A traditional Warehouse and Inventory Management Software (WMS) is a software application, to manage warehouse or distribution center operations. Yet, with the rise of e-commerce business, inventory is now beyond 4-walls of the warehouse. As a result, the next generation warehouse management system manages the fulfillment operations beyond 4-walls (e.g drop shipment, off-site receiving, locker boxes etc.).
Today, best of breed WMS systems manage the whole order fulfillment process from the consumer clicking the “buy” button to all the way through delivery.
What are the challenges of an e-commerce warehouse?
A traditional warehouse usually ships products directly to another business – mostly in higher quantities and in bulk. Whereas B2C warehousing involves a higher number of individual orders and smaller quantities within the order.
E-commerce warehousing is all about operational speed, accuracy and customer service.
The fluctuations in demand require temporary workforce which means additional license, additional industrial scanners and training. An e-commerce warehouse management system should support all the devices including smartphones and tablet PCs so that the temporary workers are able to use their own smart phones.
Parallel to the growth of an e-commerce company, it should be possible to subscribe new users on a temporary basis. The warehouse management system should allow subscribing more users when they are needed and unsubscribe them as the number of orders decrease.
Multiple Sales Channels
The most challenging and critical process in the omni-channel model is inventory sharing throughout all sales channels. Required priorities, allocations and reservations should be included in the system through this cooperative infrastructure.
In e-commerce, the average number of single-item orders is around 30%-50%. A traditional warehouse management system is familiar with and good at picking pallets and boxes from the warehouse but not picking single items.
In e-commerce, the demand fluctuates on a daily basis. As a result, e-commerce warehouses face unpredictable backorders. Automatic allocation and packing of backorders during receiving is crucial in e-commerce.
What are the main benefits of an e-commerce WMS?
Barcode: Warehouse and Inventory Management Systems use various technologies to achieve accuracy. The most common and affordable technology is barcode and voice technologies. By scanning the product barcode and location barcode, WMS ensures the right product is picked from or put away to the right location.
Finding The Right Product: The different SKUs in an e-commerce warehouse usually stated in thousands if not millions. It is very difficult for someone to find the right product in an affordable time without a system. A WMS guides pickers to the right location.
Walking Distance: In an e-commerce warehouse, a picker walks approximately 7 miles on average in a day. Most of this effort is caused by the multiple trips to pick a single order. By using batch picking and optimized routes, a WMS can reduce walking distance more than %30.
Handling Backorders: The average backorder ratio is %15 percent in an e-commerce warehouse. A next generation WMS easily identifies the backorders during receipt and allocates products to backorders. So that the products are transferred directly to packing stations without put-away.
Planning: Because of the fluctuations in demand and the scale of inventory, workforce planning is a time-consuming activity in an e-commerce warehouse. A warehouse management system is capable of planning the next shift’s workload and resource requirement.
It is possible to count many other benefits like preventing obsolete inventory, achieving traceability and visibility, managing drop shipments, integrating to multiple channels etc.