9 Awesome Ways to Tweak Your Warehouse System

Warehouse management is as important as sales in any retail business. But common issues such as inventory inaccuracies, poor space utilization, not keeping safety stock avoidable & error-prone manual processes can cause major workflow slowdowns. Before you adopt new systems and practices, ponder over the reasons why do you need them:

• Lower warehouse cost
• Increase sales
• Avoid overstocking or understocking
• To calculate safety stock
• Improve speed and efficiency of processes
• Or simply find alternatives to warehousing

Whatever it could be, smart warehousing is almost always intended to drive up profit margins and to keep prices competitive – both of which ultimately help retain current customers and attract new ones.

Well, here are these awesome and highly practical ideas that can help largely help you in tweaking your warehouse system for a successful retail business:

1: Apply the Best Assortment Strategy

Remember: Piling high can never assure more sales

Sales can NEVER be increased by doubling SKUs. A retailer needs to find the right balance of variety to the customer while maintaining bottom line profitability for your retail business. Here’s how you can do it:

• It is very important to sort your SKUs into high selling, average selling, and under-performing ones
• Also, make the best combination of short-tail as well as long-tail products
• Arrange stock in your warehouse in the most optimized way – for optimized inward and outward of stock. Remember: Any inward or outward activity should never disrupt your entire warehouse space or functioning
• Constantly monitor data to ensure no item takes up valuable warehouse space for a longer span
• Never fear the short-term loss of dropping under-performing SKUs
• Keep tracking the market response

It is good to realize that you cannot stock something to please everyone. Therefore, be selective and offer fewer styles and maximize sales.

2: Integrate Shipping and Packing Processes

Traditionally, warehouses have distinct packing and shipping stations. In this model, the order is first picked and brought to the packing station, and then it’s sent to the shipping station from where it’s shipped. There is no reason why these two tasks can’t be simplified and integrated into one. Why not integrate with shipping agents who can directly pick packed parcels from the warehouse itself.

To keep a track of your outgoing or incoming inventory, an efficient cloud-based inventory management software can be of great help. Not only such a software can provide integration with your preferred shipping partner, but it also helps to create picklists, print shipping labels and track inventory on the go.

The benefits of integrating shipping and packing processes are many:

• Less labor used
• Fulfillment process is streamlined
• Optimal use of warehouse space, such that you can handle more volume in given space

3: Implement Barcode Inventory System. Now.

While barcodes have been in use for a long time in shipping and manifesting systems, many businesses still don’t use barcodes for warehouse management. Well, that’s not great, because the barcode inventory system is the most basic automation your warehouse deserves in place – to reduce costs and increase control of your operations.

Barcode let you track the ‘what’, ‘who’ and ‘when’ within your warehouse walls. And your potential savings can be:

• A decrease in administrative costs due to reduced need for manual data-entry functions
• Fewer errors thanks to improved inventory tracking
• Inventory accuracy improves
• Ability to track employee performance to increase productivity
• Better and efficient scheduling of warehouse activities

Stock movement can be tracked simply by scanning the barcode during an array of activities such as receiving, putaway, replenishment, picking, packing, shipping, returns, cycle counts, as well as labor handling.

Warehouse management – all in one scan, as simple as that!

4: Introduce Cycle Counting

Cycle counting is an efficient and cost-effective inventory auditing practice where a small subset of inventory, in a specific location or the warehouse, is counted on a specified day. This is to ensure the accuracy of inventory without having to count entire inventory and the result of which can be used to infer results for total inventory. The cycle count is usually conducted on an ongoing basis, often weekly or monthly, hence is less unsettling than a full physical count which requires shutdown of day-to-day functioning. Fast-moving and more expensive items can typically be counted more often than slower moving and less expensive ones. While daily systems, such as your barcode inventory system, are important for optimized daily operations, cycle counting helps keep everyone in tune with keeping a well-organized warehouse, adding the human element in the process.

5: Use Kanban Inventory Approach – Go Lean!

Adopting a Kanban or lean inventory approach for your warehouse is just as important as it is in manufacturing. The basic premise of a Kanban system is – “stock or produce only what you need, and nothing more”. With this system, you are always aware ‘what – when – how much’ to stock in the warehouse. It takes into account supply Vs demand using sales forecasts as well as the entire order fulfillment process, keeping the stock levels optimized at every stage in the value chain. You can hence avoid any kind of supply disruption or overstocking in the warehouse since there is no incoming of the stock unless & until there is a space for it.

To go lean, all you need is to:

• Purchase and stock as per demand
• Possibly reduce or eliminate safety stocks

• Convince your suppliers to deliver smaller quantities more frequently

6: Outsource Warehousing & Fulfillment to Amazon (FBA)

FBA is the most hassle-free way to run a retail business. If you register your products for FBA (Fulfillment By Amazon) program, you only list and sell products on marketplaces, while your orders are entirely fulfilled by Amazon. Amazon stores your stock in its fulfillment centers, picks & packs your order items, and ships them to your customers. You don’t even need to worry about customer service or returns. And this is not limited for Amazon – you can also use FBA to fulfill orders from multiple marketplaces or selling channels (even your own e-commerce store) under Amazon MCF (Multi-channel Fulfilment program). Amazon becomes your warehouse as well as fulfillment agent – while you can relax and focus on other important aspects of running your business.

Some big benefits of using FBA are:

• No warehouse costs or any other operational hassles
• No customer service costs
• Get better visibility on Amazon
• Get Prime Tag by default – double your sales and expediting 2-day shipping to customers

BigCommerce’s Omnichannel Retail Report found that 80% of buyers ranked shipping cost and speed to be “extremely influential” in where they shopped.

• Improve chances of winning Buy Box
• Get better PPC (Pay per click) advertising deals for Amazon

And many more…

7: Just Dropship and Chill

Dropshipping has proved to be a boon to retailers who don’t want to invest in the stocking, shipping and tracking inventory. It is a retail fulfillment method that allows you to operate without owning a warehouse to store the products you sell or having to ship products to your customers. Instead, you partner up with a dropship supplier who either manufactures or warehouses products, has complete inventory control, and ships it directly to your customers. You actually never see or handle the product; all you need is a laptop and internet connection to keep the track of incoming orders.

How does it work?

• The customer places an order from your online store
• You intimate the supplier about the order, with complete customer and orders
• The dropship supplier packages the item and ships it to the customer directly on your behalf

And why dropshipping?

• It’s cost-effective
• Simply eliminates the complexities of warehouse management

8: Go Bundling

Well, bundling isn’t directly related to warehousing. But it just helps you improve your sales and let inventory move quicker off your shelves, that ultimately improves your warehouse efficiency. Wonder how? The idea is to group two or more products into a single comprehensive package which is then sold at a discounted rate or as an attractive package. Not just consumers enjoy decreased prices, businesses also see a faster movement of inventory off their shelves. As you enter into a new season or unload fresh stock, why let your old product take up valuable warehouse or shelf space when you can bundle it together? Benefits are bright:

• Your customers will perceive the bundle as a value
• And in return, you’ll move product faster than if you sold the items individually

9: Engage Employees for Greater Warehouse Efficiency

A human touch to an all-encompassing omnipresent tech system only makes it better. As the Gallup State of the Global Workplace study implies, companies with engaged workers experience a 22% increase in profitability. Here’s what you can do:

• Create a warehouse management system based on the value of workforce, your largest controllable expense
• Engage your staff. Generate positive team names or titles that reinforce their roles. For example, “The Picking Masters” might feel an increased sense of cohesiveness and pride in their daily work
• Introduce goal setting and rewards system
• Give your employees consistent and honest feedback

With the right motivation, you can create the warehouse of the future, today itself.

Summing it Up!

When deciding how you can optimize warehousing, list all your processes and analyze each one. Determine what part of the operation is really required, and also ask why it is required. Also, examine whether there is a scope of improvement in each part.

Employ the best practices and ideas suitable to your business kind, and as you move forward, constantly evaluate how your productivity and efficiencies are improving.