This article originally appeared in the 2018 September/October issue of PARCEL.
Two years ago, during the Black Friday weekend, US online sales reached over $5.27 billion, which was a 17.7% increase year-over-year. More and more consumers went online and set a new record for purchasing their holiday gifts. However, when it came time for gift giving, many recipients were left empty-handed due to chronic out-of-stock issues at many retail companies. Because of this, retailers have been adding technology and streamlining processes to make sure this fiasco doesn’t happen again.
During the holiday season, more merchandise runs through your warehouse. From an increase in products at the shipping docks to the massive amount of orders out the door, you need to keep things flowing. Bottlenecks in your warehouse operations must be avoided. Ever increasing stock keeping unit (SKU) numbers and “piece” picking requirements combined with rush orders and an influx of temporary employees can spell disaster for retailers trying to keep customers happy during the all-important holiday season. With so much at stake, operations managers are looking for new tools to gain a competitive edge and to be better prepared for the upsurge in orders.
As another hectic holiday shopping season approaches, it’s time for warehouse, fulfillment, and logistics providers to ready their operations. With the holidays being the busiest time of the year for retailers, it is imperative that you update your operations with state-of-the-art processes so you can keep up with orders and ensure your customers get what they want. Whether you’re replenishing stores or shipping direct to the consumer, your distribution operations must be in high performance mode and ready to handle peak volumes. Improvements should focus on product workflow, efficiencies, storage capacity, and space utilization.
Optimizing Product Workflow
Retailers need to optimize their warehouse layout for maximum efficiency and incorporate best practices learned from previous holiday seasons, such as placing fast-selling items closer to pickers. Understanding the inbound and outbound operations of the warehouse is key to success, along with maximizing space utilization while saving time and reducing errors as products are moved in and out of the warehouse.
Workflow can be optimized if you reduce product handling, unnecessary worker movements, and travel time when retrieving parts and products. Put faster-selling items closer to the ends of the aisles to reduce walking distances. A SKU analysis tool can be used to evaluate inventory and throughput to identify seasonal items and determine where they should be stored. By identifying these throughputs, it can help you determine the correct storage for each product. Your slowest movers can be stored in static storage like shelving. Your medium movers can be stored in carton flow, while your fastest movers are often best left palletized to avoid double handling.
Choosing the proper type of storage system is essential to warehouse workflow efficiencies. Look at what is being stored, how much is stored and how often it will be accessed determines the right storage system to use. Product expiration dates, temperature requirements, and product demand must be factored into selecting the right storage system. Before choosing a system, all product sizes, shapes, and weights should be noted and compared to the weight and size capacity of the storage unit. The width of the rollers or use of wheels will affect contact, efficiency, and cost.
Maximizing Efficiencies in Order Picking
Most warehouses use a variety of order picking solutions within their operation, including carton flow, static storage, and pallet flow. As order picking is one of the most costly activities for a warehouse, supply chain managers today are focusing on improving these processes and lowering costs, while improving customer service levels. Choosing the best order picking solutions for you depends on any number of requirements such as cost, complexity, the number of customer orders, size and number of items, etc. Every business has its own unique requirements and a mixture of order picking solutions may be the best way to fulfill orders.
As 60% of a picker’s activity is attributed to travel time, reducing this time can speed fulfillment. Re-slot pick positions to reduce travel times. Do this often — don’t just do it once and leave it that way. As new products enter the warehouse, you’ll want to re-slot to keep items in the optimal location.
Using a first in, first out (FIFO) system, customers can improve their bottom line by cutting down on lost product due to spoilage or missed expiration dates. The FIFO system means newer products are stocked behind older merchandise, which improves storage and picking because both operations can take place at the same time with loading occurring in the back and picking from the front.
Carton flow racks have a high order picking rate of up to 150 picks an hour, but combined with a pick-to-light system that uses lights to show workers what items and how many to pick, you can increase pick rates by three-fold. Flow racks allow warehouses to store a mix of fast-moving and slow-moving items in the same rack — allowing pickers to quickly pick a variety of items from the same area. Tilted shelves help speed order picking too. With tilted trays or knuckled tracks that present products to pickers, allowing them to see what they are picking, you can improve order fulfillment times and eliminate errors.
Improving Storage Capacity
When trying to look for ways to improve the efficiency of your warehouse, a good plan is to understand the way that shelves and space are being utilized. The placement of shelves and containers, along with the traffic patterns and total design of the building, ultimately affects the ability for you to utilize any space available.
Keeping boxes, cartons, totes, etc. off the floor not only looks better, but it allows workers and equipment to move without obstructions in their path. Make sure you put away every received delivery the same day to avoid cluttering aisles.
Use a dynamic storage solution that allows you to utilize the entire rack depth of the pallet. Many companies just use the front part of their shelves to store products because they are easier to reach. With a storage system that flows products forward, pickers can quickly and easily reach products as they move forward when ones in front are picked. Most importantly, be flexible, but be ready for anything to happen. And you can be ready by being organized – have products at your fingertips to fulfill orders to keep your customers happy.
To accommodate additional orders during the holiday season, companies must first accommodate that additional volume, along with loading and unloading of trucks, staging and sorting, and accumulation. One way to ease the stress and accommodate that extra volume is to use a flexible gravity conveyor system, which can be set up as a temporary ship line by placing it between the back of a truck and the storage area. Choose one that is portable and easy to set up, tear down, or move around as necessary. Because it uses gravity to move packages, there are no moving parts or power restrictions. Parcels can come immediately off the truck and moved to shipping operations or placed onto shelves for storage.
Improving Space Utilization
Warehouse space is becoming a premium in today’s fast-paced e-commerce world. Building a new facility is expensive. Expanding an existing one is time-consuming and costly. A warehouse that is too crammed with products is inefficient. The answer is that instead of worrying about finding a new warehouse location, you could try to optimize your existing warehouse space. You can eliminate dead zones in the warehouse — empty pallet rack space — by maximizing space utilization within existing pallet rack. Instead of lining a shelf with one SKU, you can load all those SKUs behind each other and let them flow forward to your order pickers, allowing more SKUs in less space. This will help maximize space utilization while reducing travel time and distance between picks.
The holidays are busy, but adequate preparation and foresight can help warehouses run efficiently to get orders out the door to satisfy customer expectations.
Brian C. Neuwirth is VP of Sales and Marketing at UNEX Manufacturing, the trusted industry leader in order picking solutions that maximize space usage, increase pick rates and improve ergonomics. Visit www.unex.com for more information.