehouse Management Systems (WMS)
Warehouse Management Systems (WMS) are at the forefront of logistics technology innovations, providing a comprehensive platform to optimise and automate warehouse processes. WMS utilises real-time data to improve inventory control, order processing, and warehouse productivity. It serves as a digital nerve centre, performing precise tasks such as order picking, packing, and replenishment.

For example, distribution centres for an eCommerce giant implement a WMS that integrates with their online platform. This WMS not only has goods tracking but also automates the order fulfilment process. When a customer places an order, the WMS allocates the items, generates picking lists, and optimises the most efficient route for order pickers to follow, improving overall order accuracy and processing time.

Automation and Robotics
The introduction of automation and robotics has changed the physical aspects of warehouse operations. Automated Guided Vehicles (AGVs) and robotic arms work seamlessly together to optimise tasks such as load handling, order fulfilment, and even complex sorting processes. This not only speeds up the pace of work, but also minimises errors, reducing costs and increasing overall supply chain efficiency.

A good example would be an online retailer investing in automated storage systems featuring AGVs and robotic arms. AGVs transport goods within the warehouse, picking items from storage to dedicated packing stations. Robotic arms handle the packing process, ensuring products are securely packaged. This one of the logistics solutions significantly speeds up order fulfilment, minimises errors in the packing process, and reduces labour costs.

Internet of Things (IoT)
The Internet of Things (IoT) has ushered in the logistics technology innovations. Smart sensors and devices collect and transmit data in real-time, enabling insight into all aspects of warehouse operations. This connectivity enables proactive decision-making, predictive maintenance, and increased visibility across the supply chain.

For instance, a logistics company integrates IoT devices throughout its warehouse infrastructure. Smart sensors placed on shelves monitor inventory levels in real-time. As items are moved, the IoT system updates the central database, providing instant visibility into stock levels. Additionally, IoT-enabled devices track the condition of perishable goods, sending alerts when temperature thresholds are exceeded, ensuring the quality of products during storage and transit.

Data Analytics and Predictive Insights
Data analytics plays a crucial role in eCommerce warehousing. Companies can gain useful insights by utilising the vast amounts of data generated in the warehouse. Predictive analytics, in particular, can anticipate trends, demand patterns, and potential operational bottlenecks, allowing for early adjustments to optimise warehouse performance.

As an illustration, a large eCommerce warehouse utilises data analytics to optimise its stocking strategy. By analysing historical sales data, seasonal trends, and customer preferences, the warehouse predicts which products will experience increased demand. This proactive approach allows the warehouse to improve inventory control accordingly, reducing the risk of stockouts during peak periods and optimising warehouse space utilisation.

These are great technologies to use in any warehouse; pick one depending on your specific goals.

eCommerce warehousing is inherently challenging, and obstacles can often disrupt operations. Let's take a look at some of the most common challenges:

Identifying and managing excess inventory is a common challenge in warehouses. Excess inventory can be classified into two types: identified and unidentified. Identified excess inventory occurs when an unexpected surplus of a known product arrives. In such cases, immediate communication with the supplier is crucial to arrange for the pickup or relocation of the surplus items. On the other hand, dealing with unidentified excess stock is more complex. If an item cannot be identified, legal restrictions prevent it from being stored. Such items are promptly notified to the supplier, who must retrieve them within a limited time frame to avoid destruction.

Prioritising tasks in warehousing presents a significant challenge. There are two primary categories of prioritisation: urgent and non-urgent, which may vary across companies. For instance, if a company faces issues such as a malfunctioning label printer, outbound stock discrepancies, and broken label scanners, the correct sequence of prioritisation involves fixing the label printer first. This is crucial for unblocking shipments of already committed orders. Subsequently, addressing stock discrepancies ensures accurate balance on the site. Lastly, fixing label scanners, while important for the inbound process, is deemed less urgent than other warehouse functions.

The prioritisation strategy is contingent on various factors, including the type of business, the range of products, and the warehouse's nature. Some companies may place heightened importance on prioritising the inbound process due to their specific operational requirements.

Effectively managing staff is a common challenge in many warehouses, impacting overall operational efficiency. To address this challenge:

• Companies should avoid unnecessary interference with ongoing tasks, allowing staff to complete their assignments.
• Simplicity in operations is essential for effective staff management. Warehouse systems should be designed so that even children understand.
• Speed is crucial in operations, emphasising the need for quick execution of tasks.

By following these principles, companies can significantly enhance the efficiency of their eCommerce warehousing. These principles contribute to streamlined processes and improved overall warehouse performance.

Warehousing plays a crucial role in most businesses and demands serious consideration in the handling of storing, shipping and receiving processes. A poorly designed process can trigger a cascade of issues, all of which can be mitigated through a comprehensive understanding of core warehouse functions, the Inbound and Outbound logistics, the use of relevant logistics technology innovations, and the awareness of common challenges. The suitability of these strategies depends on various factors.

To enhance the effectiveness of your warehouse, mitigate costs associated with shipping errors, and boost sales through internal process optimisation, consider reaching out to us. Connect with us today and witness the optimisation of your warehouse tomorrow!