Warehouse Operations Guide

In an ecommerce business, a warehouse serves as a central hub to connect customers to the products they’ve ordered. As such, your warehouse operations play a vital role in the quality of service and experience that your customers will enjoy. It’s one of the most fundamental parts of your supply chain, making it crucial to optimize. 

This guide gives you a closer look at the processes involved in your warehouse operations and how to optimize each of them. By improving the speed and accuracy of your warehouse operations, you’ll subsequently be able to improve your overall business performance, which will then contribute to sustainable growth. Let’s dive in.

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What are warehouse operations?

Warehouse operations refer to the set of processes that take place within a warehouse to ensure the safe storage and smooth flow of goods. These processes help to ensure that goods are seamlessly received in the warehouse, stored in safe and appropriate locations, and then processed for shipping when needed. Warehouse operations consist of processes such as receiving, put-away, storage, picking, inventory management, packing, and shipping.

Inbound warehouse operations

Let’s take a look at the different types of processes associated with inbound warehouse operations and how to optimize them.

Receiving

The warehouse receiving process is the beginning of all your warehouse operations, where your incoming goods are received, unloaded, checked, and labeled. This is the step where you verify the accuracy of incoming inventory by ensuring that you’ve received the right SKUs in the right quantities. It’s also crucial to check for the condition and quality of the goods that you’ve received at this stage.

As you can imagine, any inaccuracies or missteps at this stage can cause a ripple effect throughout your entire warehouse operations and result in issues further down the line. For example, if you accidentally received incorrect items and recorded them in your inventory as the goods you’ve ordered, you’ll eventually have inaccurate inventory data that can disrupt your operations.

How to optimize your receiving operations

An obvious first step is to ensure that you’re receiving cargo efficiently so that there’s no accumulation at your receiving docks. Accumulation can cause serious disruptions as goods are unable to be processed as quickly as necessary, which results in further backlogs in your warehouse operations. Make use of conveyors and power pallet trucks to unload cargo in a more efficient manner, meaning that your dock areas will get cleared up much faster. 

Put-away

Next comes the put-away process, which involves moving goods away from the receiving dock and placing them in their dedicated storage areas. Any mistakes or flaws in your warehouse put-away operations could result in issues such as lost or misplaced items and inefficient use of storage space. In addition to causing several issues in your inventory management, this will also delay other aspects of your warehouse operations such as picking since workers are struggling to locate the items they need to pick.

On the other hand, an optimized put-away process will significantly improve the speed of storing goods and traveling across the warehouse. It also ensures optimal use of your warehouse space while making it easier for workers to locate and retrieve inventory, all while maintaining the safety of goods and employees alike.

How to optimize your put-away operations

When optimizing your put-away operations, you have to ensure that inventory is transported to its ideal storage location in the most efficient and accurate manner. Depending on your product mix, you’ll have to determine whether dynamic or fixed-location put-away is a better option. 

Dynamic put-away is preferable for businesses with a homogenous product mix since most of their products share similar characteristics in terms of size and weight. Meanwhile, a fixed-location put-away strategy would be necessary if your product mix is extremely varied as you’d need dedicated storage locations depending on the item category.

In addition, you can make use of slotting and space management systems that automatically create optimal space allocation for each SKU. This will ensure that you make optimal use of your available warehouse space while streamlining the put-away process. 

Storage

The next step is the inventory storage operations, which typically involve organizing and managing your warehouse storage area for maximum efficiency–both in terms of space and process. If these operations are carried out as they should, they help to ensure that you’re making full use of available warehouse space and strategically storing items so that workers can efficiently and seamlessly carry out their tasks.

How to optimize your storage operations

For starters, you’d want to consider the different types of warehousing solutions available to you. While some may opt for self-storage, others may choose to pay for traditional warehousing. Alternatively, some ecommerce businesses also choose to outsource their storage operations to a 3PL that takes care of storing and handling their inventory on their behalf.

Another key step to optimizing your warehouse storage operations is to make use of the best inventory storage system based on your unique needs. Depending on the size of your operations and the diversity of your product mix, you’ll need to decide whether to use horizontal or vertical shelving systems. You should also consider streamlining your shelving and labeling strategy for improved organization and easy identification.  

Additionally, you’ll need to keep a close eye on relevant warehouse KPIs that will tell you how you’re performing in terms of storage. Ideally, you’d want to use software that will automatically track those KPIs for you. This software should also be capable of calculating your warehouse storage utilization to determine how efficiently you’re making use of available space. 

Warehouse processing activities

Once goods are safely stored in their designated locations, warehouse processing activities can begin. Let’s break down the key processing activities that are involved in your warehouse operations.

Order picking

Your warehouse picking activities form a crucial part of your warehouse operations. They involve locating and retrieving items that are needed to fulfill customer orders. These processing operations need to move quickly so that orders can get out the door faster. At the same time, you need to maintain high levels of picking accuracy to avoid customers getting the wrong items.

How to optimize your order picking operations

One of the first steps to optimize your order picking operations is by choosing a picking strategy that works specifically for you. Some warehouses may rely on zone picking and assign workers to pick items from a specific zone in the warehouse. Batch picking is also a popular strategy, wherein one picker is assigned to pick a batch of orders for multiple customers at a time. The ideal picking strategy will largely depend on your warehouse layout, product mix, and storage strategy.

Speaking of warehouse layout, it’s important to optimize it so that workers can move freely and efficiently between different aisles and zones. This would typically involve arranging your products into dedicated areas based on shared item characteristics, for instance. Moreover, there should be sufficient space between shelves so that there’s no disruption of movement for your workers and warehouse vehicles. On top of this, items should be neatly organized on shelves that are clearly labeled for easy identification.

Warehouses should also leverage the right technology to streamline the picking process. This would involve the use of warehouse management systems that can generate automated picking lists. Mobile and wearable devices can also help by enabling pickers to view their picking lists and scan items wirelessly as well as access inventory data and update it in real-time.

Inventory management

Managing your inventory efficiently and accurately is a vital part of your warehouse processing operations. This involves keeping a close eye on your inventory to ensure that you have sufficient stock and know when to place inventory reorders as well as how much to reorder. When you’re not monitoring your inventory properly, you may not know when you’re running low on inventory, putting you at risk of stockouts. Alternatively, you may be unable to accurately assess your inventory needs, which means you may accidentally order too much.

How to optimize inventory management

The key to optimizing inventory management is using software that will give you full and real-time visibility of inventory across your warehouse. This will integrate with your online store and your other existing tools so you can update your inventory levels in real time. It also keeps track of historical sales data and makes accurate predictions about future demand.

You can use the software to calculate and set reorder points, so you get notified when stock dips below a certain level. This allows for timely inventory reorders to prevent stockouts. The software also keeps track of important inventory KPIs, which helps you assess the efficiency and accuracy of your inventory management activities.

Outbound warehouse operations

As orders come in and get processed, your outbound warehouse operations can begin. There are two main processes involved in this.

Packing

Your warehouse packing operations involve packing up the items that have been picked and getting them ready to be shipped to the customer. As one of the final stages in your warehouse operations, this is where you ensure that orders are securely packed to avoid damage during transit. This stage is also where you make sure to use the right box sizes so as to minimize packaging costs while keeping the weight and dimensions on the lower side.

How to optimize your packing operations

Leveraging the right software is a necessary step to optimizing your packing operations as it can guide your warehouse operations specialists in executing their tasks in a professional manner. The software should be able to account for the product size and dimensions along with your packaging preferences to recommend the right package size. That way, you’re not using packages that are too small or too big for the product being shipped. This will help to minimize shipping damage while keeping your packing costs low.

Shipping

Finally, your warehousing operations conclude with ecommerce shipping. This is the stage where the goods leave your warehouse and get transferred to the courier service that’s in charge of transporting them to the customer. It involves sorting and loading packages and then transferring them to the assigned courier service to be transported through the right transit mode. All these steps must be carried out efficiently and accurately while ensuring the safety of the goods being transported.

How to optimize your shipping operations 

Your shipping operations can be optimized by using loading systems that enable you to safely load goods in an efficient manner. Moreover, you need to ensure that you’re allocating the right amount of resources to different areas of your shipping bay. This will involve the use of labor management systems that will allow you to distribute your workforce optimally without the risk of under or over-allocation.

You can further speed up the process of verifying shipments to ensure that you’re loading them in the right vehicles. This would require using shipping mobile applications and scanning systems to ensure that you have real-time access to the right information when you need it.

Tip: Know your warehouse layout and how to arrange it

The layout of your warehouse plays an important role in how your operations are carried out. It must be optimally designed so as to allow for ease of movement and seamless inventory flow, which can improve operational efficiency. Start by deciding between U-shared, I-shaped, and L-shaped designs depending on how you want your warehouse traffic to flow.

Once this is completed, you can plan your layout to ensure that different processes in your warehouse operations can coordinate and flow without disruptions. Here are a few essential tips:

·      Make sure to create a dedicated loading and unloading area with ample space to prevent bottlenecks.

·      Have a separate reception area where sorting and inspection activities can take place.

·      Plan your storage space so that every inch of available space is utilized. You’d want to consider making use of vertical storage systems, for example.

·      Create a dedicated picking area close to the storage area for easy access.·      Keep the packing and shipping area separate from the rest of the warehouse so it’s properly organized and inventory flow is undisrupted.

How ShipBob’s WMS helps your business

ShipBob offers powerful warehouse management software to help you optimize your in-house warehouse operations. With Merchant Plus, you can have a single source of truth to efficiently manage fulfillment. It comes with solutions for warehouse management, inventory management, order management, pick and pack, and transportation management so that every aspect of your warehouse operations can function seamlessly.For those who choose to outsource their warehousing operations, ShipBob is the go-to 3PL that offers top-tier warehouse management services for 7000+ brands across 40+ warehouses. Across all these warehouses, ShipBob has maintained high levels of order accuracy and fulfillment efficiency by leveraging powerful proprietary software and years of warehousing expertise.

Warehouse operations FAQs

Below are answers to some common questions about warehouse operations.