Inside Logistics

What’s holding your warehouse back?

Mastering the on-demand, online shopping boom


March 5, 2017
by Chris Anton

The on-demand economy is attracting more than 22.4 million consumers annually and $57.6 billion in spending—with online marketplaces comprising the largest category. This growth is both exciting and terrifying if you’re in e-commerce retail.

Meeting the rising demand for on-demand essentially raises the stakes on your operational efficiency and how you run your warehouse and distribution centres. From managing same-day delivery and global fulfillment, to keeping up with constant diversification and changing product mixes, the consumer desire for convenience is forcing transformation in every facet of the supply chain’s last mile.

Order fulfillment, in particular, plays a significant role in cultivating your brand’s reputation and can be a differentiator or a detriment. For instance, if a customer’s order isn’t packed accurately, the warehouse has essentially diminished that customer’s experience.

Ultimately, delivering on the promise of on-demand means keeping closer tabs on everything including staffing, inventory, shipping and tracking to ensure order requests are met properly. And that, in turn, requires processes and support tools that deliver visibility, agility and scalability to drive higher performance.

Haphazard warehouse operations
Many e-commerce materials management and distribution teams try to patch up inefficiencies within their existing processes and legacy systems to keep up with demand. However, this causes more issues. They create subroutines, or Excel spreadsheets to respond to different areas where information is not getting captured. They then use this piecemeal information to try to monitor and maintain warehouse operations.

This disorganized model—lacking real-time information and integrated systems—could result in costly errors for your business as well as tarnishing customer service. Obviously, speed of response would take a hit, but you also can’t effectively manage things like on-demand global fulfillment using spreadsheets and fragmented data.

You would never be able to accurately maintain various packaging regulations and all the other complexities that come along with serving consumers internationally. It would also challenge your capacity to meet changing consumer demand for additional product lines. Keeping up with changing product mix, item sizes and types would be a nightmare if dealt with manually.

WMS technology can turn it around
As adaptability and responsiveness increase in importance to consumers, materials management and distribution teams are beginning to prioritize investments in better operational technology. Warehouse management software (WMS) solutions are topping their list of must-haves. In fact, according to research conducted by ARC Advisory Group, WMS was the technology most frequently noted as “likely” or “very likely” to be purchased or deployed over the next three years.

Using the right warehouse management technology—the right ways—can improve your ability to satisfy customer expectations and enhance productivity. For instance, a third-party e-commerce logistics company we work with recently adopted advanced WMS to better maintain its client’s warehouses. Ultimately, the insight this technology provided led to the logistics company improving order-picking time by 200 percent for its clients.
The trick is wading through the sea of WMS platforms and finding one that meets your operation’s exact needs. During this evaluation, you should be ruthless. The changing landscape of e-commerce retail and consumer purchase behavior demands it.

Tips for choosing the right WMS
Finding technology that meets or exceeds your functional specs and frees up capital to be invested in other areas of the business can give your organization a competitive edge.

Look for tools that make data capture, maintenance and reporting easy. The technology you use should give you clear insight into everything from inventory and efficiency of material handlers to effectiveness of workflows and processes.

With better data, you and your team can drive process improvement and start to optimize specific areas of warehouse operations like put-away, order picking and shipping. Additionally, whichever WMS solution you choose should also be flexible enough to accommodate things like multi-order picking for enhanced efficiency, as well as sometimes extreme fluctuations in volumes at different times of the year.

Your WMS technology should also be intuitive enough that your team can get up to speed in minutes or hours rather than days or weeks. This is incredibly critical during peak online shopping periods. Even Amazon made significant changes to its warehouse management technology in advance of the holiday shopping season, which reduced training time and saved money.

Better customer experience
Taking the time to course correct now will set your brand up for future success. In the long run, technology and process changes made to better accommodate on-demand e-commerce consumers will translate into overall cost savings for your business and a better experience for your customers.
If you fulfill your customer’s order accurately and on-time, your business will avoid getting inundated with calls to correct mis-shipments and eating the costs of sending out replacement product. Furthermore, your brand will earn a positive reputation for its quality and reliability.

Chris Anton is executive vice-president of business development at Snapfulfil.