Today’s eCommerce companies face more significant challenges than ever before, and many are in a rebuilding strategy after COVID shook global supply chain foundations. At the center of these developments are warehouses and their role as a lifeblood in operations, making warehouse operations and warehouse strategy development two of the most mission-critical focal points for the year.
As you look to stay ahead of ongoing supply chain issues and shortages, plus take advantage of the growth in eCommerce shopping and direct-to-consumer opportunities, we suggest that you take a little time to look internally at how your warehouses are running and what steps you might need to make them the most efficient.
To get you started, Red Stag Fulfillment offers five areas to review and discuss with leaders and partners to ensure you have a robust, successful warehouse operations strategy going forward.
1. Understand your people and labor
For a warehouse strategy, people and labor overlap but do have significant differences. You’ll want to consider the team you have, the roles they fill, and the work that needs to be done. Each element has its own best practices and processes that you want management and leaders to understand.
Think of safety in your warehouse operations. Jerome and Jane each need to have the right safety equipment to protect them. They also need to be trained on safety practices for specific jobs, such as packer, picker, or forklift driver. There are also safety precautions for the work itself, such as using one-way aisles and securing any cords to the floor or making lanes only for forklifts and heavy equipment.
Warehouse operations strategies should look at a team from all the ways your people are interchangeable and entirely separate. While you manage labor by ensuring someone can fill every role on a shift, don’t neglect long-term planning to verify that everyone has the right training to be dynamic and flexible for your needs.
Touch base with every worker who is involved with your warehouse. This means everyone from teams on the floor and direct managers to sales and customer service who might ask for order status or see if expediting something is possible. Bring in IT when it comes to the tech you use. Warehouse leaders should know everyone involved in the warehouse’s success and communicate to ensure there aren’t any gaps in preparation.
Regular check-ins help you maintain the right knowledge of your team and warehouse operations, making it easier to adjust a strategy with seasonal shifts, new customers, product changes, and more.
2. Track inventory and other elements
Beyond your people, there’s a lot of data that lives in the warehouse. Inventory levels, sales and order volumes, repeat customers, packaging and equipment used, and much more. Every action that your team takes creates data. Everything a team uses creates data. Those streams are essential and need to be tracked. Surprisingly, during the 2020 madness, many companies began to realize they weren’t tracking much of this information, so they didn’t know how they could respond or adapt to changing circumstances.
Understanding warehouse operations requires a robust set of data. Creating a smart warehouse strategy designed to root out inefficiencies and improve effectiveness leverages that same information. Smart analytics allows you to understand where to position goods, who to target with sales, what product margins keep the lights on, and much more. In many instances, companies find unanticipated costs and business benefits once they begin to crunch the numbers.
Every warehouse operation has a different list of metrics. Start creating yours by seeing what your warehouse tools can track and analyze on staff, orders, and partners. If you outsource, ask for a breakdown of critical metrics and how your partners can help you understand the business. Red Stag Fulfillment works with our customers directly to provide relevant data regularly. We’re also expanding on-demand analytics capabilities so partners can start thinking of their operations at a national or global scale, making informed decisions at every step.
If you don’t have robust data tracking and analytics in place, make it a top resolution for 2021. You can’t get better tomorrow without knowing the actual state of things today.
3. Consolidate actions and data streams
Don’t think of warehouse technology just in terms of expansion. Sometimes, the best tools you or your partners can use are those that consolidate work and eliminate excess. The simplest example is working with a fulfillment company whose warehouse can handle orders from every sales channel you use. When done right, your 3PL will offer a single portal for you to understand orders and inventory levels even as they fill orders from social sales, eCommerce warehouses, Amazon, and other third-party marketplaces.
Warehouse operations should follow an optimization strategy designed to simplify the management and execution of every action in that warehouse. Whether you do your own fulfillment or have an eCommerce fulfillment partner, discuss the strategy and planning for keeping things efficient. You might find existing tools and practices that can reduce costs or best utilize your inventory.
Warehouse management systems (WMS) make it easier to consolidate operations and work quickly with a smaller team. Modern WMS often include analytics tools that can help you determine how your inventory is used, spoilage, loss, and even the optimal placement of goods for pickers. Lane selection and determination ensure a warehouse is engineered for speed and safety, minimizing the number of people needed to fill orders.
As you grow, continue to invest in technologies that support your expansion. It might be time for a WMS that helps you pick in batches or waves or find a partner that can scale with demands as you need. Something as simple as being able to push back the time of day where you can perform same-day, and next-day fulfillment could improve customer satisfaction and push up your margins.
Innovation and technology are linked. Warehouse strategies should invest in tools that help you achieve growth phase goals while also simplifying actions and management.
4. Pair options with flexibility
In our recent thoughts on and lessons learned from 2020, our leadership discussed that one of the best ways to build warehouse operational resilience was to have options. This means multiple suppliers when possible, more than one warehouse location or partner, and the ability to support carriers like UPS, FedEx, and USPS in your warehouse and order software. Simply having another option helped many companies weather the global supply chain storm.
Companies should look to build out a list of partners that can help them respond to unforeseen events in the future. Resilience can even include testing multiple 3PLs to determine how well they perform. Generally speaking, you want goods in multiple locations, whether that’s with two different providers or with a single 3PL that offers separate facilities where a local event (infection, natural disaster, power outage, etc.) doesn’t take their entire fulfillment capability offline.
As you build out your fulfillment strategy and warehouse optimization plans, consider how easy it is to onboard people and partners with your existing processes. Ask questions of yourself and partners:
- Can you support a new carrier, or is there a barrier?
- If you bring in an additional warehouse location or partner, does your technology stack help you deliver the right orders to each?
- Do you track enough information to know when a regional partner offers the backup support your company requires?
- What would prevent you from supporting an additional manufacturer, supplier, or sales channel?
- How is the data shared and collected so you can maintain visibility and operational control?
COVID is pushing many companies to expand their supply chains quickly. It’s the right path to start down. However, you can avoid getting trapped by new agreements or limitations if you ask about growth and flexibility support.
The warehouse is a fast-paced environment that often requires quick decisions. What you can do depends on your existing supply chain partners. What you choose to do, such as which orders to fill or how to distribute them among multiple locations, will impact the other side of your supply chain.
Much of your conversation with partners will be about current numbers and inventory planning, resupplies, and how to handle what everyone currently has. However, that can miss an essential aspect of your relationship: the future. Don’t neglect discussions that highlight where your company plans to go and how others can help.
In a supply chain, the successes of one company generally have a positive impact on their partners. As companies and volumes grow, there’s more opportunity for everyone. Discuss your current growth and plans for the future and see how well partners can support that growth or if they have suggestions for how to achieve your aims. Ask how you can support their expansions. For instance, if your fulfillment partner is growing and may be able to put goods closer to customers on each coast, you can change your warehouse inventory strategy to minimize last-mile costs.
Warehouses depend on using what we all have productively and efficiently. Helping your partners understand your goals brings them in on the planning stage to ensure that. One thing we’ve learned is that warehouses often feel like your own space, but they’re truly the hub for every member of your supply chain.
If your operations aren’t meeting these requirements or you’re not sure about a partner, now is the time to ask. Red Stag Fulfillment offers this fulfillment company questionnaire you can use to measure your 3PL and other partners to ensure that they’re working for you. Download it, use it, and contact us if you have any questions about how to run your warehouse better.