Getting orders to your customers as soon as possible is crucial to ecommerce success.
Delays can have a massive impact on the likelihood of repeat business. But getting it right consistently is a huge step towards people trusting you time and time again.
In fact, a BigCommerce report found that 80% of people ranked shipping cost and speed as “extremely influential” in where they shopped. And PCA Predict’s own Failed Deliveries study discovered that 57% of consumers are reluctant to use a retailer again if their delivery is late.
All meaning you need to be running a seamless operation just to meet customer expectations, let alone exceed them. And your warehouse management is at the centre of it all.
So here are five smart warehouse strategies you can use to save bags of time in your retail operation. And get those orders out the door quicker than ever before.
1) Pick in batches
There are a bunch of different methods for picking orders. And the most basic one is to simply pick each order one at a time.
This works great when first starting out and only a few orders get processed each day.
But many retailers just stick with this method for way too long. And a huge amount of time could be saved by moving to a batch system.
Here’s how batch picking works:
- Each picker gets assigned a batch of multiple orders they need to complete in one go.
- They move into the warehouse and pick the items – usually with their own picking trolley and a tote for each order.
- Once all the items have been picked, the picker returns to the packing desk ready for each order to be packed and shipped.
- And they receive a new batch of orders to repeat the process with. The number of orders allocated per batch can vary. It all depends on the physical size of your products and the typical number of items you ship per order. But a general rule of thumb is that each batch typically ends up being between 10 and 30 orders.
2) Go more advanced with picking
For even bigger retailers shipping certain kinds of orders, batch picking may not be the most optimal method.
This is usually down to at least one of the following:
- The warehouse and business is big enough to require multiple pickers in order to complete all orders in an acceptable time frame.
- Each order typically consists of a high number of items from various parts of the warehouse.
A simple batch method for these scenarios could potentially cause either pickers constantly getting in each other’s way or items to be mixed up in the wrong orders.
Going for a slightly more advanced method like zone or wave picking would be a possible solution here.
Zone picking would see:
- The warehouse divided up into sections with each picker assigned to their own zone – with them only ever picking items in that zone.
- An order then gets passed through the warehouse to have any required items added to it by pickers in each zone.
- After passing through all warehouse picking zones, the order is passed to the packing desk to be completed.
This is great for preventing multiple picker’s getting in each other’s way and increasing order accuracy. But it can actually create a delay in shipping as each order gets passed between all zones before it’s ready.
Wave picking could therefore see the best of both worlds.
This is similar to zone, but all sections are picked at the same time. All items for an order are then brought to a central desk to be consolidated, sorted and packed.
Here’s an image covering the four main picking types we’ve mentioned so far:
3) Give each SKU a bin location
Breaking your warehouse down into clearly labelled areas, rows and shelves is essential. And makes it so much easier for your team to locate items quickly:
But there’s nothing more annoying for a picker than getting to one of these locations and then needing to manually decipher the correct colour variation. Or sifting through shoes to find the correct size.
It slows them down, wastes time and can also lead to errors.
This is why it’s important to give every single SKU and product variation its own bin or sub-location in your warehouse:
This way, pickers know exactly where they’ll find each product and its precise variants in the warehouse. Allowing them to simply head straight there and pick quickly and accurately each time.
4) Minimise walking time
Research we recently did on 20 Veeqo retailers in July 2017 found that:
- On average, 60% of each retailer’s sales are generated from just 20% of their product catalogue.
- And a massive 60% of a picker’s time is spent simply walking around the warehouse – ‘dead time’ that could be better used.
Meaning there’s a huge opportunity to minimise picker walking and save time by:
- Identifying the 20% of best selling products in your business.
- Arranging them as close to the packing desk as possible.
Using the inventory management technique of ABC Analysis can be really useful here.
Just divide all on-hand inventory into three groups – A, B and C:
A Items: Are of high value with low sales frequency.
B Items: Are of moderate value with moderate sales frequency.
C Items: Are of low value with high sales frequency.
You can then use this as a rough guide to ensure ‘C items’ get stored closest to the packing desk and ‘A items’ are kept farthest away. Like this:
All meaning pickers will reduce the amount of walking they do and get through more orders in less time.
5) Have a set number of box sizes
It’s rare nowadays to find shipping companies quoting based on just weight alone. Most couriers take into account package size and dimensions too.
So the bigger a package is in physical size, the more expensive it will be to ship it with most companies. Here’s how DHL work it:
This means using a box size that’s much bigger than the order requires could be increasing your shipping costs unnecessarily. And this soon adds up when you’re processing hundreds (or even thousands) of orders a day.
Too many box size variations is a perfect recipe for overwhelming packers – and slowing down your production line of orders. So it’s about striking a balance.
The best number of box sizes to store is dependent on your individual business needs. If you’re certain that every order is always the same physical size then having one box size makes sense – and it’s a lot easier for the packer.
But a typical retailer will usually do best with around 3-5 size options. This keeps things simple for packers while still allowing room to minimise shipping and courier costs.
Optimising warehouse efficiency will have a hugely positive effect on your overall success as a retail business. Yet it’s something that takes time and energy investment to get right.
But incorporating these five ideas will result in drastically cutting down on time wasted in your warehouse. And help your team get orders into customers’ hands much quicker.
Guest blog by Matt Warren | Founder & CEO, Veeqo
Matt Warren is the Founder and CEO of Veeqo – a complete management platform helping retail brands sell and ship products everywhere by automating all their processes.