Why and How to Conduct a Warehouse Assessment

In today’s challenging and competitive world, your success can hinge on whether your warehouse operations are productive, and effective, enough to meet your expectations and those of your customers. One way to gauge how effectively your warehouse operations are meeting those expectations is to conduct a warehouse operations assessment: a systematic review of the warehouse functions looking for possible improvements in efficiency and service.

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10 Supply Chain Strategies for eCommerce Businesses

The Chinese military strategist, Sun Tzu said, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”  

How does this apply to modern day fulfillment and Supply Chain?  Many fulfillment centers spend much of their time implementing reactive tactics without ever thinking through the strategy of what they are trying to achieve. The terms tactic and strategy are often confused and incorrectly used interchangeably.

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Warehouse Inventory Management During an E-Commerce Warehouse Relocation

The biggest challenge you’ll face in relocating a warehouse is disruption to your business. If you are fully invested in inventory at an existing 3PL or your internal facility, how will you transfer inventory to start up the new facility without having to shut down for days or even weeks?

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Using 3PL Solutions for a Successful Peak Season

Getting the most from your third party logistics (3PL) provider this peak season starts with your forecasting accuracy. In order for you to get the most from 3PL solutions, you need to have established measurable service levels that are agreed to by both parties as part of your agreement. Establishing these service levels, and having the 3PL vendor meet them requires that you supply realistic forecasts for calls and order volumes by day, by week a month in advance so that the vendor can plan staffing accordingly.

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Warehouse Improvements to Implement Before Holiday Season

Believe it or not, there is still a window of opportunity to make sure you are ready for this Holiday Season. Just think back to last year's peak season for a moment. Can you and your business afford to have Round 2 (and for some of you it may be Round 10 or 12) of the issues that you faced in past peak seasons? You may have completed a brief post Holiday Season review of what worked and what needs to change in your operations. Dust off that document and review with management the outlined issues that occurred last year and the ones that still need to be addressed. This should be done before any other areas are assessed and tackled.

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Developing a Warehouse Move Plan

Recently we had to assist a company that was in the midst of a warehouse move, but had failed to properly plan. The facility and location was selected, and the new warehouse facility is located roughly 825 miles from their current DC. Along the way, they reaslized they had forgotten about many aspects.   What seems like a simple concept or moving from one facility to another can become a daunting task in a hurry. 

Another Idea: Read Key Warehouse Layout and Design Principles 

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Product Returns Processing - Handle Returns With Care

Major e-commerce studies show a high percentage of customers - 80% in one study -say the ease of returning products is important to whether they will buy again.  Studies also show a high percentage of customers are more likely to shop with an online merchant if the merchant offers “free product returns”.  How well you handle returns can dramatically affect your profitability and customer lifetime value.

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Multichannel Inventory: What You Need to Know

It sounds like a sci-fi trilogy: Past, present, and future merge to provide a single, optimal inventory experience. Multichannel merchants manage inventory seamlessly throughout major business processes and across channels in order to find the perfect balance between customer service and profitability.

Few merchants today would claim to have reached this level of inventory management, as developing such a strategy can be complex. But there are compelling economic reasons to try.

In most multichannel companies, inventory is the largest dollar asset on the balance sheet, which means that how well you plan, forecast, and manage inventory will to a large degree determine your profitability. Inaccurate forecasting ultimately produces backorders, and backorders can result in dissatisfied current customers; they can also turn away potential new customers.

Although the cost of poor inventory management doesn't have a separate line on a company's P&L statement, it can be steep. According to our proprietary studies with dozens of companies, the true cost of a backordered unit of merchandise runs from $7 to $12. For a company processing 200,000 orders a year, with an average of two items per order and a 20% backorder rate, the operations cost to the company could run as high as $480,000. This does not include costs related to prospecting, expediting backorders by inventory control, returns because of late shipments, lost margin, additional air freight, and customer ill will or losing the customer all together.

Faulty planning and forecasting can also produce overstocks that must be liquidated, at a loss of as much as 4%-10% of merchandise margin (between initial purchase margin and maintained margin), depending on the product category.

Direct marketers are well aware that they need to resolve inventory issues across channels. In a recent AMR Research survey of retailers' plans for upgrading their multichannel systems, 22% of the respondents cited Web-enabled inventory management and visibility as a key strategy they will be working on in the next 12 months. The AMR report, “Technology Trends in Inventory for Retailers and CP Manufacturers,” went on to say, “The lack of data consolidation for inventory and order management further illustrates retailers' immature inventory management and order processes.” The report also lists customer loyalty and multichannel customer order fulfillment among the top five concerns of respondents.
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Training and Mentoring Your Management and Supervisors

The success of your efficiency/cost-control initiatives and customer service performance hinge on the strength of your first-line and mid-level managers. While promoting from within whenever possible is a best practice, insufficient development of managerial skills —knowing how to manage both up and down — is a weak link for more than a few companies.

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How Do I Develop a Liquidation Strategy for Slow Selling Products?


Inventory is the largest single balance sheet asset in most e-commerce businesses, but around 80% of sales are typically generated by about 20% of products—and more than 50% of products often either do not meet, or exceed, their burden in terms of contribution to profit.  Many centers have significant space occupied by slow selling product; you can’t afford to sit on such high dollar inventories whose fully loaded costs include product costs, inbound freight, customs, marketing, fulfillment, inventory carrying costs, and eventual loss of margin through liquidation.  Yet merchants are often reluctant to act quickly on overstocks that sap profits.
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