Peak season in fulfillment is rough!
Client and consumer expectations are high, volumes are up, SLA’s are tight, and good labor can be hard to find. Peak season can be challenging in third-party logistics if you don’t have a streamlined way to handle the chaos.
Whether you want to avoid the mistakes of last year or you’re bustling from e-Commerce growth, there is no better time to review your current warehouse processes and make changes.
Our warehouse management customers were successful during their busiest times with operational efficiencies gained using optimization strategies and intelligent automation (business rules).
By optimizing your warehouse, you’ll strategically handle all of the challenges peak season brings head on. Optimization isn’t just key to conquering peak season but will also set your team up for long-term success.
Warehouse Management 101:
Wondering where to start in your fulfillment center? Focus on your goal – creating cost and time–saving efficiencies. When strategizing ways to optimize your warehouse processes and get the most out of your warehouse management system, focus on these three critical success factors:
- Inventory control – The inventory you house needs to be accurate, always accounted for and visible to customers.
- The ability to fulfill orders efficiently – Maximizing order throughput while minimizing error rates ensures profitability for your business.
- Accuracy – Reduce costly errors. Mistakes in fulfillment will eat into your profits and can cost you clients.
Think about what you could be doing faster, more efficiently or cheaper. Ask your warehouse manager, are there ways to cut steps, costs or time?
Here are seven proven ways you can run an efficient operation and raise customer satisfaction in your fulfillment center:
1. Warehouse Layout
Don’t make the mistake of overlooking your warehouse layout. For a third-party logistics company, every inch of warehouse space matters, as space can be limited or decided by potential ROI. Re-evaluating your warehouse layout can ensure you’re maximizing the power of your warehouse. A well thought out warehouse layout can greatly reduce travel time. By defining a logical walk sequence for picking and put-aways, your team can increase productivity and work more efficiently.
You can also focus on warehouse layout in the following areas:
- RECEIVING – The ability to quickly identify where inventory goes is critical to keeping your receiving area clear for additional shipments and to get the inventory into circulation as soon as possible. In VeraCore, you can also ‘auto-locate’ the first available location closest to receiving. This helps to reduce travel time and eliminates any confusion on put-aways.
- FORWARD PICKING/QUICK PICK – High demand, fast moving items should be stored in an area where workers can easily access them. By minimizing the distance traveled to fill an order you can lower the time and cost per order. Maximize the space in your forward picking area by adjusting which products you include. This can be decided by current trends, seasons or velocity.
- RETURNS – Effectively managing returns requires the set up of two distinct locations – a transition location and evaluation location. We’ll tell you more about how to handle returns later in this section.
2. Order Batching – Using Intelligent Automation
We mentioned Intelligent automation (also known as business rules) in our intro, it’s a powerful tool to help automate manual processes with a warehouse management system like VeraCore. Once you’ve established business rules in your warehouse you can begin to optimize processes.
One method we recommend is to group orders that involve similar steps. Grouping batches of work that have the same workflow can make it easier for your team to handle orders. Your team will complete the picking process and pack steps more quickly, which means more orders out the door faster.
Examples of Intelligent Automation:
- Release batches into the warehouse at specified times. This can be a specific time of day or day of the week. If a shipping carrier picks up on specific days of the week, release your batch of orders to coincide with pickup times. Batch picking will ensure you won’t risk missing SLA’s.
- Release batches with specific packing instructions. If you have multiple packing stations, you can select where certain batches of work are packed. Grouping orders with similar steps allows your team to focus on completing one task, with quick repeatable steps. This makes for a faster process, rather than starting and stopping different tasks in the warehouse.
Ultimately, organizing your work in a more efficient manner will help you streamline processes and increase productivity all around.
3. Barcode Technology
Use barcodes for more speed and accuracy. If you’re looking to stay on top of high volumes, implementing barcode technology can be a game-changer in your warehouse. Barcodes are not as difficult as you would think. And the benefits greatly outweigh the effort upfront.
Barcodes allow you to dramatically speed up warehouse transactions, replacing manual data entry with a quick scan of a barcode. When coupled with the right warehouse management software, barcode technology can provide greater quality control over your warehouse operations (helping your inventory management efforts), reduced costs and many more efficiencies.
If you’re seeing your team struggle by retracing steps or manually typing up long barcodes, it’s time for a change. By implementing barcodes, managers can capture data in real-time and oversee activities with more speed and accuracy.
Barcodes can be used to perform a multitude of wireless warehouse transactions in:
- Material handling
- Shipping label generation
Want to take a deeper dive into barcode technology? Check out our blog post on barcode technology.
4. Optimize the Picking Process
Picking is a central step of the order fulfillment process. Keeping up with a high volume of orders – especially orders with expedited or same day shipping – while maintaining accuracy, can be one of your biggest headaches. While there are many picking strategies (ex.zone, wave, discrete), cluster picking is one of the most efficient methods for reducing travel time and increasing picking rates during peak season. Cluster picking (essentially batch picking) allows you to batch pick multiple orders in a single pass through the warehouse, eliminating retraced steps.
We’ll walk through a prime example that combines the use of barcodes and cluster picking:
In this scenario, the picker can do less walking and more picking, allowing them to pick many orders in one pass. A reliable warehouse management software tells them exactly where to walk and does the QC for them, saving both time and money.
5. Optimize Packing
An efficient pack out process can provide your operation with a high level of quality control, content tracking and audit trails.
Let’s take a closer look at all three.
- Quality control – Your clients trust you to manage their products. This means getting the right product to the right end-consumer. If a 3PL doesn’t take the responsibility of QC’ing seriously, the outcome could be disastrous for a seller and for your bottom line. With peak season bringing in higher than normal order volumes, 3PLs need a QC process they can rely on. If you don’t have a QC process today, you need to formalize a process for efficiently QC’ing orders. By building out a QC process with barcode scanning, you can eliminate the need for manual checks, saving you time and reducing costly errors. Cluster picking described above is one way to ensure quality. If cluster picking doesn’t make sense for your operation, another way to ensure quality is to set up a dedicated QC/packing station.
- Content Tracking – Orders come in hot and can go out the door in multiple packages depending on the committed shipping method or destination. Tracking packing contents allows you to identify what products are in which packages in a multi-package shipment order.
- Audit trail – Providing your customers with visibility into orders is key to running a successful operation. Your WMS should provide you and your customers visibility into all orders, down to which warehouse worker packed the order. In order to provide detailed tracking at this level, you need to have a WMS capable of logging all transactions during the fulfillment process.
5. Inventory Management
You can’t pick and pack efficiently (like we mentioned above!) if your inventory is a mess. Poorly managed inventory can start a domino effect in your operation. Inventory discrepancies cause backorders, which can negatively affect client relationships and cut into your bottom line. If you’re still using spreadsheets or manual methods to manage inventory, the process can be even more tedious and error-prone.
To keep up during peak season, you’ll need a solid inventory management plan so you can accurately manage and track inventory. The inventory you house needs to be accurate, always accounted for and visible to customers.
Utilize barcode technology – By using barcodes and wireless devices, you can track every inventory transaction – providing you and your clients with real-time visibility into your warehouse.
Benefits of inventory management:
- Real-time inventory accuracy
- Inventory Tracking – see locations of products and movements in facilities
- E-Commerce storefronts have correct inventory levels (preventing backorders)
- Provides up-to-the-second data to everyone who needs it, when they need it
Maintaining accurate inventory levels will ensure your customers’ orders continue to flow during peak without costly interruptions.
As order volumes go up, so do returns. If your customers are dealing with frequent returns, it’s important that your team reviews its preparedness to handle the influx. Your team’s focus is on getting orders out the door, and you don’t want to lose time on orders/returns coming back in.
The returns process should be as frictionless as possible to help you save on labor and protect profitability. Make sure areas where returns are handled are clearly marked in your warehouse. When your team is handling returns, they can segregate items into return locations based on status such as:
- Good for restock
Use transition locations to move inventory to stock locations or elsewhere, such as Recycle or Disposal.
Warehouse workers can save time with a clear returns process and by scanning barcodes to record items throughout the return process. Train your team members on your returns process so they know exactly how to handle returns. A clearly defined returns process can eliminate confusion and the need for verbal instructions on returns.
We uncovered seven different areas where you can improve your fulfillment services by re-evaluating your current processes. By making improvements such as these, you can yield greater efficiencies in your warehouse for this peak season and beyond!
Speak to a VeraCore fulfillment expert to get the full scoop on how VeraCore can help you succeed in e-Commerce fulfillment!
Brian Parrillo is Vice President of Sales at VeraCore.
He has over 19 years of experience in the fulfillment industry and has helped hundreds of 3PLs reduce operating costs, improve customer experience, and optimize their overall business processes.