GCL Group
Logistics & Supply Chain Consulting

E-Commerce Warehouse Design Best Practices

E-Commerce Warehouse Design Best Practices

E-Commerce Warehouse Design Best Practices

As we were reading few weeks ago, the race is on to develop efficient and optimized warehouses and DC’s to support the E-Commerce business growth. There are multiple best practices for tackling those challenges, here are nine of them:

1- Level out your order volume during the year: We all know that the order volume peaks, during Christmas and Black Friday, impose a lot of stress on the order fulfillment operations. Some companies also create various promotions during the year that greatly impact the outbound volume. Try to better understand these peaks and influence the frequency and volume distribution to level out the warehouse fulfillment efforts as much as possible.

2- If you cannot level out your peaks, try to anticipate the peak activities: For new start-up operations, this process can be difficult but best practices call for a ratio of one-to-five for the peak volumes during the Christmas, Black Friday and Cyber Monday promotional periods. Therefore, try to prepare in advance by pre-packing some products, pre-conditioning items, and if possible, preparing space for the additional warehouse associates, preparation carts and packing tables.

3- Speed-up your order preparation to avoid cancellations: We know that buyer’s remorse is an E-commerce nightmare, by sending status information via your website to your customers, for example “Your order is being prepared by Steven” or “Your order has just shipped”, you will avoid cancellations.

4- Pick batch orders with similar order profile: Accumulate orders in your systems, analyse the profiles and create batches with similar profiles, same SKUs for multiple orders, single line orders, SKUs with same characteristics or same zones in the warehouse. All those criteria will work in your favor to minimize travelling distance and optimize picking productivity. It is worth mentioning that this best practice is in conflict with point #3, you know best who your customers are and how they react, therefore you are the most knowledgeable person to make that decision.

5- Pick, Pack & Ship in the same process: Because of low SKU and unit count per order, it is easier to pre-select cartons and pre-print shipping labels on cartons before the picking process begins. After picking the order, the next step is simply to close the boxes and sort to the proper carrier locations, instead of going through managing pick bins and packing boxes at a station. To adequately perform this step, detailed information on SKU dimensions and weight is critical, as well as your carrier selection process according to postal codes. With a good cartonization WMS module, you can eliminate many steps to speed up picking and packing.

6- Prepare for personalization: As many E-Commerce operations tend to differentiate themselves from competitors, personalization is becoming the norm. In order to avoid low productivity rates or long lead times, prepare in advance by pre-conditioning item or pre-packing promotional items and literature.

7- Pre-sort for shipping: Make sure your warehouse operation includes a pre-sort process to speed-up carrier pick-up, improve carrier sortation delays and lower your shipping costs. This practice is often forgotten in the negotiation process with carriers.

8- Plan for returns: Since E-Commerce businesses come with various levels of return percentages, make sure you plan your returns process in advance. Pre-printing return bar codes on boxes will ease the content identification, coupled with item pictures at receiving, your personnel can easily qualify the product to be destroyed, returned to supplier or returned to stock.

9- Partner with best-in-class carriers: These carriers offer flexibility, various delivery program offerings, best-in-class traceability and understand the E-Commerce challenges.

These are only a few tips on how to design, improve and simplify your E-Commerce order fulfillment process. Of course various other improvement opportunities exist across various industry sectors, but these nine are a good start in your improvement journey.

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