Warehouse organisation: These basics you should know
Online retailers, who attract negative attention with long delivery times, not only risk damaging their image but may also become vulnerable to legal action due to non-compliance with delivery times. Yet it only takes a few logistics basics to get your warehouse into gear.
The most important basics are listed here.
The level of organisation of a mail order warehouse mainly depends on the quantity of stored items. A commercial ebay dealer might make do with a few shelves in his own garage. However, with an expanding range and an increase in shipment volumes, the online retailer may quickly reach his limits.
The storage areas
For many online retailers a simple three-way division of the warehouse should be perfectly adequate.
- Incoming goods: Here, the delivered goods are checked for completeness and quality. At the same time the supplier can take back empty euro pallets. The incoming goods area can also be used as a temporary supply warehouse, as long as the delivered pallets have not yet been separated.
- Order-picking warehouse: In this warehouse individual merchandise is stored. In most cases simple shelving racks or flow racks are adequate, from which the picker takes the items ordered.
- Dispatch: Here the goods are packed, prepared for shipping and collected for the shipper. FMG – i.e. fast moving goods – can be stored in the dispatch area for a short period of time. This way the goods can be picked directly off the pallet, saving time and shortening walking distances. In large mail order warehouses fast moving goods are stored in pre-picking zones at the front of the dispatch area.
These sub-areas do not need to be separated by walls – when using fork-lifts or pallet trucks this would be more of a hindrance. Rather, these are storage areas which might be identified by floor markings in order to prevent pallets from the incoming goods area from being “just quickly” stored in the dispatch area.
Storage area allocation
A warehouse, in which a picker first has to search for each item, is not very effective. This creates avoidable delays until the goods are ready for shipment; in turn, the maximum logistics capacity of your shop decreases and sales figures may fall due to a larger quota of returns. This is why each item must be allocated to a storage area. Logistics experts call this “marriage to a storage area”. There are two options:
- Numerical space allocation: Here items are always stored in a fixed area according to the sequence of the item number. This method is suitable for most small and medium-sized online shops with a manageable product range and shipping volumes.
- Chaotic space allocation: For shops with high shipping volumes the numerical system is not flexible enough to react to changes in the product range. Instead, new items are automatically allocated to the next available storage area. This requires that each item number in a table is allocated a storage area number.
Warehouse planning
When planning a warehouse, technical capacities must be taken into account in addition to economic considerations. The following basic factors should be considered when planning your warehouse.
- Number of items in the product range
- Size of inventory items
- Average and maximum storage quantity of an item depending on disposition cycles and planned clearance sales
- Shipment quantity per day on average and at peak times
- Average number of items per shipment. Multiple item shipments are more efficient for picking
- Quota of returns
