There is nothing new about warehousing. Written records from ancient civilizations refer to the storage of items in bulk so that they can be used at a later date. The Bible records Egyptian people storing the surplus of agricultural goods so that they could be used in times of famine. Whilst a modern warehouse clearly does a lot more than stockpiling food, the principle remains, including the warehouse role in fulfilment.
Merchandise warehousing can be defined as “the storage of commodities and products for profit”. Here we take a closer look at the role that a fulfilment warehouse plays in the modern distribution process.
Warehousing – the basics
Warehousing plays a vital role in the fulfilment process. Without a warehouse, there is nowhere to store physical products before they are dispatched to the final consumer or to another distribution centre. A warehouse provides a secure and safe place to store goods in an organised way along with the warehouse role in fulfilment.
In a well-managed warehouse, as a minimum, there are clear records of:
- · What is being (and has been) stored
- · Exact location of the goods within the warehouse
- · Date the goods arrive
- · Where the goods arrived from
- · How long the goods have been at the warehouse
- · Quantity of individual items stored
Keeping records of the above is called a warehouse inventory. In traditional retail operations, goods are eventually shipped to a bricks and mortar store. In ecommerce, goods are shipped directly to the consumer once an order is placed online – this makes the warehouse central to the order fulfilment process.
However, warehousing itself is usually limited to storing an inventory for a certain period of time and does not include additional services. These are supplied elsewhere in the fulfilment process.
How warehousing fits into the ecommerce fulfilment process
Ecommerce fulfilment is the process whereby a click online by a consumer results in a product arriving at their door. This process requires several elements and warehousing is one of them. This is how they fit together:
- · Shipping inventory: goods are shipped to the warehouse. The warehouse needs to know the nature and quantity of goods arriving
- · Storing inventory: goods are received, arranged and stored
- · Distributing inventory: goods are picked up by carriers to be taken to the consumer
The role played in this process by the warehouse can be summed up as:
- · Recording the exact location of every product
- · Recording the exact number of units stored
- · Responding to product safety recalls
- · Removing expired goods
- · Identifying and dealing with damaged goods
- · Shipping oldest goods first
- · Receiving tracked returns
It is at the warehouse that the volume of goods and the labour needed to handle them will be forecasted. Safety will be ensured through training, safety equipment and by obtaining the appropriate certifications and licenses. A big part of this is maintaining compliance with the requirements set out by regulatory agencies. Management has to adapt as the business grows in size and/or complexity.
In order to keep the goods both secure and accessible, bins and other storage equipment will be set up. The layout of these is key to ensuring efficiency and speed.
Warehousing logistics describes the processes and people that keep items moving smoothly and efficiently through the warehouse. Logistics allows the warehouse to perform its function in the fulfilment process. There are three elements to warehousing logistics.
Managing the warehouse
This is all about the day-to-day operation of the warehouse. It includes overseeing what staff are doing and ensuring that they are appropriately trained. It also includes keeping a check on the goods and maintaining both the safety and security of the site.
Compliance with relevant laws and legislation is a minimum but pursuing best practice is a more desirable approach. Management at the warehouse need to maintain good working relationships with both suppliers and shipping carriers.
Maintaining efficiency of warehouse operations
Warehouse operations are the processes that are involved in moving goods and tracking inventory. The efficiency of warehouse operations is crucial to the success of the wider fulfilment process- efficient fulfilment needs an efficient warehouse. Efficiency at every stage of warehousing (receiving goods, placing and distributing) is necessary.
Studies of warehouse efficiency have found that it is influenced by a number of key factors.
Top of the list is order structure, particularly that of the outbound flow. Research has identified some ways in which warehouse efficiency can be improved. These include:
- · Changing the order structure by raising the average number of lines in an order
- · Making the size of the picking lot bigger
- · Automation to make the picking process more efficient
- · Improving IT and control systems
An efficient warehouse brings many advantages to the fulfilment process. It keeps costs low and ensures that goods are shipped on time which protects the reputations of the suppliers.
When a warehouse is efficient, it ensures that the staff are being productive and that there are always sufficient quantities of goods in the locations that they are supposed to be. The equipment is fully utilised. All of the storage is fully optimised but aisles are kept clear. Ultimately, this results in happy customers who receive the goods that they want when they want them.
Warehouse management systems
For a warehouse to successfully complete its function in the fulfilment process, it needs a good warehouse management system. These days this is always computer software that manages the warehouse operations without reliance on manual processes. These management systems have been designed to optimise the tasks of tracking, operating, distributing the workload and distribution.
The advantage of an integrated warehouse management system is that it gives complete visibility and transparency in real-time into what is going on in the warehouse.
Most will automate the process including producing electronic picking lists designed around the locations of storage within the warehouse to improve efficiency. Staff will be directed to goods that are close to each other to save them wasting time crisscrossing the facility on multiple occasions.
- Research on Factors Affecting Warehousing Efficiency. AU – Aminoff, Anna, Kettunen, Outi, Pajunen-Muhonen, Hanna. International Journal of Logistics 2002 https://www.researchgate.net/publication/233307323_Research_on_Factors_Affecting_Warehousing_Efficiency
- Warehousing: Origins, History and Development in Practical Handbook of Warehousing. Kenneth B. Ackerman. Springer Link 1990 https://link.springer.com/chapter/10.1007/978-1-4757-1194-3_1