It’s strange to remember now that it used to take weeks to get a product in the mail. Today’s online retailers have changed the way we think about lead times. Amazon Prime in particular has conditioned a whole generation of consumers to instant gratification. They’re even considering creating their own carrier. And if you’re not keeping up with the e-commerce leaders, you’re going to get left behind.
Shortening and streamlining the supply chain has been a huge part of that change in lead times. And as you establish and grow an e-commerce brand, your supply chain is one of the most important things people will judge you on. The landscape is changing rapidly—two-thirds of professionals in the fields of logistics, supply chain and transportation say there are tectonic shifts happening.
Fortunately there are ways to stay on top of the changes that are shaking e-commerce. Use these tips to improve your efficiency and provide the best possible service to your customers.
Streamline Your Existing Warehouse Space
If you’ve been using the same warehouse for some years, you can get into the same trouble you have when you’ve lived in a house for many years. Where did that broken lawn mower come from? Don’t know, it’s always been there. There’s a closet full of stuff you probably don’t need, and the couch has been sitting in the same place for a while because it’s too much of a pain to move it from the front room to the den…
Use the same facility for a while and you can get caught in the pattern of old habits and inertia. You might not want to take the time to shut down and reorganize the floor for better workflow, but chances are it’ll save you time and money over the long term.
If you use mobile scanners or RFID, you can use that information to help you plan a more efficient design. Map out your most frequently moved products, the places that touch product the most, where the bottlenecks are—your warehouse management software (WMS) should help. Then you can use that to design a more efficient workflow. It might mean moving around stations, and you may need to spend some time planning for a good moment to wind down and reorganize. But if you do it right those small edges in efficiency will add up.
Increase Picked Orders
Increasing your number of picked orders is key to increasing your efficiency. After all, if you’re picking more products in a day, you’re (hopefully) getting more product out the door.
Organization of the warehouse is key for this. 60 to 75 percent of any order picker’s time is travel. Besides reorganizing the floor for greater efficiency you can take steps like lowering picking locations so ladders and forklifts aren’t needed, separating high-volume products from low-volume and moving oversized and hazmat items into their own zone.
Lift assistance devices can help, too. Think beyond the pallet jack or the back brace—better equipment will save you time and money by avoiding employee injuries. Keeping your employees healthy and able to do their jobs will pay dividends beyond even the number of picked orders. You’ll be a better place to work, lowering turnover and making life easier for the people that do the job.
Invest In Barcode-Scanning Solutions
Most warehouses use barcodes to track product these days, but there are some advances in the past several years that have lowered data entry and increased accuracy. Scanners average one error every 70 million scans, an unfathomably low error rate.
You may have scanners in your warehouse, but it might be worth investing in newer solutions. Wireless scanners that can be carried or hung on a vest have made it much quicker to get scans anywhere. Some newer scanners work at distances from 25 to 75 feet away. And if you really want to go upscale, there are RFID solutions that can replace barcodes that don’t need line of sight and can batch scan.
The more information you can pick up via barcode or RFID, the less you have to process after the fact and the less likely you are to commit errors.
Consider Multiple Fulfillment Centers
Depending on your volume one fulfillment center might not be enough. One of Amazon’s biggest breakthroughs for logistics was spreading its fulfillment centers across the country, lowering shipping time to the end user.
If you’re not able to buy and outfit another warehouse yourself, you might consider 3rd party logistics (3PL). Depending on the provider you can get everything from pick, pack and ship to a fully-integrated solution that takes over your entire logistics operation.
Whichever direction you go, if you’re doing a high volume or need to lower lead times that one warehouse might not be enough. Don’t rule it out.
Nail Down Your Vendor Compliance
On average, 0.6 percent of gross sales per year go towards problems caused by vendor non-compliance issues, according to the Retail Value Chain Federation. Smaller retailers normally just eat these costs, but as your company grows they can become a significant drain on resources and manpower.
Take an audit of your vendors and look for problems. These can include inconsistencies in EDI, with delays and errors coming in as information is converted into a different format. Or there might be delays in processing. Maybe you’re dealing with higher shipping costs because a certain vendor isn’t paying attention to shipping guidelines. Or maybe one vendor has more back orders and lost sales. Figure out where you’re losing money and create a vendor scorecard to evaluate how they’re doing.
One of the best ways to correct vendor compliance problems is to establish a vendor portal with convenient standards, policies and purchase orders available in one convenient place. And if you’re dealing with more problems than you should, maybe it’s time to have some uncomfortable conversations.
Supply chain is incredibly important to the overall health of your e-commerce business. If you can nail it down and increase your efficiency, you’ll set yourself up for success both now and in the future. Use these tips to create a more effective supply chain for your business.
