Efficiency is a crucial element for success in the warehouse or distribution center. Previously, we focused on ways to utilize warehouse space more efficiently. In this blog post, we'll go over 3 fundamental tips for more efficient fulfillment operations and inventory management processes.
A laissez-faire approach to slotting is detrimental to overall throughput and efficient space utilization. You've probably heard of the 80/20 rule: 20% of your SKUs usually account for 80% of your sales. Those top-performing SKUs should be slotted in a layout that 1) reduces the frequency and urgency of replenishment trips by providing sufficient space for extra stock, and 2) allows pickers to quickly and easily access them. Be sure to periodically review your slotting assignments to account for changes in customer demand (especially for seasonal items).
Faster intra-warehouse transit
Aside from changing the layout and slotting assignments, consider investing in equipment that will minimize the travel time for stock and staff within the warehouse. For example, conveyor systems can improve efficiency by reducing product handling and walking distance.
In kit assembly, or "kitting," you take individual items from your inventory and bundle them together as a unique SKU. The kits are then ready-to-ship when orders are placed – saving more time compared to picking each of the products at the time of order.
User generated content (UGC) such as product reviews, questions & answers, photos, videos, and more provide a number of benefits to ecommerce sites. They improve your site's online shopping experience, build trust with new customers, improve brand reception, and serve as a resource for creating promotional and marketing materials. But, just because you build space for UGC into your site doesn't mean shoppers will come and start providing content. Use these tips to encourage your customers to submit more UGC, more frequently.
There are several ways you can reward customers for contributing UGC. Let contributors know that their content is appreciated and makes a difference by notifying them when other shoppers find their photos, reviews or answers helpful. If your site has a customer portal, you can borrow some ideas from gamification and award users with badges or redeemable points for actively contributing UGC.
Provide tools to make creation and submission easy
Users are more likely to provide UGC if you can make the experience as frictionless as possible. Some ideas include using review submission forms with writing prompts or icons for mobile that launch a camera app for quickly sending product photos or video.
Highlight privacy and security features
Give contributors a way to preview how UGC submissions will appear onsite (including how account info will display to other users) before they go live. If you are hosting a platform for shoppers to communicate with one another (e.g. a user forum or Q&A product page section), make sure it is moderated well to prevent offensive content.
Ask for UGC
Redesign the visibility of UGC throughout your site and use clear calls to action for shoppers to participate. Offsite, send follow up emails to customers after they receive an order and ask if they can write a review or answer other customers' questions. You may need to adjust the timing of this follow up to ensure customers have had enough time to properly evaluate the product.
SKU replenishment is a major component in the efficiency of warehouse picking and packing. If a picker goes to a designated pick slot, but finds it empty, multiple people and processes are affected. The picker gets stuck on the current order trying to track down the necessary product. Staffers in charge of replenishing the pick slots stop what they're currently doing to address the problem. Order filling is delayed until the right item is found and the order completed – or worse, the order ships incomplete and a second shipment is required with shipping costs paid by you.
In combination with optimal inventory locations, well-timed SKU replenishment can greatly improve fulfillment efficiencies. Below are a few methods you can use to control SKU replenishment rates:
This method establishes the maximum number of products a slot can hold and the minimum quantity it should have at all times. The minimum quantity threshold provides a "safety net" of products in stock that gives you time to replenish the slot before it runs out completely.
This method measures the demand for a SKU within a batch of orders and compares it to the current quantity in the pick slot. The demand exceeds the current quantity, the slot is marked for replenishment. In combination with the min-max method, on-demand SKU replenishment is especially useful for keeping pick slots full during peak season or sudden increases in order volume.
Also known lean time or downtime SKU replenishment, the top-off strategy refills pick slots when the warehouse isn't busy - regardless of the slot's quantity. This ensures that pickers will have all the product they need when orders start pouring in.
Your call center is a critical part of the overall customer experience you provide. If you opt to outsource your call center management, you need to consider the provider’s capabilities before partnering with them – and average call duration is one of the most important metrics to consider. Generally, shorter is better. Reducing the amount of time your customers stay on the phone for customer service inquiries is a win-win. Your call center will be able to handle higher volumes, while customers save time and have a better experience. For optimal call duration, your call center or call center provider should do the following:
- Expand the decision-making authority of agents. Putting customers on hold to track down a supervisor to make a simple decision eats up time. Since most of these decisions involve free products or discounts, one solution is to give agents a small budget of "make-good" cash to apply toward these scenarios.
- Create a robust and up-to-date knowledge base on your ecommerce site that both customers and call center agents can easily access.
- Train agents thoroughly. Before agents start answering customer calls, they should receive a detailed overview of your company’s systems, policies, and products to enable them to quickly handle a wide variety of customer inquiries.
- When evaluating call quality metrics, make sure that the ability to manage hold time during calls is accounted for.
- Foster cooperation between departments. Sometimes, customer service agents don't have all the answers and need to put customers on hold while they reach out to the appropriate department. Take steps to ensure that agents have available and reliable contacts where necessary.
In every task for every industry, automation makes life easier. But in ecommerce fulfillment, incorporating automation equipment into your warehouse can be a lengthy and expensive process. It requires considerable expertise to know which types of equipment you need and how it should be laid out for maximum efficiency. Plus, if you want to make changes in the future, it can become very expensive to move, reinstall, or upgrade. Before you invest in warehouse automation, consider the following:
Your current capabilities
As your ecommerce business grows by entering new regional markets, adding new SKUs, and fulfilling more complex orders, manual warehouse operations become strained. Automation is only one possible solution to this challenge. It may be smarter to look into improving operational efficiencies in staffing, workflows, warehouse layout, or inventory storage.
Can you spare the time?
At the start, automated operations will take a few months to design and plan. Built-to-order automation and conveyance equipment may not be ready for 3-6 months, based on complexity. After installation, you still need time to train staff and fine tune the system. Depending on your needs, it may take 12 or more months to automate your warehouse.
Automation by proxy
With these issues in mind, you may not want to invest the money and time into the research that this type of expansion requires – at least not yet. However, a third-party fulfillment provider may better solution all-around. 3PL providers already have the infrastructure in place to help you improve your warehouse operations – for much less than the cost of investing in automation equipment.
At Fulfillment Works, we have helped ecommerce companies both large and small reach their goals for growth. Contact us today with your specific challenges to learn exactly how we can help.