What makes an e-commerce warehouse good? And what pitfalls should be avoided? Six lessons from Casper Bakker, co-founder of software company Picqer.
According to Bakker, an e-commerce warehouse is distinguished by the combination of retail and warehouse. The e-commerce warehouse is the last 'checkpoint' before the order goes to the end customer, a role previously played by retail. All the more crucial to have processes in the warehouse in order.
Casper Bakker is at the helm of Piqr, an online warehouse management tool mostly used by small and medium-sized webshops. Bakker shared six pitfalls to avoid when running an e-commerce warehouse during eCommerce Live!
Pitfall 1: Many intermediate stations
When there is a difficult process in the warehouse, it is often broken down into small sub-processes. Bakker often sees five different steps carried out by five different employees: printing out, picking, checking and sticking label, packing and as a final step the roll container. This usually actually makes the process more difficult, as an intermediate stock of orders is created at each station.
"At every intermediate station, things can go wrong. Handing over an order to a person is error-prone and time-consuming." Bakker recommends breaking down such processes into two steps. The first step includes printing out and picking the order, while the second step includes checking, packing and the roller container. Bakker: "Then only one intermediate stock is created."
Why two steps instead of one? There are several reasons, Bakker explains. "First of all, it is more convenient to separate picking and packing due to warehouse space. A packing table costs a lot of money and space. If someone has to go through the whole warehouse before he can pack the order, the packing table stands empty unnecessarily for a very long time. Besides, with two steps, you have an additional check point before the order is sent."
Pitfall 2: Saving time (in the wrong places)
In itself, it is good to want to save time, but be careful not to focus on the wrong places when doing so, warns Bakker. One example is handling bulk locations. These come from traditional warehousing and offer the advantage that purchases can be put away faster and pick locations are smaller because everything is closer together. "The problem with e-commerce warehouses is that moving bulk locations to the pick locations is often necessary and time-consuming. You need to continuously replenish the pick locations from bulk. To do that exactly at the right time - so you really save time - good software support is needed. In some cases, it can save time, if you are in fashion and buy months ahead, for example. If you stock up for several weeks, it's better to make your picking locations a bit bigger."
The co-founder of Piqr also sees that many companies want to save time by not using barcode scanners. "Employees find it time-consuming. They like to ignore barcode scanners. In practice, this is not so bad. Moreover, orders go wrong less often when using barcode scanners. Such errors also cost you a lot of time."
Pitfall 3: Not knowing what you have in stock
On this, Bakker says briefly: "You can't make promises on your website if you don't know how much stock you have. Webshop software supports stock very easily. It takes some discipline, but then you can keep your promises."
Pitfall 4: Location management
Location management gives each location in the warehouse a unique number and links random products to it. This is usually not supported by webshop software, but needs more professional warehouse software.
"People think it's not really necessary. They think they know where everything is, or they put it in brand order. But it really makes you a lot less flexible. Suppose a new brand arrives with the letter B. Do you have to move everything around to make room between the A and the C?" Moreover, inducting new employees is more difficult with such a layout, Bakker believes. "If you do arrange your location management, you are more flexible in your assortment, you have less familiarisation time and your staff can work more independently. You can also use a picking order that works best for you. You let the software automatically give orders based on the walking route. Or you put products that are runners at the front, so employees don't have to walk as far."
Pitfall 5: Lots of exceptions
Bakker works a lot with webshops that have grown steadily, from the attic to a warehouse. "During that growth, they have built in a lot of exceptions. For example: only certain customers can collect. Or: this order must be sent in a different packaging." The Piqr founder sees that these entrepreneurs have a lot of trouble settling in because there are so many exceptions. "Moreover, it is very error-prone. Try to have standards as simple as possible, which you can easily explain to everyone."
Pitfall 6: Clutter
Clutter is disastrous for accuracy and speed in the warehouse. It also creates frustration among employees. About that, Bakker says: "Make sure you have the discipline to put things down correctly. Don't 'just put boxes in the aisle'. If you need to put things somewhere temporarily, create a place for it. That way, even people who only work once a week know where to find things."
First right, then faster
"Remember: right first, faster second," Bakker offers as a final tip. "I sometimes see people who make a lot of mistakes - with, say, a 1.5 to 2 per cent error rate - who do try to speed up. That is the wrong order. Get things right first."
