Remember when all Amazon did was sell books online? Things have changed a lot since then. The meteoric rise of ecommerce is undeniable, and will likely only continue to grow. In fact, experts are predicting that US online sales will reach $1.14 trillion this year alone. And with that growth, comes the need for warehouses to keep up, to ensure they’re doing all they can to meet increased ecommerce demand. So, what effect is ecommerce having on the supply chain? Let’s dig in.
Ecommerce Defined
We all know that ecommerce is the buying and selling of goods online. These sales can occur through websites, mobile apps, or other online marketplaces. With increased ecommerce sales comes an increase in customer expectation for responsive services, faster (or free) deliveries, real-time order information, and closer attention to parcel management, it’s a lot to keep up with.
And then there’s the fact that online purchases usually have fewer items per order than traditional orders meaning that ecommerce orders require significantly different, more complex picking strategies. According to Statista, in 2022, the average number of products bought per e-commerce order was 3.12. Piece-picking single items requires more time and is far more labor-intensive than handling cases or pallets of product.
We can safely say ecommerce is here to stay, so what does that mean for your warehouse?
Foundations of Successful Ecommerce Warehouse Management
To effectively manage an ecommerce warehouse, you need to focus on several key aspects. The ability to maintain accurate real-time inventory records and effectively prioritize and process orders based on customer demand are key. A Warehouse Management System (WMS) is an excellent place to start. A WMS helps businesses manage their inventory and warehouse operations by tracking the movement of goods throughout the warehouse, from receiving to picking to packing to shipping.
Efficient storage and organization is also key. Optimizing your warehouse layout for easy access and using suitable shelving and storage solutions can reduce travel time and increase picking efficiency. While implementing a modern WMS and redesigning a warehouse often yield big benefits, some operations may find a need to make other changes, like adding automation.
Embracing Technology: Automation Options for Ecommerce Warehouses
Depending on the kind of warehouse, adding automation and technology can help operations meet the demands of ecommerce. There are a variety of technologies created to improve productivity in the warehouse, like goods-to-person technology (GTP) which uses automated systems to deliver products directly to the operator’s pick station, as opposed to having the operator travel to where the product is housed. Often selected for its dynamic functionality, efficient use of space, and improved work environments, GTP can also easily be integrated with other automation technologies and warehouse software for even greater efficiencies. These technologies include:
Automated Storage and Retrieval Systems (AS/RS) — Automate the inventory process by retrieving goods for shipment/use and returning items to their proper storage locations.
Automated Guided Vehicles (AGVs) & Automated Guided Carts (AGCs) — Like a self-driving forklift that transports inventory from one location to another within the warehouse.
Autonomous Mobile Robots (AMRs) — Transport inventory and materials throughout a warehouse autonomously.
Articulated Robotic Arms — Robotic limbs with multiple joints and articulated robotic arms move and lift items.
Unmanned Aerial Vehicles — Commonly known as drones, when equipped with RFID technology, they can provide real-time inventory visibility within the warehouse.
Artificial Intelligence (AI) — Some businesses are also using AI and machine learning (ML) to help forecast demand and optimize inventory levels.
The important thing to remember is that not all robotic technologies will be right for your warehouse. You want to understand what impact ecommerce is having on your operation and determine what technology (if any) will be successful in addressing the issue. You don’t have to add technology for the sake of adding it. The key is to identify a solution that best satisfies the defined requirements of your business, both quantitatively and qualitatively.
Transitioning to Omnichannel Fulfillment
Focusing beyond ecommerce and considering a true omnichannel strategy is key. Today, more and more customers are shopping across multiple channels, with the expectation that information across all channels is consistent and reliable. This means warehouses are going to be faced with the need to fulfill orders from multiple channels seamlessly, which means flexibility is a must.
In omnichannel warehouses, a variety of order sizes are shipped simultaneously. It’s common to have the same product (SKU) available in multiple units of measure (UOM) options, such as full pallets, full cases, inner packs, or individual items. An operation’s ability to remain nimble and determine the most efficient order picking and shipping method for each order is key to success.
Has your business been impacted by the growth of ecommerce, and are you keeping up? One of the best ways to learn if your operation can handle omnichannel fulfillment is with an operations analysis, our bread and butter. Reach out and let’s see how we can help you make the most out of your supply chain. Let’s talk!