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By Brian Neuwirth

OPTIMIZING YOUR WAREHOUSE IN TODAY’S E-COMMERCE WORLD

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-commerce is rapidly overtaking brick and mortar retail sales, with US online sales reaching $409 billion in 2017 and a projected $462 billion this year, as stated in a report by Statista. While sales are exponential in many e-commerce businesses, there are a number of issues that these companies still face, including: Last-mile delivery challenges to reduce costs and meet quicker delivery times Speeding throughput in the warehouse or distribution center Labor shortages Change of order type from shipping volume for distribution or storefront to keeping up with growing volume of orders of smaller items Improving efficiencies and productivity in the warehouse Managing the proliferation of stock keeping units (SKUs) Fulfilling orders that originate directly from the online customer is a much different proposition than replenishing

brick and mortar stores. Typically, merchandise is sent in bulk shipments to the stores to replenish inventory. On the other hand, online order sizes are very small, often a single unit. These orders are then shipped directly to the customer rather than in bulk to the store. A WHOLE NEW BALLGAME Initially, warehouses were built to carry inventory for stores, which was shipped in volume on pallets to the stores. The warehouses were not located close to customers, were quite large, and built in the middle of nowhere where land was cheaper. These traditional warehouses had storage areas, packaging stations, order fulfillment stations, and loading/ shipping docks where products were shipped out of the warehouse on pallets. These warehouses were not built with the speed required to meet the high-volume, rapid replenishment model. With the growth of e-commerce orders, distribution centers (DCs) have had to change their operating procedures. With storefronts closing, DCs that service only brick and mortar locations

must change their order fulfillment processes to keep up with the increase of picking greater volumes of individual items. In this scenario, all the resources of the supply chain are focused on transparently serving a single shopper who has placed a single order. Large warehouses are being retrofitted to handle e-commerce orders along with store replenishment. If orders are going to be fulfilled from an existing distribution center, retailers need to make sure they have enough room in the DC to handle this increase of single orders. Individual orders typically use carton flow or shelving systems, which are designed to present the product to the order picker so the worker can select an individual piece without interference. After being picked, the product is placed into a tote or master carton and transported via conveyor or cart to the next stage of the order picking process. A newly built e-commerce warehouse must carry a much larger volume of SKUs than the traditional warehouse, so there must be more storage space available, along with order picking

PARCEL July/Aug 2018  

PARCEL July/Aug 2018

PARCEL July/Aug 2018  

PARCEL July/Aug 2018