Article updated in May 2020
Today, supply chains are increasingly complex, especially with the emergence of electronic commerce and omnichannel. Constantly solicited by various businesses, including your competitors, customers are more fickle and demanding than ever. Indeed, you must adapt to better meet their needs by focusing on your warehouse layout optimization as a core strength. But first, keep in mind that:
- Labor costs typically consume at least 60 % of the warehouse budget;
- Warehouse management will influence customer satisfaction;
- You are paying for space even if you don’t use it.
As your clients now expect very short delivery times, it is crucial that you organize your operations to reach optimal performance. This article covers three important elements:
- Order picking strategies;
- Warehouse space management;
- Utilization of a warehouse management system (WMS).
Let’s see how these factors can be organized to enhance your productivity, long-term growth and customer satisfaction.
Define Your Order Picking Strategies
After having managed your storage area in an efficient way, you can define your order profiles to develop specific order picking strategies for each one. This way you can assess and identify order size patterns and product movement over a six-to-twelve-month period. The goal is to apply best practices by:
- Keeping a queue of orders available for the pickers. However, you must also have an effective replenishment strategy;
- Ensuring that you do not slow down picker’s tasks by adding others, such as labeling or wrapping.
- Minimizing their travel and product manipulation time.
These strategies will help you significantly reduce the time spent on order picking. The most important is to determine the best type of picking that suits you best:
- Wave: pickers consolidate multiple orders into small groups or waves. They organize these orders in a particular sequence keeping in pace with shipping schedules. Usually, the preparation of orders is based on the average pick-up according to the order picking profile;
- Batch: pickers collect all the items allocated for a batch order in only one travel. It is an efficient method for picking-up a broad range of products, but only for a one-or-two-line ordering. That way, we minimize travel time per order. However, ensure to add a sorting process afterwards. This process must be efficient as we try not to reduce travel gains;
- Zone: pickers are assigned to a specific zone where they only pick products within it. This type of picking can also be done simultaneously. Then, each picking result will be consolidated. Otherwise, we proceed to a sequential zone pick, where pick-ups in one zone will be handed off to the next one. In this way, we eliminate the consolidation process.
Thus, you enhance order picking operations’ productivity and ensure a good customer service.
No more space? Create it!
Are you considering expanding or leasing somewhere? First, ask yourself if it is possible to maximize what you already have. Before you even think about expanding, let alone the high costs this could involve, you must ensure that each storage bin is occupied in a smart and functional way. To do so, many strategies exist, such as choosing the right type of storage for your goods:
- Fixed or dedicated bins: each SKU is assigned to a specific bin, where it will always be stored, and no other SKU may be stored there. However, this method is not efficient as bins frequently end up being empty;
- Random or floating bins: any SKU may be assigned to any available storage bin;
- Combination of hybrid bins: mix of fixed and random storage.
Flexibility is important to manage warehouses, as these deal with a wide range of products. Additionally, it is desirable to have a variety of storage sizes to avoid inefficiencies and low space utilization. After having chosen the most convenient type of storage, you can:
- Reduce aisle widths by bearing in mind their conditions of use. It is important to assess the number of cross and people aisles to maximize their utilization. Also, some factors can influence this width, such as the use of lift trucks;
- Use tube handling pallets to stack products without causing damage;
- Employ pallet racks to maximize vertical storage space;
- Maximize your space with pushbacks;
- Avoid wasting areas above aisles by installing in-rack tunnels.
Get a Warehouse Management Solution (WMS)
A WMS will help you to standardize your processes and make these flexible to adapt to customers’ demands. It will keep you aware of the flow of goods, from receiving to shipping. Hence, this tool offers optimal visibility and particularly helps to significantly reduce errors regarding shipments and delays.
It is an ideal system to manage customers’ web orders. A WMS can create a wave per order profile which optimizes picking operations. As a matter of fact, it provides insights in real time on an order’s status. You can then, among others, verify if:
- A bin is ready to be picked, because storage bins contain all the required stock;
- A picker is completing an order;
- A picking has been completed and is ready to be shipped.
In addition to enhancing inventory accuracy, a WMS allows to easily manage client orders priorities.
Generally, a WMS enhances workflow efficiency while avoiding overloading any part of the warehouse. As it truly plays an essential role in customer satisfaction, it is critical to optimize operations to improve performance, reach, and overachieve on objectives. It is an ultimate truth for e-commerce companies.
As you can see, our client’s satisfaction goes hand-in-hand with good warehouse management. Are you ready to start attaining this level of service with Createch’s business performance improvement team? Contact us!
