eCommerce sales are expected to grow to more than $400 billion in the next several years, with Forrester Research estimating $414 billion in sales in 2018 and eMarketer estimating $491.5 billion in 2018.
I frequently work with companies trying to optimize operations for their busy season while managing the growth. Many of these companies have both a wholesale distribution and an eCommerce fulfillment component. Through this work I’ve identified a short list of things to consider to help you efficiently manage through the busy retail shipping season as your eCommerce channel grows.
- Prepare for lumpy demand. eCommerce consumers will typically place orders over the weekend when they have time to surf the internet. As a result, come Monday morning you will see a spike in orders. This is even more amplified if you do not have 24/7 operations.
- Expect more single-line, single-unit (SLSU) orders. Sure, it sounds intuitive, but I am still surprised by how many companies don’t appreciate the volume of SLSU they will (or already) face. Regardless of your current eCommerce business, I encourage you to step back and analyze 6-12 months’ worth of order history to identify the different order types you need to manage.
- Pre-pack to the forecasted SLSU demand. You’ve probably placed a one-item order with Amazon. Chances are the item arrived in a small plastic Ziploc-type bag with a barcode on the outside of the bag. Companies are attempting to expedite the pick, pack and ship process by pre-packaging and pre- (product) labeling goods prior to put-away. This adds steps to the inbound process but significantly improves outbound efficiencies, especially if you have an integrated shipping system. Rather than going to a pick bin, pulling one product from a case or inner-pack and moving the product to a pack station for shipment prep, the operator picks the pre-packaged product and moves the order to a waiting ship staging lane. This is very efficient if you’ve done the prep work.
- Manage orders by type. With an understanding of your order types you can begin to group the orders for release to the warehouse for picking in an efficient pick workflow. You should be able to categorize and sort orders using an order work center in your warehouse management system (WMS). A good order work center will allow you to sort on multiple criteria, including ship via, ship destination, order size, etc.
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- Create multiple picking workflows you can use on the fly. Even if you are a pure-play eCommerce internet fulfillment company, you will eventually face the challenge of picking larger orders with specific compliance label requirements. It’s only a matter of time before ownership reaches for the Amazon shining star to open the sales floodgates (caution: it is easy to drown in the shipping compliance complexity required for many Amazon shipments). And selling through Amazon or other channels could help level the workload across the week, countering the effect of weekend ordering. Whatever the reason, you should have multiple pick workflows you can use as needed to optimize the pick process around SLSU and mixed unit of measure orders.
- Establish a supporting replenishment strategy. Most efficient eCommerce fulfillment strategies will have some form of forward pick/reserve storage processes. In this process bulk product is stored in overstock (reserve) areas of the warehouse with smaller amounts of inventory (typically measured in hours or days-on-hand) stored in compact, more manageable forward pick areas. To support the picking efficiencies expected with this strategy, you will need a solid inventory management workflow (replenishment) to ensure the forward pick bins continually have enough product to satisfy forecasted order demand.
- Support multiple pick workflows with integrated shipping. An eCommerce fulfillment warehouse – or any warehouse – should consider shipping an integral part of fulfillment. Too many warehouse operations set up shipping as a separate workflow with different systems, personnel and processes. Having a ship system fully integrated into the warehouse system will provide you the ability to efficiently manage the growing number of SLSU orders you will face (think picking to a pre-printed ship label and system shipping upon pick completion).
- Let’s say your product line becomes the next big thing… Chances are you will be enticed by the opportunity to sell your hot product through other channels besides your own website. Target.com, Walmart.com, Wayfair and Amazon may want to help your cause. But if you are tasked with fulfilling their demand, you may need to provide an Amazon (for example) specific pack slip and ship label to make it appear the shipment is coming from Amazon. Are your systems capable of creating custom pack slips and ship labels?
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Hopefully you feel more confident about your preparations for the busy season after reading this post. I wish you the best of luck!