New studies project that the worldwide retail e-commerce sales will reach a new high of $4.9 trillion by 2021. That is a 265% growth rate, and there are no signs of the growth letting up. This growth applies to both B2B and B2C businesses, with B2B e-commerce projected to be two times higher than B2C by 2020. But growth of e-commerce orders often explodes around a holiday, and businesses need to ready their operations to handle the increase in orders and fulfillment.

What do you need to consider when getting your operation ready for peak season?

Many businesses have warehouses organized to handle large volumes of products, which are then shipped in bulk to brick-and-mortar stores around the country. But with e-commerce orders, which are characterized by low quantities of many items, warehouse operations need to be reorganized to handle the volume of stock keeping units (SKUs) that the business offers — and the speed of fulfillment needed to keep consumers happy.

Prior to peak season, inventory levels often grow exponentially. Managers are taxed with the need to either efficiently utilize their existing warehouse space or rent additional space, which can be costly. Studies show that only 20% of current warehouse space is being used optimally by most businesses. Therefore, it makes sense to maximize your storage capabilities by optimizing your storage utilization.

Optimizing Storage Utilization

Consumers are buying more and more products online, from groceries to automobiles. These SKUs need to be stored somewhere. If renting more space is out of the question, you need to maximize your storage utilization. When warehouse space is utilized properly, space is not wasted, and you don’t have to pay to store air. For example, if the storage rack is positioned to hold a four-foot by four-foot box, but the largest container is only three feet by three feet , then there is empty space that could be utilized by re-positioning the rack. You would be able to store more items in the same amount of space.

Don’t forget to go vertical. Many warehouses and distribution centers have high ceilings. You can actually stack storage racks, one upon another, almost to the ceiling to gain unused space. Narrow aisle pallet racks provide high-density storage from floor to ceiling. Also, aisles can be made narrower so additional rows for storage can be added.

Slotting inventory properly can solve the problem of SKU proliferation and maximize space by improving storage. Inventory can be slotted using a variety of strategies based on speed/velocity of products, item storage (carton, pallet, individual SKU), seasonal usage, etc. In a typical warehouse, approximately 80% of inventory is tied up in slow-moving items. Using high-density storage to minimize the footprint of slow movers means more valuable space, such as end caps and racks closest to the shipping and packing areas, is available for fast-moving items.

Slotting software can determine the best location for each SKU to ensure the item moves easier and faster in the order picking process. Slotting improves storage density, opening up hidden storage space within a facility.

Increasing Fulfillment Speeds

If you compete with Amazon, your customers think one-day delivery is the norm, which can be quite challenging. To compete, warehouse managers need to focus on increasing fulfillment speeds to get products out of the door as quickly as possible. One solution is to use carton flow systems within your picking operations. These allow picking to continue in the front of the rack while replenishment occurs in the back; pickers don’t have to stop picking orders while shelves are restocked.

High-density pick modules are often used in e-commerce warehouses. They are multi-level; a combination of mezzanines, conveyors, carton flow racks, pallet racks, static racks, and other equipment that delivers goods to pickers at each level. By stacking the racks, less space on the floor is taken while pickers can take less time to pick orders from the rack of SKUs that are close by and easy to reach.

Putting products in their optimal locations and labeling shelves reduces search and travel time for order pickers. Don’t mix multiple SKUs in the same bin/shelf. A picker may be directed to the shelf level where the SKUs reside and then will have to search through the different SKUs to find the item to be picked. This reduces picking productivity. Every SKU needs to have its own discrete pick location. Workers will be able to pick products quicker and easier in this format to maximize pick speeds.

Reducing travel time speeds order picking. Travel time accounts for half or more of time spent picking orders. Try to combine orders into a single travel instance to reduce travel time. A warehouse management system and/or order management software can help by combining multiple orders into a single travel trip. Use conveyors to move finished orders to packing stations; once the order is on the conveyor, the picker can start a new order to fill without having to wait.

Labor Shortage

Everyone is talking about labor shortages in the supply chain. The warehouse and distribution center is no different, with order picking labor requiring about 50% of all labor resources in this operation. Training order pickers to pick as fast and accurately as possible is important. Making the job attractive to skilled workers requires higher pay and creative incentives. Making schedules more flexible may help attract more workers; you can offer part-time (20 hours per week) shifts, which may be attractive to retirees and students. Track metrics and celebrate victories – employees like to see how their work contributes to the success of the business. Listen to employees as they may have ideas on how to improve operations.

By improving labor productivity, maximizing space utilization, and increasing fulfillment speeds, your warehouse will be ready to take on the unique challenges of the holidays. It is important to not wait until you are in the throes of the seasons; start now, and you will have a well-oiled machine that enhances efficiencies and makes customers happy.

Brian Chan is a Product Manager at UNEX Manufacturing, Inc., a leading provider of order picking, storage and material handling solutions for distributors, retailers and manufacturers. He is responsible for business development, sales support, and product development of the UNEX SpeedCell Storage Solution.

This article originally appeared in the July/August, 2019 issue of PARCEL.