Date: April 27, 2020
Since the beginning of 2020, order volume processed through our WMS has increased to 174% of its original amount. This is a massive shift from what we’ve seen in the past.
So when a surge of unexpected order volume comes through your warehouse, what do you do? Do you just suck it up and do a little bit of extra work? What if that order volume continues beyond a single instance? If it’s a week? Two weeks? A month? How long before “a little extra work” reaches the limit of what you can process effectively? And how long before your customers notice a drop in performance?
All the questions above describe busy ecommerce-focused 3PL warehouses every day, and because it is seldom the same situation, often times the solution isn’t so clear. Regardless of what situation you find yourself in, one thing remains the same. It helps to have a game plan.
Below we’ll discuss one of our key resources to help 3PL warehouses prepare for increased order volume, and some of the ways to improve processes and scale operations.
For nearly 15 years in warehouse logistics software, 3PL Central has been working alongside and partnering with 3PL warehouses. During this time, we’ve accumulated warehouse process best practices for efficiency and optimization of fulfillment warehouse workflows. Everything from which techniques can be most effective for improving order speed, to the actual percentage adjustments that could be gained from implementing certain practices.
Below are a few best practices to help you get started.
Did you know that warehouses that switch from excel based systems to automated inventory management systems can gain 10-20% more space in their warehouse for inventory? Imagine what you could do with an extra 5, 10, or even 20 thousand square feet to hold merchandise for customers. An optimized space will allow you to do more with less and can drastically increase the limits of what your space can handle from an order volume perspective. And with 3PLs handling ecommerce experiencing on average an 81% increase in order volume this year, there’s a good chance you’ll need all the space you can get.
But the question then goes to: what automated software do you need?
The answer, a cloud-based warehouse management system. This is absolutely the first step in optimizing your warehouse, as moving from manual and Excel-based systems to a paperless warehouse will provide you with greater data on the more subtle ways to improve efficiencies.
Processing orders immediately through shopping cart integrations represents another huge area for optimization. From the moment a customer clicks the order button, your warehouse should have real-time visibility so you can begin processing and shipping that order.
Back in the day, when an order came into an ecommerce site, it had to go through several people who processed the order and sent along information about what to pick, how to pack it, and where to ship it. Each warehouse worker had lag time between the moment they received the notification, and the moment they passed the information along to the next person in the supply chain.
Now, shopping carts on a website directly connect to the warehouse, cutting out the middlemen, and dropping the time to process online orders to less than 1 minute.
To do this, an ecommerce 3PL must utilize direct connections to shopping carts, API, or EDI integrations to connect their warehouse to the online storefront where the end customer is purchasing the product. It’s an absolute necessity for any warehouse that manages ecommerce inventory, and it’s an absolute game changer when optimizing process time and meeting customer SLAs.
Increasing efficiency when picking and packing each order is the third pillar of efficiency for ecommerce warehouses. We have seen an 81% increase in order volume over the same time last year and the highest order volumes per 3PL ever outside of Black Friday in 2019. This translates to tremendous individual orders that need to be picked, packed, and shipped to end users in a timely manner.
One thing you can do to help this process along, is by optimizing the layout of your warehouse. In following the 80/20 rule, you can create major gains in efficiency by grouping together the 20 percent of your SKUs that complete 80 percent of your orders. This cuts down on travel time for your pickers. Be sure, however, that the 80/20 area or zone is properly designed to accommodate high-volume activity and doesn’t cause congestion for other pickers.
Another tactic to improve picking efficiency is to audit the time spent on fulfilling orders. See if packers are forced to walk around or reach for additional items on a regular basis when picking. If orders are taking more than 10 seconds to fulfill on average, determine why and take steps to alleviate this unnecessary time spent. Warehouse management systems like 3PL Warehouse Manager can help give warehouses visibility of their operations to identify methods to optimize inventory management efficiencies.
With ecommerce order volume on the rise, it’s crucial now more than ever to ensure every facet of your warehouse is optimized for peak performance. We went over just a few optimizations that warehouses need to think about, but believe it when we say there is plenty more to do. To find out the remaining best practices to adjust to this new order volume, download the peak season playbook. A resource filled with actionable information to ensure the success of your business during these trying times. Download the peak season playbook here, and start playing in the big leagues.
Daniel is an experienced digital marketer, having formerly worked for some of the biggest digital marketing agencies in Southern California. Now tackling the logistics industry, he specializes in utilizing the right medium to find and show customers WMS solutions to pain points they face every day.
3PL Central provides cloud-based WMS solutions for 3PLs so they can transform paper-based, error-prone businesses into service leaders focused on customer satisfaction, efficient operations, and growth.