May 2019 | News | Takeaways

8 Great Ways to Waste Money in a B2C Warehouse

Tags: Warehousing, Logistics, Supply Chain

Outdated warehouse processes and procedures reduce productivity and raise costs, but some simple changes can help you save money and improve efficiency, according to Realtime Despatch.

1. you don't use warehouse locations.

If you rely on staff knowing where everything is, or having to arrange SKUs in alphabetical order to find them, you're tying yourself to an inflexible approach.

If you give SKUs a dedicated "home" location in the warehouse, each one needs enough space for the maximum quantity that will ever be present. As it's unlikely that all your products will be at this maximum quantity at one time, there will be lots of empty space in your racking. This low stock density is not only an expensive use of space, it also requires staff to walk greater distances than necessary, slowing down key warehouse operations.

Every B2C warehouse should have a location numbering scheme that's intuitive and completely independent of the SKUs the locations might contain. This is a fundamental requirement for introducing a warehouse management system (WMS).

2. YOU Still usE paper.

The benefits of introducing product barcodes and handhelds far outweigh the cost in most cases. B2C operations generally find most SKUs are already barcoded when they arrive, but even if you need to add barcodes as part of your receipting process it's still worth doing.

In many cases it's not necessary to barcode individual items. Barcoding the outer carton can be a useful approach for those products that don't already have a manufacturer barcode on each item.

Once your operation is using warehouse locations, product barcodes, and handheld scanners, it will be possible to know exactly what stock you have at any given time and to know exactly where it's being held. More significantly, you can eliminate mispicks and other errors, even when new workers join your team.

3. YOU Rekey data or bouncE between multiple systems.

Manually rekeying or cutting and pasting information is often done to produce courier labels or CN22 documentation, but it shouldn't be necessary in day-to-day warehouse operations. Similarly, it should be possible to complete all key warehouse operations from within a single WMS environment.

Processes that require users to log on to multiple platforms to generate courier labels, update the status of orders when they've been dispatched, or to adjust stock will not scale as your business grows and will allow the possibility of costly manual errors.

4. YOU Pick one order at a time.

The most obvious way to process orders is to start with the oldest one, pick it, take it to a packing bench, pack it, and repeat. Although this is a simple way to process orders, it also requires the picker to walk farther than necessary and repeatedly visit the same locations to pick single items.

Unless your orders are incredibly uniform, a system that requires you to process all your orders the same way is highly inefficient. Consider your typical Monday morning orders and how you'd subdivide the pool to process them most efficiently. If your current WMS doesn't allow you to do this, then it's costing you money in wasted time and missed delivery deadlines.

5. You spend too much time sorting picked items before they're packed.

Grouping orders will increase the efficiency of your picking process. But if it's not done carefully it can just move the bottleneck from pickers to packers, as they'll have to sort through a mixed tote to find the items they need.

You can reduce this by limiting the number of items picked or by picking into subdivided carts. This way, when a cart is presented to the packer the stock is already sorted by the orders it's being picked for. The aim should be to spread the workload equally between the pick and pack operations so that orders flow through both processes at roughly the same rate.

6. YOU DON'T pick your best-selling products or product combinations efficiently.

In some environments a handful of products are responsible for a significant proportion of orders. If these products or product combinations are not identified and processed separately, you might miss an opportunity for significant savings.

The 80/20 rule might apply to a few of your most popular products. Best sellers may be determined by product promotions, or they may change day-to-day as a result of factors that you can't plan for. You need an order processing platform that allows you to identify the orders for your best-selling products and handle them together.

7. You have a large picking face, but your stock is too concentrated.

If you have a picking face that's spread over more than a few aisles and contains a large range of SKUs, it makes sense to spread the stock around. Amazon does it.

Make sure your WMS allows you to control the "slotting" logic that determines where SKUs are put in the picking face. At its most basic, it should ensure that each of your most popular products are spread around so they're held in every aisle. This will dramatically increase the proportion of picks that can be completed within a single aisle.

8. You don't know where the time is going and what it's costing you.

In a paper-based warehouse, it can be hard to get an accurate picture of how much time workers spend on each of your main processes. You need to know a realistic man hour cost for your operation and how many weekly man hours are spent in each of the main warehouse processes.

When you do, it becomes possible to ensure the costs associated with improving your warehouse efficiency are justified.