Warehouse is the commercial building where goods are stored in bulk. Manufacturers, retailers, wholesalers, exporters, shipping companies, almost every business group takes the service of a warehouse because they know that warehouse plays an important role in streamlining the process of logistics and supply chain. Apart from that, it saves a lot of time and helps in increasing productivity.
Challenges faced by the retailers
Retail business is growing like a weed. Daily millions of orders are placed and processed to ship. Logistics, supply chain, inventory control, all these processes are getting more complex. Further, retailers are looking for more opportunities to ship the orders faster. That’s why retailers are in need of multi-location warehouses.
But the fact is, managing multiple warehouses can be painful if not managed properly.
Take a look at the actual problem
The first major problem is related to inventory:
If retailers have more than one warehouse, splitting up the product quantities per variant becomes cumbersome. Second, it is found that retailers mix all the SKU’s in a single bin and sometimes, the software they use to manage multi-location warehouse does not best fit their business nature.
The second major problem is related to warehouse:
Warehouse is an important asset of any retail business so, if retailers know this, do they consider each and every aspect before selecting the warehouse location? And after selecting the location, do they follow suitable principles for designing proper warehouse layout?
These are the two major problems faced by the retailers which can be solved with some easy tips.
Properly divide the product quantity per warehouse:
The biggest mistake retailers do is, not maintaining proper quantity across different locations. They equally divide the count of SKUs and later they face problems in getting accurate results of sales and product quantity.
Splitting up the product quantity properly between the warehouse act as a bonus point to the retailers.
You have 3 warehouses, one in Florida, second in Texas and third in California. The one located at Florida looks after the processing of online orders and the rest two looks after the processing of local orders and immediate sales.
Now an order is placed from the online store but in the main warehouse, there isn’t enough stock available. Therefore, you can easily transfer the order to any of the two warehouses. But remember to record or log those transfers to ensure an accuracy of the sales and stock availability.
You have kept separate count of SKUs in different warehouses. Therefore, at the time of evaluating the sales and stock count, you will get accurate results which will be helpful in gaining useful insights on improving online selling.
Don’t mix all SKU’s in single bin:
Every warehouse contains a small separate space known as a bin. It helps retailers in tracking, loading/unloading and spotting the SKUs of different product variants in quick time.
The mistake which retailers do is they mix all the SKUs in a single bin which consumes a lot of labour time. Mixing of SKUs only makes sense for same type or average sized products and not for different product variants.
However, if the need may arise, it is best to create separate bins for multiple SKUs to find them quickly.
Keep the best-selling product near shipping area:
Picking the product from different warehouses that too located at distant places becomes quite frustrating and expensive.
If a retailer is managing multiple warehouses then he may know about this problem very well. Therefore, it is advisable to keep the best-selling product more accessible in order to avoid the treasure hunt which may lead to the slowdown of shipping process.
Keep your warehouse green with lean inventory:
Lean inventory is a systematic approach to enhance the value of the store’s inventory. Lean inventory management system helps retailers to identify and remove the waste from the warehouse and make it spacious for other processes like logistic and supply chain to function smoothly.
It basically follows five principles:
- Value: Before making any major changes in your store, determine whether applying lean inventory management will generate value to your business.
- Flow: Analyse the flow of your inventory from the warehouse. Later, apply Lean 5s principles i.e Sort,Straighten, Shine, Standardise and Sustain to streamline the other processes taking place in your warehouse.
- Pull: Roll out the stock quantity on customer’s demand.
- Responsiveness: Be flexible enough to adopt new changes.
- Perfection: Refine your inventory continuously in order to improve the quality, cycle time and productivity.
Set the product limit for stock-out:
Setting the product limit for stock-out is the safest way to escape from the headache of excessive expenditure.
Your store of international brand of watches sees a heavy sale and therefore, you receive an alert of limited stock. As you had set the stock limit earlier, it became easy for you to replenish the stock on time and continue with the sale.
Product Selling Analysis:
If retailers see that certain products are getting shipped in combination then it’s better to analyze the pattern and make a deep study to make the picking process quick.
If iPhone 6s and Apple watch are getting shipped together, it’s better to place them in one warehouse location in order to save the picking time.
A few expert tips:
Promote the stock availability company-wide:
There are many ways to escape from the hassles of stock-out or overstock in the warehouse. One of the best ways is to update the staff members with the availability of stock. By doing so, retailer and everyone at the store can become alert while receiving the new order.
Your gadget store is the only one across the country to have the latest gadgets. Daily you see a heavy sale of gadgets and therefore you keep on updating the stock count to your staff members.
Now you receive a big order from your eStore. The stock wasn’t available in that quantity, still you were able to ship the order on time and got escaped from the trouble of overhead cost.
Select appropriate location for your warehouse:
Location plays an important role in promoting sales. Retailers study the location and analyse it from the business viewpoint which includes,
– Consumer pattern
– Consumer demand
– Local showrooms dealing in the same market &
– Nearby shipping companies.
Because if retailers don’t analyse from the business viewpoint, though the warehouse is within the budget, it may give negative impact on sales.
Principles to design the warehouse:
It is a broader term which needs to be discussed separately in detail considering different aspects of the warehouse and business nature. But still, we have tried to give a gist of how retailers can plan the warehouse layout design.
There are many principles to design the layout which can help retailers in running effective distribution center. But first, retailers have to scrutinize the basic necessity then proceed with the layout.
Therefore, it starts with:
- Business requirement and its nature.
- The daily activities taking place in the warehouse for order placing, packing, shipping and inventory count.
- The movement of vehicles for loading and unloading of inventory (cross docking).
- Storage space requirement.
- Space to perform fulfillment tasks.
Though, analysing the basic requirement takes a lot of time but this helps retailers in selecting suitable principle to optimize the warehouse functions and improve efficiency.
Managing multi-location warehouse is a tough task and to make the task smooth and easy, retailers need a customized warehouse management software or inventory management software that best fits in their shoes.
Orderhive, the smartest multi-channel inventory management software has all the features wrapped in it helping retailers manage multi-location warehouse easily and efficiently.