As e-commerce has opened up the retail world to new markets and new customer demands, manufacturers’ supply chains have become increasingly complex. Brick-and-mortar retail customers still dominate revenues, but new opportunities like selling directly to consumers and drop-shipping through big-box storefronts can be avenues to growth. Whether online or in-person, manufacturers are examining ways in which their warehouses can more efficiently execute fulfillment of both order profiles.
These developments are pushing the envelope of how a manufacturer’s warehouse has traditionally operated, particularly around order fulfillment: Manufacturers are fulfilling direct-to-consumer orders through e-commerce channels while also maintaining traditional fulfillment. To be profitable, this shift may require optimizing processes, acquiring new technologies and equipment, or integrating disparate software systems. The omni-channel transformation is still relatively recent, and many manufacturers are racing to modernize the warehouse tools and processes to effectively manage the changes. To adapt to this new warehouse normal, let’s consider seven best practices for e-commerce warehousing.
Direct-to-consumer and drop-ship orders. To succeed in e-commerce fulfillment, you’ll need to profitably manage single-line and small multi-line direct-to-consumer (DTC) and drop-ship orders. Instead of thinking of drop-ships and DTC as low-margin and high-cost, take advantage of the e-commerce boom and invest in the ability to manage small orders profitably. To gain efficiency, pick all of your single-line orders at the same time. At the pack station, scan those orders and have your customer-specific compliance and pack labels printed out on the spot.
Small order sizes. Small-parcel shipping should automatically rate-shop and never add more than a single touch point. Your warehouse management system (WMS) can pre-determine the volume and contents of an order as well as the appropriate box size. With this intelligence, you can pre-print the associated shipping labels and pick direct-to-box. Rate-shopping by service level guarantees delivery by intended date at the lowest cost, and sends tracking information directly back to the ERP to provide to the customer.
Cartonization. Use cartonization reports to send EDI 753 Request for Routing Instructions before picking the direct-to-distribution center (DC) order. Picking, packing and labeling an entire direct-to-DC order prior to sending your routing request can take up precious floor space and delay shipments to your customers. With cartonization reports, you can actually provide complete order details in the EDI 753 document prior to lifting a finger. The WMS can then wave that order for picking, and by the time the order is staged, EDI 754 Routing Instructions have arrived from the big-box retailer and the order is ready to go.
Labeling. Many internet retailers have to proactively (or worse, reactively) manage hundreds of customer-specific pack labels. Managing these labels through a third party can cause delays when changes need to be made. Consider managing compliance labels and pack slips in-house through your WMS: Having the competency to handle modifications can give you an edge and allows you to onboard new customers more quickly.
Integration considerations. Integrate your EDI 856 Advanced Shipping Notice (ASN) compliance and EDI 846 Inventory Feed directly into your WMS. The EDI 856 Advanced Shipping Notice is a common requirement when selling to almost all retailers. Much of the required information should live within your WMS, such as order characteristics and shipping tracking. Additionally, having the capability to provide inventory feeds with the EDI 846 Inventory Feed document can give you an edge on other suppliers.
Gone are the days when weekly or biweekly inventory reports would suffice; today, many e-tailers demand inventory feeds via EDI daily, and some even hourly. Consider WMS and EDI from a single software provider. This can mean less manual entry — and less room for data entry error — of vital information.
Order accuracy. Fulfill perfect orders regularly to increase your vendor scorecard. Retailers grant promotional opportunities and top website real estate to vendors that can consistently deliver accurately and on-time. As you prove that you can deliver orders 100 percent on time with no stock-outs, you will inevitably increase your vendor scorecard and earn more selling opportunities with major e-tailers.
Managing returns. Returns can be annoying, but successful manufacturers and virtual merchants are embracing them because it’s critical to give consumers options. The retail landscape is a battle of low pricing and convenience, and easy returns are a key part of that. When you can make the returns process quick and easy, you maintain your customer’s trust. Have a system in place that can handle your returns accurately, cost-effectively, and keep your customer experience at the top of the game.
The role of the warehouse is shifting, and interacting directly with consumers can be a big change for some manufacturers. Those that focus on best practices for their facility will be the organizations that increase their loyal customer base efficiently and profitably.
Carl Marin is a General Manager with HighJump.
