WHAT IS WAREHOUSE OPERATIONS?
Just like people, every item has a journey. The groceries we buy in the supermarket, the clothes we order from an online marketplace, or the curtains that decorate our living room were likely stored in a warehouse once. They were made available to us due to millions of logistics processes between those four walls. It is a truly magical world! In this blog post, we take a little tour behind the scenes to define warehouse operations, its main functions, and what best practices we can use to optimize processes.
What is warehouse operations, really?
Warehouse operations is a set of warehouse processes and procedures that ensure the goods flow smoothly in and out of the warehouse. Since the advent of e-commerce and the growing role of warehouses in the customer buying journey, well-organized warehouse operations have become an essential source of competitive advantage for supply chain companies. Consequently, inefficiencies can erode customer satisfaction and reduce profitability. Warehouse operations management must therefore focus on optimizing processes.
What are the key work activities in warehouse operations?
We can group the tasks into six main categories:
- Receiving: When incoming goods are received, checked, and labeled.
- Put-away: Placing the received goods in the storage area.
- Storage: Tasks related to organizing and operating the warehouse storage area to be space-efficient and process-efficient.
- Picking: Automated or manual picking of orders, B2B or directly to the consumer.
- Packing: Picked items are packed in boxes safely and with as little air as possible.
- Shipping: Transferring the packed boxes to the transport company and checking them out.
How to operate a warehouse?
Warehouse processes can be either manual or automated. An example of manual operation is when we use a paper picklist to fulfill orders. The same can be done with automation when a handheld device tells a warehouse worker where to go and which tasks to perform.
Nowadays, most warehouses operate with a mixture of manual and automated processes. However, automating warehouse operations is growing steadily as companies must improve performance speed and efficiency to meet customer demands for larger product variety, smaller package sizes, faster deliveries, and easy returns.
How to optimize warehouse operations?
There are two key factors inducing costs in a warehouse: time and space. Therefore, optimizing warehouse operations is about reducing money spent on these factors without compromising quality, work safety, or the delivery experience. In fact, when we do the right things more efficiently, we can free up resources for future improvements.
To do the right things, though, we need the correct information and tools to optimize and prioritize all warehouse processes. A modern warehouse management system (WMS) is designed for precisely this job. Equipped with Artificial Intelligence (AI), it gathers, analyzes, and applies information to improve traceability, optimize the use of space and movements, and reduce errors.
Here are 4 warehouse operations best practices, done with the help of a WMS:
- Optimizing space: By analyzing order history data with AI, the WMS learns which articles are ordered together and suggests moving the articles to a more optimal pick area. In addition, based on customers’ buying patterns, it can also advise placing articles often picked together close to each other.
- Optimizing movements: By choosing the next assignment for each forklift based on proximity, the WMS can optimize the movement of goods with AI. Driving time with empty forklifts can be reduced by up to 20%.
- Optimizing resources: Many packages contain unnecessary air due to the wrong box size. This creates excess waste and transportation emissions. An AI-based WMS can calculate the optimal box size for each shipment, considering not only the dimensions but the related logistics and material costs too.
- Optimizing communication: Customers want to track their orders. A WMS is a source of all kinds of information related to that. By integrating the software with your Transportation Management System (TMS), you can provide customers with continuous updates on their packages and keep them satisfied. You can even customize delivery notes to build your brand.