What is a Warehouse?

What is a Warehouse?

A warehouse is the backbone of any business because this is where a major amount of investment sits. In fact, the warehouse itself is an investment, and therefore one must know in and out of the warehouse and the products kept in the warehouse.

 

So let’s start with the definitions of Warehouse –

 

“A warehouse is a commercial planned place generally used for storage and management of goods in a large proportion.”

 

 

While the above one is a simplistic definition an another more elaborate definition of warehouse describes warehouse as

 

“A facility that provides space, robotic instruments for handling products, storage racks, and a human workforce to manage the incoming goods and outgoing goods. These all things together along with many other small additions make a warehouse that is up and running.”

 

 

Also, if you take the business dictionary’s definition into consideration then it says,

 

“A storage facility within a warehouse management system that is part of a supply chain. The warehouse is located in the most centrally located position to afford a shipping agent the ability to temporarily house shipments for distribution to other warehouse facilities or the final shipping destination.”

 


 

What is Warehousing?

Warehousing is the process of storing inventory in the manner that products are easily traceable in a good condition before they are sent into an order fulfillment cycle or sold or distributed to smaller warehouses or retail brick and mortar stores.

 

Small retailers or startups with fewer funds may have a room or a storeroom as a warehouse, however, large businesses rent big buildings that are designed to store products.

 


 

Warehouse vs. Distribution Center

Though the two terms, Warehouse and Distribution center are considered replaceable, however, they are not. A warehouse is a place where goods are stored whereas a distribution center is a place in which not only the products are stored but also they are introduced into the order fulfillment process.

 


 

What is Warehouse Management?

What is Warehouse Management?

Warehouse Management is about optimizing and controlling the processes of operations and storage of the products in the warehouse right from the moment the inventory enters the facility until it is sold, becomes obsolete, consumed, or moved to another place.

 

On the other hand, a more discrete explanation of warehouse management present in a research paper on Organizing warehouse management available on research gate says,

 

“Analogous to production management, the objective of warehouse management is to efficiently and effectively coordinate all warehouse processes and activities. Warehouse management includes all planning and control procedures to operate the warehouse. Planning and control are concerned with managing the ongoing activities of the operations to satisfy customer demand. The main purpose of planning and control is to ensure that operations run effectively and produce products and services as they should.”

 


 

The 5 Fundamentals of Warehouse Management

Managing the warehouse isn’t a simple task; it needs to be done with proper planning that rests on some solid fundamental points to be focused on. If you manage your warehouse by keeping these basics in mind, you are sure to reap some great results.

 

 

1.  Customer-centric Warehouse Management 4.  Data shows you the path.
2.  Manage your warehouse with a solid workflow and control 5.  Walk with time – Embrace Technology
3.  Create a system that is ready to adapt to the changing circumstances


 

1.  Customer-centric Warehouse Management

 

It’s pretty much evident that not just your marketing strategies but also your warehouse strategies should be how customers want it. They won’t tell you how you should manage your products. Still, their product preferences and purchase behavior will tell you about what type of inventory you should keep in your warehouse in a way that it’s shipped instantly and doesn’t get delayed due to operational errors whenever the order is placed.

 

You have to hit the right balance between your productivity and the management of products according to the customers’ choices.

 

For eg., if you have a combo pack that is being loved by the customers and you are receiving orders at a high rate. Then you will have to streamline warehouse operations in a way that the products in the combo are arranged efficiently and quickly from their warehouse locations to be shipped as soon as possible without any error.

 

You can provide your customers with a better order fulfillment process if you spend your time shaping your warehousing process in a way that benefits them.

 

Moreover, the customer-centric approach will provide a smooth hassle-free return or refund policy and a more transparent shipment tracking system for your customers.

 

 

2.  Manage your warehouse with a solid workflow and control.

 

Knowing what should be done is not as tricky as applying that known knowledge of what should be done. If you strategize a plan of action about some departments, you must ensure that the strategy is executed as perfectly as it can be.

 

To ensure that you need to create proper workflows, processes, rules, and protocols that the warehouse workforce needs to follow so that everybody works in sync and achieves a common goal.

 

 

Above is the general warehouse workflow

 

3.  Create a system that is ready to adapt to the changing circumstances.

 

Well, workflows, protocols, and rules are essential, but at the same time, being able to change the strategies instantly and work in the direction of the improved strategies is also very important.

 

It might happen that suddenly your data shows that the trends are changing, and you need to alter your workflow or alter a portion of it. Then, in that case, the entire team, including the warehouse management system, should be able to switch to the different plan of action with as much as less friction as possible.

 

 

4.  Data shows you the path.

 

Don’t make a decision and then see the data; instead, see the data and then make a decision. It is imperative to let your data show you the path, be it the data on customer behavior or the information on your inventory performance.

 

Even after you have made your decision based on the data, you should always keep your eye on the information/data. Never think that everything will be or is going fine wholly because there will always be one or the other portion that will need improvement. That’s why warehouse management is not a job in which you can relax and let everything run on its own.

 

 

5.  Walk with time – Embrace Technology

 

It’s crucial to keep up with the ever-evolving technology. You never know when the software or a piece of equipment with robotics can be helpful to streamline your warehouse operations or enable you to become an omnichannel e-commerce business.

 

Companies like Nike pay millions of dollars to predictive analytic firm Boston based firm “Celect” to design software that can forecast demands.

 

Software like warehouse and inventory management software, Data accumulation tools, and other robotic instruments can be helpful. Therefore, it’s very much imperative to side with technology for warehouse management. However, you need to be very sure of the technology you implement. It should be useful and be worthy of the money spent on it.

 


 

'Inventory vs. Warehouse' Management

Though both the terms have things in common, there’s a fundamental and operational difference between them.

 

Inventory Management is about managing the stocks in the warehouse and ensuring that the proper flow of stocks is maintained in a supply chain through the order fulfillment process. So, inventory management takes care and controls the purchases made from suppliers and by customers, storing the stocks, and the entire order fulfillment cycle along with deciding the number of products to be kept available for sale.

 

Whereas,

 

Warehouse Management is about managing the whole facility in which the products are stored, including the workforce, the equipment, technology to be used, and the inventory itself. So basically, the job of warehouse management is to create an environment so that the products move fluently through the warehouse.

 


 

Warehousing Roles & Challenges

Warehousing Roles & Challenges

As we know, to run a  warehouse we, of course, would need an entourage of the human workforce so the table below will give you an idea of the type of workers you would need and what type of roles along with the challenges they will fulfill to help you run a healthy warehouse.

 

Designation Roles Challenges
General Labor
  • They generally have to do physical jobs of cleaning, housekeeping, and carry the stock and keep at places where they are instructed.
  • Basically they have to follow the orders of seniors to do menial jobs.
  • Physically demanding jobs that include standing and walking the entire day.
  • Have to be on their toes because in the warehouse anything can come up anytime.
Forklift Driver/Operator
  • Loading and unloading trailers
  • Operate motorized vehicles like all sorts of forklifts to transfer pallets of stocks, materials, and other sorts of supplies to different areas like shipping areas, assembling areas, and storage areas
  • It is helpful to have the skills to operate multiple types of forklifts including counterbalance forklifts, sit down forklifts, stand up forklifts, cherry-pickers, and clamp and reach forklifts
  • Palletize and stage stocks
  • Carry orders from warehouse racks
  • Well operating a motorized machine is in itself a challenge because it requires precision.
  • If you don’t lift the freight efficiently then there’s a chance of products getting imbalanced and fall off
  • The person has to know a bit of mechanics so that he/she can rectify small problems in the machine
Material Handler
  • To effectively handle materials both physically or with the help of motorized equipment like forklifts.
  • Generally, these types of positions need the ability to set up and operate forklifts to move materials around the warehouse racks and into the productions to get the product ready.
  • Computer operating skills, counting, and inventory tracking skills are also crucial so that you can log information about materials and items.
  • Inspect material handling equipment and troubleshoot mechanical issues.
  • Has to have knowledge of computer operations and mechanical equipment both.
  • Physically demanding job because sometimes you need to move material physically as well
Shipping and Receiving Associate
  • Processing inbound and outbound shipments
  • Loading or unloading pallets
  • Pulling & preparing orders
  • Maintaining & organizing shipping, receiving, and storage areas.
  • Collect ordered material from the bins they are kept in
  • Receive and sequence pulling orders
  • Count inventory & inspect material for quality
  • Pack shipping containers or boxes
  • Track orders and document work
  • Multitasking is a challenge in this job because one has to manage many tasks at once.
  • One has to have a knowledge of managing orders and receiving the shipments.
  • Tedious job
Shipping Specialist
  • Be informed about the online retail shopping technologies.
  • Track live orders and fulfill orders and update inventory.
  • Ensure that the orders are packed and prepared for shipment for online retail customers.
  • Maintain stock levels for shipping supplies.
  • Provide reports to management about the errors in the shipments, recalled shipments, returns and replacement shipments and loss of products.
  • Review products for quality control purposes.
  • Reviewing and finalizing shipping costs and reducing unnecessary expenses caused due to errors and inefficiencies in the shipping process.
  • Achieving the completion of order picking in designated shipping time
  • The main challenge is to reduce shipping cost and other expenditures that are caused due to errors
  • Completion of order picking and shipping in time
  • Ensure that the correct orders are shipped without any discrepancies
Loader
  • Assemble the required orders and prepare equipment for delivery before loading
  • Process all incoming materials for receiving and check-in.
  • Receive, displace, and issue all products, selecting appropriate tools to load and unload the freight.
  • Avoiding the errors of assembling the wrong products.
  • Using and managing equipment properly so that the products are loaded or unloaded efficiently
Merchandise Pickup/Receiving Associate
  • Unpacks received merchandise from vendor boxes
  • Remove merchandise from packages to be kept in the warehouse after placing the sensors on goods according to MSS standards.
  • Place merchandise on racks to be taken to the selling floor
  • Assist the Merchandise Team in the placement of merchandise received through shipment
  • Help the Merchandise Team in the movement of fixtures and merchandise for the new products, season changes, and clearance sales.
  • Takes care of damages, transfers, and return to vendor merchandise
  • Help in the replenishment of stocks
  • Help in inventory and markdown processes
  • Responsible for stockroom maintenance, organization, and housekeeping as well
  • Make sure all the processing and receiving processes are completed according to the productivity standards timelines
  • Multitasking is a challenge
  • Understanding the needs of the inventory in the correct way so that you can inform the seniors about the on-ground issues. You lose to notice one fault and that fault can cause huge problems.
  • Checking the received goods discretely because the receiver is the first one to be in contact with the received goods
Receiver
  • Receive shipments after checking them for damages
  • Sort stock for and distribute it in the store
  • Save the invoices sent and received for further references
  • Prepare orders by taking items from the warehouse and get them ready for the delivery.
  • Monitor shelves and keep a record of empty and occupied shelves
  • Be informed about the movements of the merchandise through the store and warehouse.
  • Review, understand, and follow planograms to set up store displays or merchandise arrangements to maximize sales.
  • Raising purchase orders when inventory is low and also purchase packing and shipping supplies when needed
  • Work with suppliers to resolve any shipping issues.
  • Understanding planograms efficiently and distribute the goods accordingly
  • There is a tendency to commit errors in recording the details and making invoices and hence this job needs the person to be attentive.
  • Ability to think quickly and resolve issues
  • Need physical ability to bend and lift heavy boxes
  • Ability to read planograms and set up merchandise and displays accordingly
Warehouse Worker
  • Welcome delivery trucks and receive and track shipments.
  • Help in loading products on trucks with the help of appropriate tools.
  • Track and note exact arrival and shipment times
  • Tag and label and stockpile merchandise according to size, shape, and type.
  • Packing merchandise as per the needs of each product.
  • Assist in preparing orders for shipments and record and manage the damaged or obsolete items
  • Able to operate motorized equipment of warehouse when needed
  • Update data in the warehouse management softwares and other types of softwares
  • Need experience with inventory and logistics software programs and excel sheets
  • And the other challenges are the same as the other employees
Stock Clerk (Stocker)
  • Accept delivered shipments and ensure the quantity is as agreed.
  • Get the merchandise unloaded
  • Get the items marked with identifying codes like prices, barcodes, SKUs and etc.
  • Ensure that stock is shelved appropriately.
  • Ensure the labels are clear and easy to read or identifiable.
  • Help customers fill orders.
  • Manage customers’ mail, web, and phone orders by retrieving the ordered merchandise.
  • Calculate the price of the merchandise.
  • Keep records of sales and manage warehouse management system and other softwares
  • Initiate replenishment and prepare merchandise for shipment.
  • Track and make sure that customers get their products on time
  • Return and replace damaged or missing products.
  • Sometimes able to operate a forklift to lift or place merchandise.
  • Coordinate with sales and marketing people to optimize and manage inventory and orders.
  • Has to manage products and decide about the identification codes that will be most easy to identify
  • Allot the prices decided to each and every product and make sure that the correct prices are allotted
  •  Has to be able to handle customer’s communications with precision so that the correct order is packed and shipped
  • Basically managing the stock with high efficiency so that there are fewer returns and increased perfect order percentages.
Warehouse Supervisor
  • Writing or generating reports about shipments and inventory levels to be shared with warehouse managers
  • Putting labels on goods; maintaining the storage area; and, replenishing work supplies.
  • The major role of a warehouse clerk is to receive, organize, overlook, and maintain the stock available in the warehouse.
  • Packing orders, stocking shelves, unloading deliveries, and managing stock records.
  • Managing the employees and making them work efficiently.
  • And ensuring the warehouse performs at an optimum level.
  • Make sure the strategies designed by the managers and top management are implemented properly.
Warehouse Manager
  • Ensuring that all the tasks of warehouse-like receiving, warehousing, and distribution operations are carried out efficiently by initiating, coordinating, and enforcing strategies, operational protocols, individual policies, and procedures.
  • Ensuring that warehouse management is done in accordance to the federal, state, and local warehousing, material handling, and shipping requirements by studying existing and new legislation; enforcing adherence to requirements; informing and advising the top management on needed actions.
  • Safeguarding warehouse operation by creating and monitoring the warehouse security aspects and protocols.
  • Controlling  inventory levels by conducting physical counts like cycle counts or stock takes and following the reports generated by the warehouse management systems
  • Managing the physical condition of the warehouse by planning, changing and implementing new warehouse layouts
  • Carrying out inspection of equipment
  • Issuing work orders for repair and requisitions for replacement of the faulty equipment.
  • Preparing annual budget to achieve financial objectives by taking expenditures and the approximate changes into account.
  • Monitoring warehouse operations by assigning the tasks to the employees and following up with them
  • Managing the staff of the warehouse by judging their work efficiency and recruiting new employees and training them.
  • Coaching, counseling, and disciplining employees; planning, monitoring, and appraising job results.
  • Upgrading him/herself by constantly learning new strategies and technical skills by attending workshops or reading professional journals.
  • Creating a professional network by participating in professional social circles.
  • Researching new and different technologies coming up in the market that can help in speeding up the warehousing procedures and reduce human errors thus saving money
  • Operate and maintain the warehouse management software to get the best results possible
  • Make strategies based on the reports generated by the warehouse management systems to increase productivity and ensure sufficient inventory levels without the creation of deadstock.

 

  • Coming up with new strategies and new technologies to reduce errors, and ensure that all KPIs are at an optimum level
  • Overlook the performance of employees, allot tasks to the employees and targets to be achieved

 

 


 

Equipment of Warehouse Management

Equipment of Warehouse Management

In modern days, warehouse operation needs a wide array of equipment and if one is intending to have a warehouse of their own then they should know the types of warehouse tools both mechanical and software that would be handy for them. Therefore, the below table will show the types of equipment used in warehouse management.

 


 

Dock Equipment

1.  Dock Boards and Plates

 

The equipment makes it easier and safe for the workers to load and unload the incoming and outgoing stocks.

 

Image Courtesy – Modern material handling

 

 

 

2.  Edge of Docks Levelers

 

Equipment like dock board & plates and the edge of dock levelers help to bridge the gaps between the trucks and loading dock.

 

Image Courtesy – Rice equipment co

 

 

 

3.  Truck Restraints

 

Truck restraints are used to lock the trailers with the docks so that they don’t move while the loading or unloading is done.

 

Image Courtesy – Kelley Dock leveler

 

 

 

4.  Dock Seals and Shelters

 

Dock shelters and seals can protect your warehouse and interior loading dock from outside contaminants, and maintain heating and cooling air inside while allowing full access to truck door height and width.

 

Image Courtesy – Kelley dock leveler

 

 

 

5.  Dock Bumpers

 

Dock bumpers made of rubbers save boats and trucks from any substantial breakage when they collide with docks.

 

Image Courtesy – K&R manufacturing

 

 

 

6.  Yard Ramps

 

Yard ramps, provide a way to load and unload products when the loading dock with the same level is not available. There are also called forklift ramps.

 

Image Courtesy – Copperloy

 

 

 

7.  Wheel chocks

 

Wheel chocks (or chocks) are wedges of sturdy material that are placed closely against a trailer’s wheels to restrict sudden movement while loading or unloading.

 

 

 

 

8.  Dock lifts and levelers

 

Dock leveler lift is a lift that is used to bridge the gap between the trailer and dock when the trailer is not able to reach the dock.

 

Image Courtesy – Kelley dock leveler

 


 

Conveyors

Conveyor belts are a boon in warehouse management because a large number of products can be moved from one location to another thus relieving the warehouse workers from lifting and moving heavy products.

 

Conveyor belts also make the task to be completed in a quicker way.

 

There are several types of conveyors that can be used according to your needs.

 

 

1.  Gravity Roller Conveyor

 

 

Gravity roller conveyor doesn’t require a motor to move materials and they are usually used when the products are to be moved down an inclined plane or the gravity roller are moved with the help of a person.

 

 

2.  Belt Conveyor

 

Belt and plastic belt conveyors are the conveyor belts moved with the help of two motorized pulleys.

 

 

3.  Flexible Conveyors

 

 

Flexible conveyors allow you to change the discharge points by rolling and curving conveyor sections so that it can be fixed anywhere. It’s not a rigid conveyor belt and is very useful in displacing stocks at shipping docks.

 

 

4.  Vertical Conveyors

 

 

Vertical conveyor belts are used to displace stocks from one level to another vertical level.

 

 

5.  Spiral Conveyors

 

 

Spiral conveyor belts are used to transfer the products to different levels without the help of any manual help. They can be installed in places that have less space to accommodate gravity conveyors.

 

 

6.  Pneumatic Conveyors

 

 

Pneumatic conveyors are used for moving bulk solid, dry, or powder. The pneumatic conveyors are operated with the help of pressurized gas.

 

 

7.  Chain Conveyor

 

 

Chain conveyors are used to transferring products with the help of chains used as a conveyor that runs a belt.

 

 

8.  Dust Proof Conveyors

 

 

Dustproof conveyors are the belts that resist dust to decrease friction. They can be used to increase productivity and reduce energy consumption.

 

 

8.  Automotive Conveyors

 

 

Automotive conveyors are programmed motorized conveyors that can weld parts, attach parts with screws, and assemble a vehicle or a machine. These conveyors function on their own once the automation is set.

 


 

Storage Equipment

Correct storing equipment helps the warehouse workers to find the products easily. Bins & totes, shelves, racks, and carousels can be used according to your needs.

 

 

1.  Bins and Totes

 

 

 

2.  Shelves and Racks

 

 

 

3.  Carousels

 

 


 

Lifting Equipment

Well, lifting equipment is a great help to lift, move, and keep stocks around the warehouse.

 

1.  Forklifts

 

 

Forklifts are basically motorized powerful industrial trucks that are used to lift heavy materials in the warehouse.

 

 

2.  Pallet Jacks

 

 

Pallet jacks are also used to pick up and move products. Manual pallet jacks are the most basic form of forklifts. Motorized pallet jacks are also in the market.

 

 

3.  Hand Trucks

 

 

Hand trucks are an L – shaped hand cart.

 

 

4.  Service Carts

 

 

Service carts can be used to move bins and other products.

 

 

4.  Cranes, Hoists, and Monorails

 

 

Cranes, hoists, and monorails are the cranes that can be used to pick and transfer materials in a warehouse.

 

 

5.  Dollies and Castors

 

 


 

Packing Equipment

Packing equipment is used to weigh and pack the stocks as per the industry standards.

 

 

1.  Industrial Scales, Strapping and Banding Equipment

 

 

Equipment like Industrial-scale helps in weighing the products, strapping and banding equipment are used to strap and band the products so that the wheel carts can hold the strapping and move with the products.

 

 

2.  Stretch Wrap Machines

 

 

Stretch wrap machines are used to wrap products instantly without any delay.

 

3.  Packing Tables

 

 

Packing tables as the name suggests are the tables on which the stocks to be wrapped are kept.

 


 

Warehouse Robots

Robots are extensively used in warehouse management of large warehouses of large scale industries.

 

 

1.  Automated Guided Vehicles (AGVs)

 

 

AGVs have been made to replace manual driven forklifts, pallet jacks, etc. They move stocks around the warehouse whenever needed majorly for the purpose of order fulfillment.

 

 

2.  Automated storage and retrieval systems (AS/RS)

 

 

AS/RS is a group of computer-controlled systems that perform storage and retrieval of products with the help of cranes or shuttles on fixed tracks. They in inventory and warehouse management as they are connected to software that keeps the count of the inventory as well.

 

 

3.  Cobots – Collaborative Robots

 

 

Cobots are semi-autonomous robots that help humans in completing various tasks. They come with sensors so that they can identify the obstacle and boxes and operate accordingly. They play a huge role in speeding up the order fulfillment process.

 

 

4.  Articulated Arm Robots

 

 

Articulated arm robots majorly perform picking/packing, receiving/storage, and palletizing of products.

 

 

5.  Goods-to-persons (G2P)

 

 

Goods -to -person robots (G2P) uses the automated storage systems and picks the ordered products and put them in front of the human warehouse workers to carry out the fulfillment process.

 


 

Benefits of Warehouse Management

Benefits of Warehouse Management

Warehouse management, if done efficiently, can bring fortunes for your company. Your warehouse and the stock in it are nothing different from the money that is in your account both need to be supervised proficiently or else you can lose money.

 

1. Don’t have to crib for proper space for stock storage. 4. Increased Profitability
2. You can get the best out of your warehouse employees. 5. Boosted Receiving, picking-packing, order processing speed, and accuracy.
3. Decrease inventory carrying costs and other unnecessary costs.

This section will inform you about the benefits that you will reap if you manage your warehouse meticulously.

 

 

1.  Don’t have to crib for proper space for stock storage.

 

No one can get enough of the storage space and most warehouse managers crib about not having to strike a balance between the adequate stock and finding adequate space for that stock.

 

Warehouse management aims to create a layout of the warehouse that uses the maximum space of the warehouse horizontally and vertically for the placement of the planned stock in a perfect manner.

 

 

2.  You can get the best out of your warehouse employees.

 

Managing warehouse also encloses the fact that you have supervised your warehouse employees’ work as well. Warehouse management ensures that you keep your receivers, material handlers, equipment operators, picking and packing associates and all other stakeholders that are responsible for a warehouse’s smooth operation on their toes by motivating them, allotting tasks, following up on the given tasks, rewarding them for extraordinary work and checking whether they are able to achieve their targets efficiently or not.

 

 

3.  Decrease inventory carrying costs and other unnecessary costs.

 

Another benefit of warehouse management is that it can help you in controlling the inventory carrying cost by managing the stocks by using different techniques such as ABC analysis, FNS technique, Perpetual and periodic inventory management, Just-in-time, FIFO & LIFO, EOQ, Two bin inventory control, Dropshipping and many other.

 

With warehouse management, you increase the speed of the order fulfillment process which will eventually impact the stock-flow speed thus reducing the inventory carrying cost and increasing the profits.

 

Identifying the dead stock and creating a strategy to get rid of it to reduce inventory carrying cost.

 

 

4.  Increased Profitability

 

It is often said that the key to gain that edge over your competitors as far as earning profits are concerned lies in how you manage your warehouse. Your competitor might have more sales than you but if you manage your warehouse proficiently you end up saving a lot of money that you may have otherwise lost in making unnecessary investments and paying for the errors.

 

 

5.  Boosted Receiving, picking-packing, order processing speed, and accuracy.

 

Warehouse management can improve your warehouse operations and order processing speed and accuracy with the use of modern technologies like robots and warehouse automation, inventory and warehouse management softwares, forklifts, conveyors, and other mechanical and technological equipment.

 


 

Types Of Warehouses

Types of Warehouses

Warehouses are large scale storage facilities designed to stack goods efficiently for supply chain purposes. They are classified into the following types based on their application.

 

 

 

1.  Retail Warehouse

 

Retail warehouses are stores dealing in consumer goods that are operated in single-level buildings. Generally, they are limited to 1000 square meter retail spaces. The floor space is mostly majorly allocated to sales with some of the space also being utilized for back office and storage purposes.

 

Click here to learn more about ‘Retail Warehouse’

 

 

2.  Cold Storage

 

It is a facility for storing temperature-sensitive goods used for both edible and non-edible products. Moreover, they are control environments to ensure desired quality and usability with humidity, microorganism prevention mechanisms.

 

 

3.  Distribution & Fulfillment Warehouse

 

A distribution warehouse is an intermediary storage facility where manufacturers unload products for distributors to forward it to retailers. Thus, they provide cushioning to the supply chain. Fulfillment warehouses are third party warehouses used by the e-commerce companies to control costs and manage strategic benefits. The products are lifted from the seller site and stored here until they are dispatched for delivery after processing.

 

Click here to learn more about ‘Distribution & Fulfillment Warehouse’

 

 

4.  Hazmat Warehouse

 

This is an abbreviation for the Hazardous Materials Warehouse which are designed to safely store chemicals and physically dangerous substances. It also includes radioactive and biologically dangerous materials. Special provisions are made because these substances can damage their surrounding environment and put lives at risk. In cases of Hazmat warehouses, compliance is also a primary factor in design. Government agencies are involved to ensure safety at such sites.

 

Compliance regulations regarding layout is also a major parameter as it controls the effective utilization and operational efficiency of the storage facility. Based on the requirements, locations are kept away or near the demand centers. The industries which require such materials often hire 3PL partners if they don’t want to invest in setting up such facilities. Also, non-hazardous and hazardous materials can be stored provided that regulatory norms are met.

 


 

Ideal Warehouse Layout & Location

Ideal Warehouse Layout & Location

The ideal design for any warehouse is dependent on the industry it serves and the local conditions. In cases like the Hazmat warehouses as saw above, laws also govern their layout and construction. Thus, it changes from case to case.

 

 

1.  Warehouse layout and location

 

Since warehouses are used for commercial purposes, their design and infrastructure need to confirm industry standards. The location is usually kept near the demand centers and accessible by transportation facilities.

 

Click here to learn more about ‘Warehouse layout and location’

 

 

2.  Labeling areas of your warehouse

 

Every area inside the warehouse is identified on the basis of the purpose it serves. The number of racks, storage capacity, and accessibility are used for labeling different areas.

 

 

3.  How to organize inventory in your warehouse?

 

Organizing inventory inside the warehouse is a scientific process. A lot of factors like frequency of movement, accessibility, hazards, and weight define the arrangement of inventory. To learn about some really useful organizing inventory ideas in detail click here.

 


 

Type of Warehouse Management

Type of Warehouse Management

Warehouse management is the process of administering and controlling the operations within the warehouse and synchronizing it with the entire supply chain. 

 

Lean warehouse management methods are taking a center stage in the current times due to apparent business advantages as they yield more profit with fewer investments.

 

Click here to explore more about ‘lean warehouse management methods’.

 


 

Warehouse Management Processes

Warehouse Management Processes

All processes involved revolving around the interactions with the inventory. This includes receiving, stacking and dispatching. However, Cross Docking requires a certain difference in the approach. Adequate documentation is done to develop SOPs and reports for future reference.

 

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Receiving & Put Away

A pre-receipt process is issued when the products are received at the warehouse facility. This includes confirmation with the logistics partner regarding the quantity and usability of the received items.  This is followed by proper offloading or cross-docking as required.

 

Click here to explore more.

 


 

Pick Preparations

Once the firm receives an order, the item is picked to fulfill the concerned order. Packaging it according to the item type and mode of transport is done at packing stations. Next, it is shipped through the delivery channel along with appropriate feedback for inventory management. This process also requires integration with logistics partners for smooth functioning.

 

 

1.  Picking Strategies: Types of Picking Processes

 

Picking strategies are oriented towards retrieving the items from different locations inside the warehouse. This includes Discrete, Zone, Wave, and Cluster picking as well as hybrid models formed by combining them.

 

Click here to learn more.

 

 

2.  Order Fulfillment

 

Order fulfillment is done in three ways. Small scale operations are managed with the help of CRM solutions while many enterprises go for 3PL partners to fulfill the orders. However, the best alternative available in the market is the use of an integrated warehouse management system as it is tailored to the organization’s needs.

 

Click here to learn more.

 

 

3.   Packing Stations

 

Once the products are brought for shipping, the items are brought to a central area for packing purposes. The packing stations consist of specialized tables where the workers can pack them. This requires sorting the orders and placing barcodes on the ready to ship packages.

 

Click here to learn more.

 

 

4.  Shipping Station

 

Packing items on the floor isn’t convenient so people started doing it on tables. Later, these tables were modified to provide convenience and better utility. These tables are known as shipping stations. Most of the retailers and warehouses have shipping stations to enhance productivity. These shipping stations are the final stage before the product is handed over to the shipping partners or the courier companies.

 

 

5.  Inventory Control

 

Inventory control is a process of keeping a track of the stock to optimize and maximize one’s warehouse inventory. Inventory control plays a vital role in ensuring that the inventory is tracked with the use of barcode scanners, reorder reports, etc..To manage warehouse proficiently, a warehouse manager needs to know the stock in and out.

 

Read in detail about inventory control.

 


 

Stock Transfers

When the stock is transferred from one location to another inside the warehouse, documentation regarding the assigned personnel, stock, method of transfer, and entries are made accordingly in the inventory management software.

 

Click here to learn more.

 


 

Move Locations

Moving the warehouse location requires proper analysis for both feasibility and overall market condition. This is a business decision and hence a lot of data is collected before evaluation and taking the final call if not required by a state of emergency. Generally, a plan is devised that encompasses all the factors of relocation and defines the role of each stakeholder. This also includes the backup plans for any mishaps and storage of inventory. Additional inventory is stored at alternate sites so as to meet demands in case the warehouse at the other location isn’t ready in the due time.

 


 

Return Merchandise Authorization

When the customers return the product or it is returned because it can’t be delivered, the seller has to verify the reason accordingly. Receiving the returned merchandise is done by following a systematic checking procedure. In case of a claim regarding quality/quantity defect, the concerns are confirmed for further action by the selling platform. Also, the firm shall process the RMA as per documentation laid out by the seller platform to ensure fair judgment for both sides. This is required as the products are either to be sent for repairs or stored for meeting other orders in the future.

 


 

Calculating Warehouse Performance

Calculating Warehouse Performance

From the business point of view, a warehouse is an asset and thus, it is necessary to measure and manage its rate of return. Warehouse performance can be understood as the confirmation of a warehouse to expected financial and operational benchmarks.

 

 

1.  Order Lead Time 4.  Rate of Returns
2.  Carrying Cost of Inventory 5.  Perfect Order Rate
3.  Inventory Turnover 6.  Picking & Shipping per Hour

 

 

1.   Order Lead Time

 

Once the order is placed by your firm, the total time required for it to be fulfilled and reach your premises is known as the order lead time. It is crucial for inventory control because the reorder levels are decided on the basis of the lead time and factor of safety (A multiple of the rate of consumption rate for a given time period).

 

 

2.  Carrying Cost of Inventory

 

For a business, the unsold goods not only hold the capital without generating appreciation, but it also results in the carrying cost. This includes the storage facility’s rent/Morgridge,  utility services, and staff. Hence, this metric gives an idea of how long shall the items stay in the warehouse and the corresponding addition to selling costs.

 

Click here to learn more about ‘Carrying Cost of Inventory’

 

 

3.  Inventory Turnover

 

Inventory turnover ratio, for manufacturing, is the average time for turning raw materials into finished products, and for an online and offline retailer, is the number of times an inventory is sold or purchased. It has a huge impact on a business’s profitability. The rate of inventory turnover is also connected to the efficient use of resources. Higher the turnover, the better is the financial health of the business. To serve this purpose, these metrics give an idea regarding any inefficiencies and also help in the decision-making process.

 

Click here to learn more about ‘Inventory Turnover’

 

 

4.   Rate of Returns

 

In simple words, it is the percentage return on the invested capital by a business. This includes both tangible and intangible investments that are used in the enterprise to create value. It can also be counted individually for each product to get an overview of profitable ventures.

 

 

5.  Perfect Order Rate

 

The number of orders fulfilled without any damage during the process without any mistakes on a timely basis against total orders is known as the perfect order rate. It is a powerful KPI used for the measurement of effectiveness because it focuses on increasing the effective utilization of capital and client satisfaction. It emphasizes the elimination of all shortcomings like shortage of inventory, late processing of orders and dispatches, and faulty handling. This is pivotal to client satisfaction as a higher perfect order rate reflects the meeting of expectations. Higher Perfect Order Rate also improves the profitability of the company. On the other hand, it can also give hints regarding any problem areas in the work process.

 

 

6.  Picking & Shipping per Hour

 

Once the orders are confirmed, the staff at the warehouse has to pick the products from their respective locations. Picking becomes complex in the cases of product bundling and multi-storeyed warehouses. The average time for picking the items can be reduced by collecting the items in batches. Also, the workers shall consider the size of the item for ensuring optimal collection every time they go for fetching. 

 

Shipping time per item can be reduced by coordinating the multi-product consignments during the picking phase. The use of proper shipping stations also increases the average shipping time per order. Higher picking and shipping per hour are indicators of excellent management and higher efficiency. It also helps in meeting peak demands easily.

 


 

Technologies Used in Warehouse Management

Technologies Used in Warehouse Management

With the advent of computerized solutions, new cyber-physical solutions took over the manual methods. They improvise the processes by helping companies exercise greater control over their inventories. Business intelligence is also one of the biggest advantages availed by their use.

 

 

 

1.  Barcodes / GTIN Labels

 

They are used as identification tools that are directly placed on the cartoons/products. They are cheap, effective, and widely used by almost every business today. Barcodes are used at every stage of the supply chain to ensure seamless management.

 

Click here to learn more about ‘Barcodes / GTIN Labels’

 

 

2.  RFID

 

RFID (Radio-frequency Identification) technology is used in case of high speed- high precision operations. RFID microchips can function properly up to a range of 100 meters. While they are comparatively costlier than barcodes, they provide higher reliability and are virtually errorless.

 

 

3.  Warehouse Robotics

 

The use of robots is increasing in order to reduce the number of touches. This reduces the mistakes in handling the inventory. It also curbs proliferation and misplacing by employees while saving a considerable amount of time per transaction.

 

Click here to learn more about ‘Warehouse Robotics’

 

 

4.  Internet of Things

 

As IR 4.0 continues to defy the norms in multiple industries, warehouse owners are taking a step forward by including IoT in their operations. This may radically redefine the way businesses interact with their inventory and the supply chain at large.

 

 


 

Safety Concerns in Warehouse

Safety Concerns in Warehouse

Every other job has a certain amount of risk involved in it and therefore you need to take some safety measures into consideration to keep your employees safe because not only you are bound by law to do that but also as a human and a business owner or manager you need to understand the importance of a skilled worker. 

 

Before talking about the safety procedures you need to go through the type of accidents/safety hazards that your warehouse and the workers working in the warehouse might suffer.

 

  • Accidental fires due to naked electric wires, chemical leakages, or any other inflammable material catching fire. These type of mishaps not only cause fatalities to workers but also has the potential to damage the warehouse significantly.
  • Slips, trips, and falls are a very common type of safety hazards that any worker can suffer while working.
  • Mishaps occurring while using heavy machinery, heavy materials, and equipment are also unfortunately common.
  • Accidents happen at places like docks when forklifts run off the dock, stocks filled in huge boxes fall on employees or any machine or forklifts hit an employee.
  • According to OSHA – Occupational Safety and Health Administration created by the American government on December 29, 1970, and signed by President Nixon under the Occupational safety and health administration act, 100 warehouse employees suffer death and 95,000 injured every year in forklift accidents.
  • Accidental exposure to harmful substances like fatal gases, concentrated acids, or any substance that can be life taking for humans.
  • Improper lifting of heavy materials can cause cramps or irreversible damage to their bodies. They need to be taught the proper way to lift and handle heavy materials.
  • Injuries due to moving parts of heavy machinery like cranes and monorails. The workers need to be educated about the functioning of each type of machine.

 

If you follow the guidelines created by OSHA you can avert the unwanted tragedies both for the workers and your warehouse. Here are a few guidelines that we have quoted from OSHA Pocket Guide.

 

 

For Operating Forklifts

 

  • Train, evaluate, and certify all operators to ensure that they can operate forklifts safely.
  • Follow safe procedures for picking up, putting down, and stacking loads.
  • Drive safely, never exceeding 5 mph, and slow down in congested areas or those with slippery surfaces.
  • Do not allow anyone under 18 years old to operate a forklift.
  • Properly maintain haulage equipment, including tires
  • Before using a forklift, examine it for hazardous conditions which would make it unsafe to operate.
  • Train employees on the hazards associated with the combustion byproducts of forklift operation, such as carbon monoxide.
  • Provide covers and/or guardrails to protect workers from the hazards of open pits, tanks, vats, and ditches.
  • Ensure adequate ventilation either by opened doors/windows or using a ventilation system to provide enough fresh air to keep concentrations of noxious gases from engine exhaust below acceptable limits.
  • Maintain sufficiently safe clearances for aisles and at loading docks or passages where forklifts are used.

 

 

Hazard Communication

 

It refers to the hazards caused by chemicals that can cause irritation, burns, serious physical hazards, and other types of corrosions.

 

  • Make sure that the workers read the MSDS (Material Data Safety Sheets) and pass on the entire information to the other employees about the corrosive and inflammable chemicals
  • Follow instructions on the MSDS for handling chemical products
  • Train employees on the risks of each chemical being stored
  • Provide spill cleanup kits in any area where chemicals are stored
  • Have a written spill control plan
  • Train employees to clean up spills, protect themselves and properly dispose of used materials
  • Provide proper personal protective equipment and enforce its use
  • Store all chemicals safely and securely
  • Store chemicals away from forklift traffic areas

 

 

Docks Safety Guidelines

 

While loading and unloading there can be accidents that can happen as mentioned above. 

 

  • Drive forklifts slowly on docks and dock plates
  • Secure dock plates and check to see if the plate can safely support the load
  • Keep clear of dock edges and never back up forklifts to the dock’s edge
  • Provide visual warnings near dock edges
  • Prohibit “dock jumping” by employees
  • Make sure that dock ladders and stairs meet OSHA specifications

 

 

Electrical Safety

 

Shock circuits & electrical accidents at the charging stations and other areas are the cause of many fatal accidents and fires in the warehouse. Ground fault electrical shock is a frequent electrical hazard. 

 

  • OSHA requires that employers provide ground fault circuit interrupters (GFCIs) for receptacle outlets
  • Warehouses should provide assured equipment grounding conductor programs
  • Prohibit smoking and open flames in and around charging stations
  • Provide adequate ventilation to disperse fumes from gassing batteries
  • Ensure those fire extinguishers are available and fully charged
  • Provide proper personal protective equipment such as rubber gloves and eye and face protection
  • Properly position forklifts and apply brakes before attempting to change or charge batteries; follow required procedures when refueling gas or propane-fueled forklifts
  • Provide conveyors, overhead hoists or equivalent materials handling equipment for servicing batteries
  • Provide an eye washing and safety shower facility for employees exposed to battery acids.

 

 

Wall & Floor Openings and Holes To Avoid Free Falls

 

  • Use fall protection like fall restraints. They are the systems that have equipment like guardrails, standard railing, harness, warning lines, etc.
  • Fall arrest systems like safety nets are other types of these systems that stop the fall.

 

 

Respiratory Protection

 

  • The warehouses that deal with toxic gases or the materials that emit toxic gases need to provide their employees with personal protective equipment (PPE)
  • OSHA strictly regulates employers to provide their employees with proper PPE
  • Many times it’s observed that even though the company provides PPE kits the workers don’t wear them. The use of PPE should be promoted and enforced in facilities where there is a chance of injuries through airborne agents

 

To know more about safety guidelines, download the OSHA Pocket Guide for safety.

 


 

Warehouse Order Fulfillment Strategies

Warehouse Order Fulfillment Strategies

All that’s done in a warehouse is for one ultimate thing, orders, but when orders come many times warehouse managers don’t manage those orders effectively. There are certain order fulfillment strategies that need to be followed while managing the warehouse and failure to implement correct fulfillment process can lead to –

 

  • Damage or loss of the goods
  • Delay in deliveries due to faulty fulfillment process 
  • Wastage of resources and overuse of materials

 

Thus one needs to follow a proper process and if you have read the Warehouse management process in Chapter 3 you might have come across these processes that are vital for the order fulfillment process and if you’ve not gone through chapter 3 click here on

 

  • Order fulfillment 
  • Picking
  • Packing
  • Shipping

 

Proper execution of processes like picking, packing, and shipping will eventually lead to smoother order fulfillment processes.

 


 

Best Practices for Warehouse Management

Best Practices for Warehouse Management

It’s always better to list the best practices for warehouse management so that you can have a list that you need to follow while managing your warehouse.  Here’s a list of some, never to miss best practices.

 

Wave Picking and Cross-docking One item, One SKU
Fewer Touchpoints – Less Time Waste Track your warehouse KPIs
Fast selling products should be easy to reach Warehouse safety needs to be prioritized
Information sharing is must Be prepared for emergencies
Plan picking procedures Allow 360-degree feedback
Use data to manage your supply levels Iterate on operations
Don’t rely on manual input Auditing and surveying of your inventory is must

 

 

 

Wave Picking and Cross-docking

 

If you are a businessman who focuses on ROI then you need to manage your warehouse with lean warehouse management techniques. Cross-docking is the best way to significantly decrease the storage and handling costs and time. 

 

If you have complex shipping systems wave picking can be very helpful. Moreover, if you use an advanced tracking method you can extract amazing benefits with cross-docking and wave picking. 

 

 

Fewer Touchpoints – Less Time Waste

 

Removing unwanted touchpoints makes the order fulfillment process quicker and easier. Keep only those steps that are necessary as unwanted touchpoints can increase wear and tear of the products.

 

 

Fast selling products should be easy to reach

 

Inventory analysis procedures like ABC analysis and FNS analysis will help you to figure out the most popular stocks in the warehouse so that you can keep them in the places which are nearer to the packing station or easy to pick and pack to boost the order fulfillment process.

 

 

Information sharing is must

 

It’s always about how quickly and transparently the information is being shared. In warehouse management, information sharing is crucial with all the stakeholders of the warehouse operations.

 

Using a warehouse management system can help you in sharing data perpetually and give you more visibility of the warehouse, easy to track products in the warehouse, convenient to make calculations as proper information is shared to all the other accounting and other softwares.

 

 

Plan picking procedures

 

Picking procedure should be solid because though it seems to be a no big deal but a solid in place picking strategy with an efficient warehouse management system is needed to boost up the perfect order percentages.

 

 

Use data to manage your supply levels

 

First of all, collect as much data you can about the stock levels, stock flows, and everything else and then capitalizes on it by analyzing the data with the help of advanced inventory and warehouse management software to manage the supply chain. With the help of analysis, you can forecast future demands and know when you need to increase the supplies. 

 

“Forecasting takes this a step further — the same camera data can be fed through machine learning algorithms to teach an intelligent stock management system to predict when a resupply will be needed. Eventually, the theory is, warehouses and distribution centers will effectively run themselves with very little need for human interaction.” — Bernard Marr, How Big Data And Analytics Are Transforming Supply Chain Management, Forbes.

 

 

Don’t rely on manual input

 

Let me correctly put it, don’t completely rely on manual input because manual inputs can be deceptive sometimes. Manual entries can always carry errors with them. Instead, you can always use barcode and RFID scanners to record the incomings, outgoings, and other information. Simple point and click to scan products should also be used to track the inventory flow. 

 

You can connect these tags and scanners to warehouse and inventory management softwares to make sure that everything is updated simultaneously.

 

However, one must never forget that human help is needed when you need to check that the virtual data is in coherence with the on-ground reality.

 

 

One item, One SKU

 

To keep consistency in the SKUs across vendors, suppliers, inventory and sales are a bit tough but using an automated inventory and warehouse management system will help you consolidate the SKUs to reduce manual errors, increase inventory accuracy, and decrease manual verifications.

 

 

Track your warehouse KPIs

 

Key Performance Indicators are the mirror that will always show a true picture of how your warehouse is performing. You need to keep checking your inventory and warehouse KPIs regularly depending on the nature of your business.

 

 

Warehouse safety needs to be prioritized

 

You need to follow all the safety guidelines proposed by OSHA – Occupational safety and health administration. Read our safety concerns for the warehouse section of this page to know about the safety procedures.

 

Don’t take safety precautions lightly as ignoring safety concerns can lead to fatal consequences.

 

 

Be prepared for emergencies

 

Contingency plans should be on your priority list as emergencies like natural disasters, data breaches or any mishaps occurring in the facility can come anytime.

 

 

Allow 360-degree feedback

 

360-degree feedback means you accept feedback from everyone and not only from warehouse managers or top officials. Workers working on the ground are the ones who know your warehouse in and out. If there are any issues they will be the ones who will know them the first hand. 

 

So, always listen to juniors. They have the best advice and feedback for you.

 

 

Iterate on operations

 

Introspection is a must whenever you implement a plan because blindly sticking to one plan without any iterations can be injurious to warehouse operations. You can never be perfect and hence you need to change and improve your plans and the way you implement your plans.

 

 

Auditing and surveying of your inventory is must

 

Auditing and surveying of the inventory from time to time is a habit that you should inculcate in your warehouse managers and workers. An inventory that is equivalent to half of the company’s working capital deserves more attention to the warehouse and it’s 5 crucial processes – receiving, put-away, picking, shipping, and maintenance that have a major impact on the warehouse’s productivity.

 

You can use  DMAIC: Define, Measure, Improve and Control process and also the PDCA: Plan, Do, Check, and Act process along with the use of a cross-functional team to tackle issues.

 

Cycle counting and root cause analysis should be your way of approaching the inventory and warehouse surveying and auditing. 

 

You should make accuracy percentages of every department available to everyone because inventory accuracy records affect all the stakeholders of the warehouse.

 


 

Warehouse Management System

Warehouse Management System

A warehouse management system is a software that manages and optimizes inventory other warehouse operations.WMS is considered to be an integral part of any business having a warehouse because to survive in the competitive environment you need to be equipped with every possible software. Moreover, a warehouse management system can help you in scaling up your business without worrying about the management part.

 

As far as the retail eCommerce industry is considered, it is one of the fastest booming businesses in the U.S. According to the U.S. census department; retail sales rose to 0.7% in July 2019. Department store sales rose by 1.2%.

 

All these facts and figures indicate the prosperous and fast-paced growth of the eCommerce business.

 

To have your own firm ground and stand out from the crowd in this competitive field of eCommerce, you clearly need a Warehouse Management System(WMS).

 

 

What is WMS?

 

WMS or warehouse management system, as the name suggests,  an affordable A-Z software solution for managing your warehouse. The Software handles inventory visibility, managing supply chain operations alongside integration with a TMS (Transportation management system) or an inventory management system.

 


 

Why should I move from excel to a WMS?

It may be like this that you are already using excel to manage your warehouse. Then you may ask, “Why should I change to WMS? Well, here are the possible WHY’s that might help you.

 

 

Manual Input and Output

 

Working with spreadsheets means manual input of data. It costs both time and money. As the company gets bigger in size, more and more people are assigned to do the same repetitive work that can easily be automated using WMS.

 

 

Input Errors

 

If the inputs are done manually, then Faulty spelling, missing out to fill a particular field, filling incorrect data, etc. are inevitable. Spreadsheets don’t have built-in business logic to prevent such errors.

 

 

Lack of Real-Time

 

Working with spreadsheets is not at all an enjoyable task. It is not frequently maintained, which means data is not always up to date. As a result, decisions are often taken based on the existing old and obsolete data.

 


 

Why do we need a WMS to manage warehouses?

 

 

 

As per a warehouse survey done by Motorola Solutions Future, only 26% of company managers view warehouses and distribution centers as an asset which can drive growth for their business. Clearly, a lot of people are not visionary enough to understand the importance of warehouse management.

 

Implementing WMS within an organization can help drastically in reducing labor costs, omitting human errors, and improving inventory accuracy, improving customer service, and error-free picking and shipping goods. Modern-day warehouse management systems operate on real-time data; this allows the organization to manage all current activities like orders, shipments, receipts, etc. within one single platform.

 

According to an e-commerce fulfillment report, only 20% of businesses are implementing a warehouse management system; 10 % don’t have any experience with using a WMS, whereas 7% of them are not sure of the benefits it can offer.

 

Let’s have an in-depth understanding of the benefits of WMS in the retail industry.

 


 

Advantages of WMS in the Retail Industry

 

1.  Inventory Control 4.  Improved Capacity
2.  Labor Productivity 5.  Reduced Operational Costs
3.  Transparency and Visibility

 

 

Inventory Control

 

A WMS gives organizations the ability to track inventory across multiple warehouse locations, in various distribution centers and stores.WMS also maintains a record of every warehouse slot/bin location along with the items that have been stored in it. 

 

According to a survey,

 

34% of businesses are shipping late due to unavailability of products in stock,

 

With real-time information, WMS provides quick and accurate feedback. This helps companies to respond quickly to their customer’s demands while distributors and wholesalers know precisely what is in the warehouse and when it needs to be replenished.

 

 

Labor Productivity

 

In a survey, when asked, “How does your business cope with fulfillment during your busiest periods?”

 

“45% said that they paid overtime for the existing staff.”

 

While on the other hand

 

“38% reported having pulled staff from other parts of the business.”

 

This is certainly not the best way to cope up with the busiest hours or managing your employees.

 

WMS here comes to your rescue. WMS increases the productivity of labor by managing worker tasks. It can select tasks from a queue of all pending activities and set the priority of the tasks. 

 

Apart from this, WMS also provides labor planning feedback to management. Based on order loads, WMS can estimate the number of personnel needed to complete the day’s activities.

 

 

Transparency and Visibility

 

Won’t it be great if your supplier could access their own inventory in your warehouse alongside with on-hand SKU?

 

By shedding some redundancy, your suppliers could minimize the costs associated with holding excess warehouse inventory.

WMS also provides complete visibility of what’s going on inside your warehouse. Rather than periodic reports, where the inventory count is taken only at the end of the accounting period; WMS provides perpetual reports that enable continuous monitoring over your inventory.

 

 

Improved Capacity

 

23% of businesses increase their warehouse capacity to cope with their sales growth, a survey reveals.

 

Isn’t it an optimal solution to manage your existing warehouse rather than spending on increasing warehouse capacity?

 

Warehouse Management Systems can also improve warehouse capacity. This is done by allowing goods to move effortlessly through the facility.

 

WMS provides accurate information with zero information lead times. This allows you to reduce inventory levels which in turn increases inventory turn rate.

 

 

Reduced Operational Costs

 

26% revealed their pain points as finding time for tidying / upkeeping.

 

A right WMS can help you in reducing waste by identifying perishable and date-restricted stock in your warehouse which needs to be picked first. WMS can calculate the optimum location for each item that helps inefficient use of warehouse space with minimal pick and put away effort. 

 

According to the survey,

 

“38% reported having pulled staff from other parts of the business.”

 

Using a WMS reduces your on-hand inventory, optimizing space, and reduces the need to allocate valuable resources from other parts of the supply chain to more employees to cope up with the busiest periods.

 


 

How is it different from Inventory Management Software?

Similarity 

Differences

 

Both WMS and IM involve monitoring on the product level. Example tracking products with barcodes, cycle counting, picking, packing, and shipping, etc.

 

 

WMS is more complex than IM. WMS is more focussed on the operations of business warehouses. Example: dividing warehouse into compartments or bins, allocating optimum location for storage of frequent on the go items or perishable items, etc

 

IM is more product detailed oriented and not focussed on what is there in the warehouse. Example: product details, product SKU, the quantity of the items, batch, where the items are located within multiple warehouses, etc.

 

 


 

How to select a Warehouse Management System?

 

Calculate ROI

 

The more daily transactions – such as moving pallets and picks, locating different items in warehouses, maintaining incoming and outgoing items from the warehouse, etc., the greater the potential for ROI.

 

 

Must have a User-Friendly UI

 

Even with all the advanced functions available in your WMS, if it’s not user friendly, you and your staff won’t be able to get the maximum out of the software.

 

Asking relevant questions before investing in a WMS really helps. For example:

 

  • Does this system enable me to easily sort and view all the necessary information?
  • Is the navigation model of the WMS easy to use and understand?
  • Can the software provide a real-time window into your warehouse operation with only a few clicks?

 

 

Automation

 

Look for WMS that supports wireless technologies and where the tedious repetitive operational processes can be automated. Opt for a system that promises real-time delivery, i.e., inventory is updated as soon as the new data is entered, and not with the periodic batch.

 

Integration with Accounting Software and Shipping Partners:

 

Real-time integration with your accounting software and shipping partners reduces transcription errors at your back office, lowers the requirement of staff, and improves the access to information throughout your organization.

 

 

Inquire about system capacity

 

It is important to ensure if your WMS can be upgraded in the near future. This avoids the need to purchase new systems within a short period of time, not to mention the loss of valuable time of the organization with experiments. Questions that can still be asked are

 

  • What is the maximum number of users that can work in WMS at any given time?
  • What if you want to add another warehouse and want to manage multiple warehouses?

 

 

Ask about Technical Support

 

Even if everything may look as simple as “2+2=4”. Sometimes, life can hit you hard by complex puzzles. After acquiring the software, you can bump into problems that can’t be solved internally. You may need to rely on the software vendor’s technical support team. Find out if there is a provision for after sales tech support. Ask about the policies for maintenance, upgrades, and support.

 


 

Future of WMS in the retail industry

In most warehouses, daily activities and processes are still performed manually. However, new emerging technologies such as drones, robots, IoT, AR & VR will transform the world of warehousing within the coming years. Here’s how – 

 

According to Westernacher Consulting

 

“Worldwide spending on warehouse automation technology has already topped $2 billion and is expected to reach $22.4 billion by 2021.”

 

 

Warehouse automation may be the key to finding a solution to tedious warehouse distribution challenges. Thousands of businesses worldwide have adopted this solution. In a nutshell, warehouse automation allows you to achieve excellent outcomes with minimal efforts. This is achieved by the use of one or more than one emerging technology.

 

A quick question that you may have, “Why do I need warehouse automation?” Here are quick 5 Points for considering automation.

 

  • reducing overhead and operating expenses
  • increasing efficiency and productivity
  • Minimizing manual processes
  • Maximizing warehouse space utilization
  • Synchronizing the material handling equipment

 

Warehouse Automation can be subdivided into two parts: Process Automation and Physical Automation.

 


 

Process automation

Process Automation, as the name suggests, is the digitalization of the manual process like inventory data collection and integrating the data in the cloud platform. WMS being a cloud software is a perfect example of process automation.

 


 

Physical Automation

It includes various forms of robots and drones systems in the warehouse. Physical Automation is more costly to implement. This type of automation only provides a reasonable Return on Investment (ROI) for larger high volume warehouses.

 

 

Drones

 

 

Unmanned aerial vehicles (UAVs), also known as drones, can be used in the up-gradation of the warehousing processes. Aerial Drones with the help of optical sensors can locate an item in a warehouse from a distance as large as 10 meters. Together with the Warehouse Management System, this will provide fast detection of individual items and prevents inventory mismatches.

 

 

Robots

 

Companies like Amazon have implemented packaging robots.

 

Amazon is using the new robots known as CartonWrap from Italian firm CMC Srl has the capacity to pack 600 to 700 boxes per hour. This is roughly four to five times the efficiency of its human counterpart. Apart from CartonWrap, the company also announced its intended use of another robot known as SmartPac, which will automate the process of mailing items in patented envelopes.

 


 

Warehouse Reports

Warehouse Reports

Reporting and analysis of the reports are very crucial for any business. Reports will tell you how your warehouse and employees are responding to the strategies. Are you able to achieve the targets or not? Even if the business is running great you need to study the reports to find out the needs of the warehouse and figure out any possible malfunctioning.

 

There are three types of reports –

 

 

Bulk Picking Report / Picklist

 

The report majorly talks about the picklists and bulk picking products and the efficiency of the picking and the number of picklists generated every day. It is a crucial report that encloses much information about the warehouse and business performance.

 

 

Empty Bin Report

 

We cannot rely merely on visual inspection when it comes to tracking empty bins. Moreover, the superfast supply chains also make it imperative to know which containers are empty and which ones will get emptied in the near future. This data is required for smooth planning and capacity estimation.

 

 

Inventory on Hand Report

 

Inventory on Hand Report again is an important report that will perpetually tell you the amount of inventory available to sell so that you build your sales strategies accordingly.

 

To read more about the reports, their uses, and calculations in detail click here.

 


 

Own Warehouse vs. 3PL

Own Warehouse vs. 3PL

There is always a dilemma a budding businessman goes through, whether to keep owning his warehouse or shift his/her fulfillment centers to a 3PL company. If you also are having trouble with making a correct decision for your business, then read the below-given information about Own warehouse vs. 3PL.

 

 

Own Warehouse 

3PL

 

Control

 

Own warehouse means control over the supply chain, how the products are warehoused, and how the products are delivered to the customers. It’s you who will decide how the products will flow through the warehouse to the customer by providing different solutions for different problems.

 

 

Control

 

3PLs don’t offer that much control over your fulfillment processes because they have a one-size-fits-all solution for every company they cater to.

 

 

Customizable Experience for Your Customers

 

You can provide your customers an experience they want and innovate in that too. You can ask your customers to send in the requests and you can customize your products accordingly and charge for that extra too

 

 

Not that much freedom

 

Most of the 3PLs do not offer that level of freedom to the companies. You can’t take over the packing and shipping processes for your products.

 

 

There is a lot of minute and major costs that you have to bear to set up your own warehouse.

 

 

  • You are spared from a lot of pain of purchasing or leasing a building, hiring and training employees, and handling maintenance costs.
  • Purchase a lot of equipment like forklifts, trucks, conveyors, shelves and other warehouse necessary items 
  • Paying taxes, rents, administrative costs, and other start-up costs 
  • Following safety regulations and going through safety audits 
  • Investing in a warehouse management system and managing it
  • Stocking and restocking packaging and shipping supplies 

 

 

You don’t have to worry about setting up the infrastructure, managing workload and maintenance, and start-up costs.  

 

  • Just pay the 3PL charges or share in the income and you don’t have to worry about the other costs.
  • Third-party order fulfillment services can meet the varying demands of businesses. 
  • 3PLs have proven expertise to forecast the varying demand of the customers 
  • 3PLs are therefore preferred by the small to medium scale businesses for warehousing and order fulfillment processes.

 

 

You have to be your own expert or hire one

 

You have to hire warehouse experts or learn by trial and errors

 

 

Proven Experience and expertise

 

You can rely on 3PLs expertise in warehouse operations for shipping, picking, packing, and demand forecasting.

 

 

Tough to integrate different channels

 

It’s not that tough if you have a knowledge of how to manage a warehouse with warehouse management software. Many warehouse management system companies offer training and support in using warehouse management software efficiently.

 

 

Easy to integrate different channels

 

3PLs have industry best picking packing and shipping technologies along with warehouse management systems because they serve many companies and hence they have to be the best.

 

 

Tough to relocate to decrease lead time

 

You have to invest more in opening different warehouses in the locations where you have a strong customer base.

 

 

Easy to shift the fulfillment stock to reduce lead time

 

Decrease order lead time by easily relocating, on the other hand, 3PLs give you a chance to shit your products to a center which is nearer to the geographical location where you have more sales. Doing this can help your delivery order in shorter lead times, in fact on the same day.

 

 

Tough to scale up

 

Scaling your business requires some tough investment decisions to be taken because you will require more workforce, space and everything needed to scale up

 

 

Easy to scale up  

 

  • You can just pay an increased amount of charges and you can scale up anytime because 3PLs cater to numerous companies and they always have extra space and workforce available for a company that wants to increase the level of the supply chain.
  • You can also balance out the stocks for high and low seasons

 

 

Innovate on your own

 

You are all by yourself to innovate. However, having said that you can implement the innovations that you want

 

 

Professionals innovate for you

 

3PLs work for different types of industries and hence they are always innovating and evolving and they can also offer you some really good innovative ideas to improve your business. For example, they can tell you about effective procurement methods or shipping and handling methods.

 

 

The SG & A cost

 

The selling, general and administrative costs are high in their own warehouse because there is a cost of the management of the entire facility and workers. Though on a longer-term it turns out to be lesser than the money invested in 3PLs 

 

 

Reduce the SG & A cost

 

Selling, general and administrative costs are decreased initially for small and medium businesses because your day to day operations are simplified in a 3PL company.  So, even if you are planning to scale up SG & A cost is considerably low, unless you become a huge company with a vast geographical coverage

 

 

You can include any number of SKUs

 

Since it’s your own warehouse you can include any number of SKUs and won’t have to bother

 

 

There is a charge for every new SKU added

 

3PLs charge for every new SKUs so you have to be meticulous about which line of products you want to add and whether those products will bring returns or not

 

 


 

Important Warehouse Management Terms

A notification, both in the offline or online form, that encloses information about pending shipments that are sent by a supplier to a warehouse management system is called Advanced Shipping Notification.

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A single picker picks items for multiple orders in the process of order picking is called batch picking.

A document given by the carrier of the shipment to the recipient of the shipment that has the information of the items present in the consignment is called the bill of lading.

When the picker picks the items present in one order is called discrete picking.

Products that have the same UPC number or SKU are called line.

The practice of shifting the received shipments directly to the shipping area for distribution to other warehouses or customers without having to store them in the warehouse.

An identification mark made up of a series of bars and spaces that serve the purposes for recognition of a product through a scanner that can read the encoded information present in the mark.

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A purchase order is a document that includes the lists of the products with their number, type, and the agreed price. The purchase order is sent from the buyer to the supplier or manufacturer to request a designated amount of merchandise.

An order is a collective term for all the products that a customer has purchased in one transaction.

When an order containing products sitting in different areas are picked by the order pickers to assemble them for shipping, then this process carried out by the pickers is called zone pickling.

It is a process in which the incoming orders are removed from the receipt area and kept in their final pre-decided location. Also, the movement and the storage location of each product are recorded in this process for further references.

As the name suggests, it’s about receiving the ordered merchandise physically. It involves inspection of the received order to check whether the quantity is the same as ordered or not and if the products are in good condition. Furthermore, the determination of the storage location of the products, moving the products to that location, and finally reporting the entire process for future references is also done in this step.

A process of moving stock from one temporary or secondary storage area to a permanent storage location like displacing stock between distribution centers or offline retail outlets, or if you take from a supplier’s point of view, it’s transferring the stock to meet consumer demands.

Unit: It denotes a single particular item or product.

It’s a software that takes care of all the warehouse operations right from raising a purchase order to tracking the order, receiving the order, putting it away to the storage location, picking, shipping and inventory.

A scannable code made up of different black and white square patterns that can be scanned by mobiles or cameras to redirect a user to a URL or any other information or transaction platform attached to it.

A license plate is a pallet tag similar to a car’s license plate; the pallet license plate has a set of unique combinations of numbers that are unique to each pallet. Usually, the software assigns the information of products kept on the pallet to the pallet number so that it’s easy to track them in the warehouse.

It is a unique identification number, usually an 18 digit number containing unique ID, allocated to the boxes and pallets inside the large containers. The number is mostly used in an ASN to group the products.

The inventory master file contains the information of all the products in the warehouse along with their quantity. It is usually used with the location master file, which has information about the location of each product in the distribution center.

Third-party logistics known with the acronym 3PL stands for a company that manages other online and offline retail business’ warehouse and order fulfillment processes.

A to-do list for a picker, picklist includes directions to the storage location of products along with the descriptions and the sequence in which the items are to be picked for the order. The picklist boosts the efficiency of the order fulfillment process by providing the pickers with an easy map.