The concept of warehousing is not new. However, technological advancements have changed some of the processes. These changes have ultimately created a more streamlined procedure for your eCommerce business—resulting in lower logistics costs and more efficient operations.
Though the COVID-19 pandemic has caused disturbances in the production process, product demand has not decreased. That’s why it’s imperative that your business has a solid understanding of the key warehouse processes. Let’s dive in.
6 Fundamental Warehouse Processes
Optimizing these six fundamental warehouse processes will enable you to streamline warehouse operations.
During the initial receiving process, the warehouse must verify it has received the correct product from the suppliers (including quantity and condition). If an item is not up to the agreed-upon quality standards, the warehouse should report discrepancies and detail any missing products.
This step is often considered the most crucial, as failing to report errors will have an impact on all subsequent warehouse processes.
After the warehouse completes the receiving process, the putaway staff controls the movement of goods from the receiving dock to the appropriate warehouse storage location.
It is important that the products are quickly put away in the proper location, while ensuring that the products are not damaged. If done properly, products are easier and faster to find, track, and receive—which maximizes the warehouse storage and increases labor efficiency.
During the picking process, the warehouse fulfillment team finds and collects products to fulfill customer orders. Though this part of the process can account for an estimated 55% of total operating expenses, there are ways to streamline this process to achieve higher accuracy and reduce costs.
Though each case may require a different strategy, some ways to increase warehouse efficiency include:
- Introducing technologies such as mobile and wearables to allow pickers to interact with the warehouse in real-time.
- Utilizing barcode scanners to improve picking accuracy.
- Assessing the warehouse layout to ensure inventory is stored in an organized manner. For example, this may include storing the highest volume inventory toward the front of the warehouse.
After picking is complete, the fulfillment team consolidates the picked items in a sales order and prepares shipment to the customer. The primary goal of packing is to handle the items with care, ensuring there are minimal damages prior to the items leaving the warehouse.
In the United States, shipping damages account for $1 billion a year, so it is imperative the warehouse team checks that the appropriate packaging is used, minimizing damage and controlling packaging costs.
Click here to learn more about the importance of packaging, including tips on dunnage and shipping labels
After the items are carefully packed and appropriately labeled, the goods are ready to leave the warehouse and be dispatched to the correct customer address. It is the fulfillment team’s job to check that the order has been sorted, loaded, and shipped to the correct address in order to avoid customer complaints (which can become costly mistakes). Additionally, if the products have been scheduled to be delivered at a specific time, the fulfillment team should manage the dispatch accordingly.
The shipping process is not deemed successful unless the products have gone through transit and safely found their way to the customer in a timely manner. The completion of processes 1-4 are critical to the success of the shipping process. The efficiency of the previous steps plays a huge factor in the dispatching of products.
In a perfect world, all customers would be content with their purchases. However, the returns process is a reality that your team should be prepared for. If your team has a streamlined process for receiving, putaway, picking, packing, and shipping, but does not have a streamlined process for returns, the efficiency of the warehouse could suffer.
Whether you partner with a third-party fulfillment company to help handle your returns or you choose to manage the process yourself, the most important thing is that you track when a return is requested to ensure that your warehouse processes run smoothly – remember, they will need to restock the item in your warehouse!
There are three main takeaways when it comes to understanding warehouse processes:
- Hire Experienced Workers. At the end of the day, the most important part of optimizing warehouse processes is hiring workers that you can trust to get the job done efficiently. Hiring experienced workers means you’ll likely have faster pick and pack times, reducing your chances of having slow, incorrect, or damaged shipments.
- Stay Current. It is also important to check in on your workers to ensure they feel comfortable and confident. This includes ensuring they know how to use any software the warehouse has implemented, checking in on their organizational skills, and promoting keeping up with the latest industry trends. As previously mentioned, the warehouse industry has seen great technological advancements, so you want to be sure your team is keeping up with said advancements.
- Audit Your Processes. Lastly, if you create a team that you trust, you should be able to ask them for suggestions for improvement. Because the team will be working with the warehouse processes firsthand, they will know best whether or not new strategies would better optimize the process.
It may be beneficial to partner with a third-party logistics (3PL) company, like Deliverr, to audit warehouse processes so that you’re relying on experts to help monitor your practices. Whatever method you choose, always remember: Try to audit your processes roughly every six months!