HOW DOES WAREHOUSING LOGISTICS IMPROVE E-COMMERCE FULFILLMENT?
When it comes to e-commerce fulfillment, the efficiency, speed and accuracy of your warehousing logistics can make or break your success.
At the height of the pandemic, online orders were at an all time high, and the need for retailers and brands to work with 3PL companies increased exponentially. And though online sales have narrowed, quarterly sales are growing in 2022.
One projection says that by 2024 we’ll surpass over half a billion dollars in online sales of goods. This means more and more storage is sought by retailers and third-party logistics companies.
No matter the sales numbers, the need for any 3PL company to have their (ware)house in order is at the heart of winning warehousing logistics. In order to control the shipping and receiving of goods, you must control the warehouse.
Before we get into the specifics about warehousing logistics (think warehouse management software), we want to cover some of the basics of the warehousing industry for greater context.
Warehousing and Storage 101
Location, Location, Location
It may seem obvious, but it matters where your 3PL company’s warehouse is located. Though cost is crucial, whether you are buying land on which to build your warehouse or buying an already existing warehouse, you must also consider access to airports, railroads and highways. Consider congestion patterns and conditions of both railroad tracks and highways, too. All of these things can affect efficiency, which, in turn, affect your expenditures.
Labor Force Considerations.
With the Great Resignation, many industries have suffered a labor shortage. Staffing warehouses has had its challenges too. Plus, parallel with the ups and downs of e-commerce, there is an ebb and flow to hiring in warehouses and storage spaces – sometimes we’re on fire and sometimes there’s a hiring freeze. Either way, you need to know the demographics of the labor force where you have your warehouse and what kind of access to talent you’ll have. And with the cost of fuel these days, if you rely on good talent located too far, unless you’re willing to cover the costs of gas, you’ll be hard pressed to find people willing to take the gig given the amount they’ll spend each week to fill up their gas tank.
Seasonal or Year-Round Contracts
Some companies store only seasonal products and seek a storage contract that is seasonal only. If you go year-round but the amount of product you store fluctuates, can you use a warehouse that allows you to store more or less, depending on your need.
Are you storing dry goods? Flammable product? Do your items need refrigeration? Are there hazardous materials involved? Do you need/prefer a fire sprinkler system or a fire suppression system (chemical or foam)? Also, check the surrounding area for bodies of water and make sure whatever you are storing and whatever fire suppression methods used do not contaminate either the ground or nearby streams, ponds, or lakes.
Order Fulfillment 101
When we speak about fulfillment we’re talking about the process from when an online order is received to when the order arrives to the customer.
Step 1: A candle company, Sweet Smelling Candles, receives an order of 3 candles via their website from Consumer Cathy.
Step 2: The Sweet Smelling Candles processes the order and Cathy receives a notification her order has been received.
Step 3: Sweet Smelling Candles request for fulfillment to the warehouse.
Step 4: In the warehouse, the item is located via a WMS and picked .
Step 5: The order is packed by warehouse employees.
Step 6: The order is shipped.
Step 7: Consumer Cathy receives a shipping notification.
Step 8: Consumer Cathy receives her Sweet Smelling Candles.
And in this day and age, this all happens within a 24-48 hour window.
3PL and E-commerce Fulfillment
Time is money. We hear this aphorism all the time. Never has it rang more true than in the world of e-commerce fulfillment. People are increasingly wanting reduced wait times for their online purchases. In a 2019 survey, 40% of Gen Z and 32% of Millennials were likely to pay for expedited/same-day shipping costs.
The demand on brands to deliver can stretch them to the brink. Hiring a third-party logistics company means hiring a vendor with established fulfillment centers, so a brand does not have to take on the burden of a storage facility or additional warehouses.
With warehouse management dealing with the headaches of limited storage space, damaged products, shipping delays, and disgruntled consumers, a 3PL can take these problems off a retailer’s plate.
As a 3PL, we receive products, store, pick/pack and ship. We’ve built a reputation on accurate inventory tracking, automation efficiency, customized orders, and same-day delivery. The name of the game: speed.
Warehousing Challenges: 99 Problems and Logistics Ain’t One
When we talk about controlling the warehouse, we’re talking about locating problems.
Let’s say the product is widgets from a big box chain. They come in four different colors: red, green, blue, black. They’re bought as single packs, two-packs, or the variety pack (all four colors). It’s discovered that the single pack of blue has a defect. You must be able to locate the exact location of just that inventory.
Likewise, if you are informed that a pallet of the rainbow-colored candy Skittles, for example, might have a past expiration date, you’ll need to locate that exact pallet that carried the Skittles in question.
Or, going back to our widgets. If they arrived at your warehouse damaged, you’ll need to identify the truck that shipped the damaged goods.
When it comes to inventory management, precision, speed, and detailed control put you ahead of the warehousing logistics competition.
So how do warehouse managers problem-solve easily and swiftly? Warehouse management systems, or WMS, is the ultimate tool for inventory control, inventory management, and e-commerce fulfillment.
Warehouse Management Systems: The Software Solution for Warehousing Logistics
Inventory Management vs. Warehouse Management.
To control the flow of inventory, warehouse managers rely on a software system to manage how inventory is ordered, stored and moved within the confines of the warehouse. This is called warehouse management. It also includes managing warehouse staff and the workflow.
Likewise, inventory management is a broader term, and includes warehouse management as well as aspects that happen outside of the warehouse and relationships with suppliers and retailers. It’s keeping track of your stock from when it’s received to when it is sold.
According to Statista, 83% of warehousing and logistics providers use a warehousing management system.
Not All WMS Are Alike
There is a wide spectrum of warehouse management systems from simple to complex. Your needs depend on a variety of things, one being the size of your warehouse. Larger warehouses mean more complex WMS as tracking inventory alone gets trickier the more square footage it travels.
It’s important to get a system with your future in mind. Where do you hope to be in five years? In other words, prepare for growth and get a system that is flexible and configurable so it doesn’t outgrow your business and then you’re stuck with the costs of a huge upgrade.
WMS: Part of a Trifecta
Your warehousing management system is one of a three-pronged effort to keep operations running smoothly. The other two areas are new devices and technologies (like mobile devices) for workers and automation.
Modernize with Mobile Devices
The incorporation of mobile devices goes hand in hand with increased WMS functionality. For the most efficient and modern-day warehousing logistics, companies are looking to equip warehouse employees with devices that improve workflow, including handheld mobile computers with scanners, handheld barcode scanners, rugged tablets, mobile barcode and thermal printers, and wearable computers.
Workers equipped with the latest and greatest of mobile devices increases WMS functionality and many areas of the warehousing processes, including inventory tracking, shipping, receiving, slotting put away, picking and packing, reverse logistics, assembly and returns.
A Note About Refunds and Returns
Equal to the efficiency and accuracy of shipping out to consumers, warehouses need to be streamlined when it comes to the return of goods. Returns are a threat to retailers’ profit margins. In 2020, more than 10% of items bought were returned. Lost sales resulted in a loss of $400 billion for U.S. retailers.
In the world of warehouse logistics, the process in which an online item is returned to the retailer is called reversed logistics, and though you’re dealing with less inventory it is still crucial to have a vigorous WMS in place to handle all aspects of reverse logistics, including returns, reselling, repairs, repackaging and recycling.
Remember, Communication is Key
Whether you are dealing with retailer relationships, supplier relationships, or employees, when it comes to warehouse logistics and successful e-commerce fulfillment, clear and precise communication is priority number one.
Through efficient troubleshooting, a skilled labor force, robust systems, the implementation of smart technology and WMS, and good old-fashioned one-on-one exchanges of communication, a 3PL can provide warehousing logistics that best serves e-commerce fulfillment, ensuring satisfaction for both your partner retailers and their customers.
About Westhub Logistics
At Westhub Logistics we practice a client-first approach. We stand out with an unprecedented standard for personalized 3PL services. Our first goal is to listen to your needs and provide you with unique solutions. WHL can work with you to create a customized FBA plan, and you won’t have to pay for unnecessary services. If you are seeking logistics support, we’d love to hear from you, our team is ready to help. Give us a call today 408-585-9346 or send us an email at email@example.com