Customer retention and warehouse efficiency can have an impact on your e-commerce business.
That’s because inefficient warehouse operations can cause inconveniences. Some examples are delays in product delivery and shipping the wrong products to customers. And this can lead to frustration for both parties.
If your warehouse efficiency starts to slip, it will be reflected in your customer retention rates. And if a customer made transactions with your competitors, it can hurt your bottom line.
In this post, we will walk you through the ways how to improve warehouse efficiency and productivity and reduce costs:
1. Understand product velocity
Product velocity is a term that refers to the rate at which specific items sell.
Now, if you run through these numbers, you’ll often find that some items sell more than others. That’s why you need to organize the layout of your warehouse in a way that these items will be easy to access.
Ideally, you need to place the quickest moving items to the packing stations. Doing so will likely eliminate unnecessary travel, and you’re likely to move these products a lot quicker.
2. Know seasonality
The seasonality also plays a huge role when you’re working with a warehouse. By knowing what kind of brand will be sold or items on these times, you’ll be able to produce a higher quantity for these products.
For instance, a toy company for kids is likely to produce more items, especially during the holiday season.
3. Simplify your process
In the last couple of years, do you layer functions over more extended, existing ones? Does the product or order flow doesn’t make a lot of sense?
Then you might want to examine your physical processes and the steps you need to take in product flow and order fulfillment.
Remember that fewer steps on your part mean more occasional touches, which equals lower costs.
4. Prioritize safety
Just because you are enhancing your warehouse’s efficiency does not mean you should forget safety.
Without safety practices in place, you will be more prone to dangers and accidents. And this can lead to inefficiency and loss of profits in the long run.
Although skimping on safety might be saving you a lot of money at the start, accidents can be costlier in the long run.
5. Avoid procrastination
When you’re getting shipments from major suppliers, it’s easy to give in to the mindset that “you’ll take care of it later.”
But this leads to a loss of productivity in the long run.
So, instead of procrastinating, use your time to break down your boxes, unpackage items, and then stock them accordingly.
This is a habit that you need to adapt to. If your products’ shipment comes on the same day every week, you might consider scheduling it in your calendar.
Putting it off until the very last minute will turn it into a much larger problem later on.
6. Invest in a warehouse technology
Warehouse technology has grown immensely over the last couple of years.
More and more inventory software has been readily available to the market. This ranges from the basic barcode system to advanced real data stream systems.
It will connect everything-from the initial supplies to the shipment in a single place.
In the same way, warehouse workers are also using tablets and other portable devices to connect with the real world.
It allows supervisors to access their inventory without necessarily logging in quickly. Some software can even give you sales predictions.
7. Use third-party logistics
Everyone might not be using a 3PL or third-party logistics provider.
Most clients think that they can do fulfillment a lot cheaper and offer higher quality themselves.
But we’ve also seen many great experiences from 3PL with competitive costs as you compare it to internal expenses. Having a 3PL partner means that it isn’t tied with new facilities and systems.
If you run a small e-commerce company, a 3PL allows you to concentrate more on merchandising. That’s because these are business management functions that are vital to your company’s growth.
If you want to enhance warehousing, storage, or order throughput, 3PL is a great option.
8. Audit regularly
Another step that you need to take to have a more efficient warehouse is to audit regularly.
You can start by doing an operational audit. Then, check how long it takes for all the processes in the supply chain to be finished.
Also, ask yourself questions. Are your goods organized in a way that makes sense? Does picking orders flow as fast as possible?
If you’re not well-versed in making a warehouse audit, you must hire someone who can make you a more efficient warehouse manager.
9. Maintain good relationship with suppliers
While this point is relatively easy to overlook, you must maintain a good relationship with your suppliers.
After all, if you don’t have a product that you can store or ship, you won’t have a business.
Technology tools in the warehouse will make it easy for you to maintain a relationship with your suppliers. Some examples of these tools are barcode scanners and GPS systems.
As long as your warehouse and suppliers are compatible, then it will be a lot easier for a warehouse to update suppliers with the information.
It’s also a lot simpler on the supplier’s part to keep the warehouse informed about the product’s status.
10. Conduct employee training
Sure, using the latest technologies can boost warehouse efficiency. However, it will not matter if your employees do not know how to use it.
That’s why you need to incorporate training programs to your employees, which focuses on technology. This will teach your employees how they can use specific equipment.
Moreover, employee training should not be limited to how to use the equipment. It is essential that you also pay attention to safety and maintenance.
11. Provide customers with options
Moving the products downstream can help decrease warehouse costs. It also allows you to shift the inventory burden to retailers.
Major players in the retail industry are now shifting the burden to retail outlets. Target, for instance, has 15% of their online purchases pegged for pick up in-store.
If you have retail locations that can offer fulfillment, you might also allow your customers to do a local pick up.
Meanwhile, if you’re an online retailer that doesn’t have a brick and mortar store, you should consider selling on Amazon.
Amazon Fulfillment lets retailers and suppliers sell their products to the marketplace. Then, the products will be stored and fulfilled in their facilities of Amazon.
Moreover, Amazon has also introduced a buy online, pick up store. All customers need to do is purchase products, then arrange for a pick up at an Amazon Locker.
Once a customer gets a pick-up code, all they need to do is to wait for three days before they can pick up their package.
12. Do a regular feedback mechanism
Chances are, it will be your shop floor workforce who will be the first ones to spot any problems that can affect your productivity and efficiency.
Whether they escalate this problem to you or not will depend on how connected they are with the warehouse. Hence, it would be ideal to include a regular feedback mechanism for your operational management functions.
Now, if there is no information in place for sharing that feedback, then you won’t likely hear about what’s holding them back. Sometimes, all you need is a supervisor or someone who will foster communication with your team.
Other times, you will need formal weekly sit down meetings or come with an idea box style solution.
Whether it’s inventory planning or other systems you have in place, you need to get direct feedback from the warehouse floor. That way, you can better understand how to improve warehouse efficiency.
13. Regularly review routes
Ideally, you should regularly review your picking routes, which is led by the warehouse management. Operations should be involved, as well.
The whole point of having this review is to test out alternate routes if there are any. Then, see if the outcomes are expected to get better.
14. Visualize your process
Repeatedly doing significant processes will improve, over time, your efficiency and productivity.
This better allows you and your team to see things from a visual perspective from beginning to end.
So map out your process, placing it in a highly attractive, visual way, and display it prominently for everyone to see.
The functions of warehousing have changed dramatically ever since e-commerce entered the scene.
That’s why you need to keep on improving your warehouse efficiency. It would also help to avoid complacency and stay competitive. Hence, you might want to register with a dropshipping platform that has a streamlined inventory management.
Improving your warehouse processes allows you to be efficient in serving your customers. That’s because it can affect your product delivery and customer satisfaction.
If you do not know where to start, we suggest that you conduct an assessment of your process. That way, you can identify bottlenecks and pitfalls that you need to address.
All you need is to create and enact your plan and have someone who can make you accountable. Then review your process to see if there is anything you miss.