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Warehouse Management PDF
Warehouse Management PDF
www.veeqo.com
CONTENTS
1. What is warehouse management? 02
2. Warehouse Management Statistics 03
3. Arranging your warehouse 04
General warehouse layout 04
Labelling areas of your warehouse 05
How to arrange inventory in the warehouse 07
4. Receiving and managaing new stock 09
5. Warehouse management fulfilment strategies 10
Choosing an optimal picking system 11
Optimising your packing process 12
Shipping your orders 14
6. Measuring warehouse performance 14
Receiving efficiency 15
Rate of return 15
Picking accuracy 15
Order lead time 15
7. Choosing a Warehouse Management System 16
When to upgrade to a Warehouse Management System 17
What to look for in a Warehouse Management System 18
8. In summary 19
retail brand. It’s an area that could either destroy your business. Or
propel it into something customers trust time and time again. 80% of
shoppers
But getting it right is no simple task. That’s why we put together this
rank
complete guide to warehouse management. We cover everything needed
shipping
to run your warehouse like clockwork – from how to arrange it, to best
cost and
picking and packing processes and even choosing an effective Warehouse
speed to be
Management System.
“extremely
BigCommerce’s Omnichannel Retail Report found that: influential” in
80% of respondents ranked shipping cost and speed to be “extremely where they
influential” in where they shopped. With price being deemed the only purchase.
purchasing factor more persuasive.
within your warehouse – and making sure it all runs in the most optimal way
possible.
Warehouse
management
This includes:
means
• Arranging the warehouse and its inventory.
making
• Having and maintaining the appropriate equipment.
sure your
• Managing new stock coming into the facility.
warehouse
• Picking, packing and shipping orders.
operations
• Tracking and improving overall warehouse performance.
run in
• Most high growth retailers would use automation tools (like some form of
the most
......Warehouse Management System) to control this part of their supply chain.
optimal way
possible.
However, there are many aspects that can and need to be considered from a
shoppers bought goods from one retailer in preference to another because the
And Volume Five of that same report claims that 63% say delivery speed is important when
searching for and selecting products, with 77% willing to pay for expedited shipping.
The UPS Pulse of the Online Shopper 2017 reports that 44% of
Temando’s 2017 State of Shipping in Commerce Report claims that 54% of UK shoppers
would buy from a competitor when the delivery service they seek isn’t provided – 10% more
than US buyers.
operations is making sure you have everything in there arranged in the most
Using a grid system makes planning this a lot easier. Space and
walk up and down aisles without getting in each other’s way. And should
names for stock that have been clearly labelled. Your team should be able
to look at your warehouse system and see exactly where any product is Sticking
located. with simple
Practicality is king here. Sticking with simple alphanumeric combinations alphanumeric
makes it easier to understand and decipher for pickers trying to reach combinations
that site location. For example, you can start by simply including labels makes it
for specific rows, shelves and then exact bin locations: easier for
pickers to
So you always know, for
understand
example, that all your blue
the location.
t-shirts sized medium will
How detailed
you go with
And then even larger warehouses may even need to be split up into
labelling
different areas for each row and the facility as a whole:
depends on
the size and
complexity of
warehouse
operations.
How detailed you go with labelling depends totally on the size of your
of other factors. But in short: The bigger your facility, the more in-
warehouse management.
in the most optimal way for your business. But this now raises the
But this can provide some handy information when it comes to this
frequency.
You can then decide that ‘C items’ will be placed closest to the
warrant being stored on shelves above the packing desks themselves. This
means packers can quickly add these into relevant orders and pickers can
focus on bigger items. Finally, you can take this concept another layer deep by
also identifying which products are most commonly sold together. So faster
selling products are stored closer to the packing desk and products commonly
purchased together are stored close or next to each other. Meaning you’re
An optimally
doubling down on reducing walking time for each picker.
arranged
warehouse
DON’T BE AFRAID TO REARRANGE can save bags
of time overall
A small final point in this warehouse management section is this: Don’t be
and severely
afraid to rearrange your warehouse. Yes – it can take time and resources to
reduce costs.
implement and may seem like more hassle than it’s worth. But an optimally
arranged warehouse can save bags of time overall and severely reduce
products in summer become your worst selling come winter, and vice versa.
Or you sell more of specific products on Valentine’s Day or other key retail
line with this when the time comes – moving some closer to the packing
RECEIVING AND MANAGING NEW STOCK There needs to be enough space in your
Stock doesn’t just appear out of nowhere. And so a critical part of and for your team to perform the necessary
and book in new inventory as efficiently as possible. The faster this Record everything
happens, the sooner that stock becomes available for sale. It’s a good idea to record relevant details to
cascade through the remainder of the entire supply chain. Here’s what
Have assigned workers
you need to consider:
New stock needs to be dealt with as soon as
It’s worth noting that a mobile scanner device can make this whole Put away
booking in process much quicker and more accurate. Add any necessary labelling or barcodes
1. Scan a product or purchase order ensuring all new deliveries are correct in
Being able to fulfil orders quickly and accurately is an absolute staple of good
warehouse management. After all, it’s pretty much the entire reason for the
warehouse existing in the first place. Here’s what you need to think about 70% of
when it comes to picking, packing, shipping and your distribution strategy in labour
general: time when
processing
Picking may seem like a simple concept at first. And it is – when you only have
an order is
a few orders to deal with. But this becomes a much different story once you’re
spent on just
dealing with hundreds (or even thousands) of multiple item orders each day.
picking the
In fact:
products.
Research we recently conducted on 20 Veeqo retailers found that 70% of
labour time when processing an order is spent on just picking the products.
warehouse.
So getting a solid picking system in place can have a major impact on overall
distribution productivity.
SEE ALSO: Warehouse Order Picking Systems: Everything You Need to Know
Single order
This is the most basic picking method – typically only used by those just starting out. Quite simply, a picker will pick one order
Best for: Retailers just starting out who aren’t yet big enough to gain the benefits of more complex picking methods.
Avoid if: You ship more than 20 customer orders a day (or plan to in the near future).
Batch picking
The picker is assigned a batch consisting of a number of orders, picks them all in one go and then returns to a packing desk.
The picker will then get assigned a new batch to pick. The number of orders allocated to each batch is generally between 10
and 30. But this really depends on the physical size of your products and average order size.
Best for: High number of orders with single or low number of products per order.
Avoid if: You have a high number of products per order (or are aiming for this in the near future).
Zone picking
This sees each picker assigned their own area (or zone) of the warehouse with them only picking products stored in that
specific zone. An order is passed through all areas to have any required items added to it by pickers in that zone before being
returned to a packing desk.Great for preventing multiple pickers getting in each other’s way, but it can also create a slight
Best for: Retailers typically shipping a high volume of multiple item orders.
Avoid if: You typically ship single or low item orders or have very few pickers.
Wave picking
Similar to zone, but all zones pick at the same time. The various items are picked in the according zone and are then given to
a packer who will consolidate all the separate picks for each order. This is faster than zone, but labour costs increase due to
the packer needing to spend more time combining orders at the end before needing to be shipped.
Best for: Retailers typically shipping a high volume of multiple item orders and still wanting to maintain a super-fast process.
Avoid if: You typically ship single or low item orders, have very few pickers or cost is more important than speed
of dispatch.
Packing is an
opportunity
to make
completely
sure that
OPTIMISE YOUR PACKING PROCESS you’re
sending the
There’s more to packing than just throwing items in a box as quickly as right products
possible. It’s an opportunity to make completely sure that you’re sending the to the right
right products to the right customers and in the most efficient way. Here’s customers
what you need to consider: in the most
efficient way.
Box size: More and more shipping companies are incorporating package
dimensions into their pricing – rather than it being based solely on weight.
individual business needs. If you know every order is 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 manageable for packers while still allowing room to minimise
courier costs.
overall weight of the package (and therefore courier costs) and keeping
Air pillow
Plastic bag filled with air, very lightweight and good
= protection, but require work to inflate. 90% protection
rating.
Shredded wool
Loose fill wool which is lightweight but limited shock
= protection. 60% protection rating.
Packing peanuts
Biodegradable or recycled foam peanuts.
= 90% protection rating.
Bubble wrap
Two layers wrapped around
= products using sellotape to hold. 75% protection rating.
Shredded paper
Cheap and lightweight, but
= limited protection. 50% protection rating.
Crunched paper
From paper dispenser and crunched by packer.
= Limited protection. 50% protection rating.
The next few steps in your warehouse management process are pretty
straightforward:
Tracking performance and working to improve it is essential when it comes to all parts of supply chain management. And
it’s no different when it comes to warehouse management. In general, this is all about two things:
Receiving efficiency
This is quite simply how long it takes for your team to complete the receiving and putting away of a newly delivered purchase
Then again once the stock has actually been put away.
You can then calculate the difference in time between each point and work out an average for the month – allowing you to see
Rate of return
An order being returned isn’t always down to a problem in the warehouse – a customer may have just had buyer’s remorse. So
the key to getting best use out of this is to segment by reason for return. This way, the warehouse or operations manager can
start looking at exact reasons why this KPI may be high and put into place strategies to resolve.
Determine several different return reasons and use the following equation to analyse each one:
Picking accuracy
Tracking and segmenting rate of return properly lets you also analyse picking accuracy – a particularly key piece of data.
To calculate picking accuracy, use your total number of orders in a period along with data from the rate of return KPI in the
following equation:
Picking
accuracy = ( Total no. of orders - incorrect item returns
Total no. of orders ) x100
Order lead time (or average order processing time) is quite simply how long it takes for a customer to receive an order. You
may want to divide this into various categories. For example, international orders, Amazon Prime orders or orders for special
or larger products. But generally, the lower you can get order lead time, the happier your customers are going to be – so long
It’s totally
dependent
on your
individual
business
needs if/
when
Warehouse Management Systems (WMS) or management software of you’re
some kind can basically take a huge chunk of the leg work out of all the ready to
above processes. They’ll automate and digitise as much as possible. upgrade
Making it much easier to: your
warehouse.
• Keep everything organised, tracked and documented.
But it can be tough sifting through all the information to decipher when
manage manually.
• What are your other warehouse KPIs looking like? And how beneficial
How many
team
would improving each one be?
members
• How many team members is it taking to run your current operation? is it taking
And would it be more economical to replace some with a Warehouse to run your
Management System or piece of software?
current
operation?
• How many orders are you dealing with each day? And how much annual
• Have you been achieving growth targets? And how quickly do you plan
a variety of aspects unique to your business. But here are the main things
in the warehouse and by which team member for high-level KPI reporting and
staff accountability.
of plates to keep spinning. But getting it right can be the difference between
System (WMS).
Get these aspects right and you’ll soon be running your warehouse like
clockwork – and fulfilling customer orders quicker and more accurately than
ever before.