Optimizing Warehouse Operations Ahead of Peak Season

warehouse optimization

Summer is officially here, and for many people, that means planning trips to the beach or backyard cookouts. For those running an e-commerce business, however, it means preparing for the next peak season, whether it’s Back-to-School, Halloween or the holiday shopping season.

Warehouses and fulfillment centers are the backbones of any online retailer. When things run smoothly and efficiently, orders are filled quickly and accurately, and customers are happy. When they don’t, companies lose money and customers.

The best way to prepare for any peak season is to introduce automation into your operations. You might think it’s too late to make significant changes to your warehouse this year, but with the current generation of robotics that adapt to your environment, you can deploy a new system within weeks.

Whether you choose to automate for the upcoming peak season, there are several steps you can take right now that will strengthen your warehouse operations ahead of crunch time. These steps will also build the foundation to bring automation in ahead of peak 2020.

Metrics make a difference. If you want to optimize your warehouse, you first need to measure the performance of your operations to establish a baseline. How many items are your pickers retrieving per hour? How long does it take to sort and pack orders or replenish totes? How are incoming orders prioritized, and how many orders does the facility ship on a given day? You can’t improve a process until you measure it.

You’ll also want to measure at a more granular level. How long does each individual pick take? How much time passes between each pick? Understanding processes at this level of detail can help you uncover anomalies that are adding up to a significant amount of precious time and money over time.

Amassing the data is the first step. Establishing a system to capture and analyze the data is how you’ll extract real value from the information. You might implement software that does all this for you, or you might simply create a spreadsheet. Either way, you’ll develop a better understanding of where you have opportunities for improvement.

Perform a complete inventory. Taking inventory is the only way to know what you have, what you’re about to run out of, and what’s been misplaced or lost. Then, moving forward, perform regular cycle counts that won’t disrupt operations. Maintaining accurate data can help you minimize safety stock and, therefore, money tied up in inventory.

These are some of the more obvious costs of inventory inaccuracies. There are more subtle ones you’ll uncover as you take a granular look at your processes. For example, if your inventory isn’t where your system says it is, the costs to your business can pile up. There’s the time your picker wasted performing a picking cycle that ended without a product for the customer, the time spent investigating why the pick was missed, and the lost opportunity cost of fulfilling the customer’s order. Again, once you establish a system for capturing and analyzing this type of data from your operations, you’ll see the inefficiencies pile up. Every efficiency you uncover is an opportunity to directly recover costs.

Review your picking and replenishment strategy. Order picking is a specific, repetitive task that takes place in every fulfillment warehouse. It’s also one of the biggest expenses, often making up more than half of operational costs. In addition, pickers typically spend more than half of their time walking the warehouse aisles to retrieve items. That’s why it’s critical to understand the different picking methods, and assess which one is optimal for your business. When you assess your picking strategy, you cannot decouple it from replenishment. The two are completely interdependent, so if your replenishment isn’t done right, your picking will reflect it.

Discrete picking, in which a worker picks all the items for a single order, is the most straightforward picking method. It’s also the least efficient, as it requires pickers to zig-zag throughout the warehouse in search of individual items. Consider employing batch, wave or zone picking strategies, depending on your product mix and warehouse configuration.

In batch picking, groups of orders are picked at the same time to minimize repeat visits to the same bin location. If 30 separate orders each contain one beach ball, 30 beach balls are picked at once, then sorted by order.

In wave picking, pickers prepare each order line by line, but instead of compiling orders as they come in, all orders are evaluated by an order management system to maximize picking and shipping operations. This allows for “waves” of orders to be compiled and shipped throughout the day, prioritized by time and importance.

Zone picking means that items (SKUs) are divided up into specific areas (or zones) in a warehouse, and a picker is assigned to each zone. When an order comes in, the picker fills the part of the order residing in that zone. Other pickers in other zones fill their parts, and everything goes to the sorting area to be pieced together.

Selecting the right picking method and systems can significantly increase throughput. It can also directly increase the satisfaction of your customers.

Fewer touches mean fewer errors – and lower costs. Conventional wisdom dictates that the fewer hands that touch a product as it makes its way to a customer the better. More touches mean more costs and more opportunities for mistakes to be made. Evaluate the flow of inventory into and out of the warehouse to see how many steps are involved in fulfilling orders, and look for ways to reduce that number.

It’s important, however, to understand how much time is consumed by each of the touches in the process when doing this evaluation. If you simply eliminate a single touch that takes a short amount of time to accomplish without evaluating the total time impact of the other four or five touches, you’ve missed an opportunity to improve efficiency.

E-commerce sales are soaring and will continue to increase next year and every year thereafter. Now is the time to begin assessing robotic fulfillment systems that will allow you to keep up with increasingly demanding customer expectations. Faster delivery times, broader product selections, free returns, and stiff competition all make the question of automating a matter of when, not if. Take steps this peak season to set yourself up for an even bigger one next year.

Source: Supply Chain Brain