Category: Technology

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Technology Warehouse Management

Who Says Automation is with Robots? Think Beyond!

While robotics has a significant role in automation, it is not the only way to achieve it. Robotics consists of robots/ machines substituting human labor, automation brings together machines, software, and upgraded technologies to perform tasks that are otherwise performed manually. In fact, investment in robots is a rather expensive affair! New-age warehouse management systems are smart and affordable to introduce automation in your warehouse.

Many fears of job losses are associated with the idea of automation. However, these fears are largely unfounded as automation merely seeks to supplement and empower human effort. By taking over critical decision-making and manual labor, automation boosts efficiency in processes and enhances accuracy many times over.   

In this blog, we bring forth the vast number of ways in which automation is reshaping the tasks and functions of supply chain management, and turning warehouses into incredible high-tech facilities!

Serialization of inventory: Serialization and barcoding allow effective tracking of inventory in the warehouse. It allows auto-mapping of inventory located at the time of picking, thus saving significant time and manual effort in searching for the same. Some activities are clubbed together and consolidated with serialization, thus making the process faster.

Much of our supply chain efforts revolve around seamless communication in mapping and locating the stock. Items can be easily scanned using wireless devices such as Bluetooth scanners, smartphones, handheld terminals, and barcode scanners. Wireless devices enable an easy workflow as the staff can conveniently carry them around to read barcodes and capture data in the central repository. 

Read: E-booklet on Benefits of Serialization

Simple UX/UI: Solutions offered by Increff are easy-to-use and cost-effective owing to their user-friendly UX/UI which doesn’t require any specialized or prolonged training. Besides, in case of any errors by the staff, the system automatically blocks the user from advancing further, unless the wrong entry is resolved. This eliminates any chances of errors creeping into the system, which could snowball into costly mistakes right across the warehouse and beyond. 

Holidays and end-of-season could be strenuous for employees but a simple and user-friendly UX/UI can go a long way in reducing stress. An easy-to-use UX/UI permits collaboration and sharing of resources during peak hours to maximize manpower utilization. A user-friendly UX/UI ensures zero dependencies on skilled labor, so it’s easy to recruit extra hands in the time of need. The training time of 5 minutes, makes the system highly cost-effective and adaptable. 

Automated pick-list generation: Picklists can be generated basis channel and SLA priority. There’s no need to put the same styles or SKUs in the same bill. Serialization identifies barcodes and bins, to automatically generates picklists for wave-wise picking. The picker can then perform wave picking to save time and effort. Each item is picked and scanned. In case the picker chooses the wrong item, it will be automatically rejected by the system. This helps reduce errors in picking.

Read: The Next Big Thing in Retail; Automation in Inventory Management

Put-to-light storage: To save time and boost efficiency while storing the products on the warehouse shelves, light devices are used to direct the operators. This semi-automatic technique enables the operator to ‘put’ the items in the right pigeon-hole where the light flashes. 

Infinite scalability: Serialization enables the warehouse staff to perform chaotic putaway. All the items are brought to the same sorting table. Barcodes are then scanned to read the order-related information after which the items are sent out on their respective routes. Chaotic putaway and storage allow maximum warehouse space utilization, and deal with remarkably huge volumes!

Seamless returns management: Barcoding captures all the information of the returned products, especially their order history and reason for return. The reason for returns can be analyzed to find the most regularly returned items (which also have a greater likelihood of being defective). Analyzing customer buying and returning patterns can provide insights to design future strategies to curb returns. Besides, visibility and traceability of returned items are essential to avoid losses and delays. This is again made possible by the serialization of each item.

Eliminating paper processes: Increff is an efficient multichannel, web-based WMS and order fulfillment system that offers a real-time (less than 15 seconds) order inventory sync feature. Serialization and barcode scanning eliminates paperwork within the warehouse and every step gets recorded in the system. Manual errors can be traced back to the warehouse worker and adequate corrections can be made to prevent such errors in the future. 

Automation is finding a tremendous application in the field of warehouse management. It has opened up new vistas for businesses, making them more proactive while handling their inventory and ensuring a high standard of service to customers. Despite all these outstanding features and futuristic benefits, automation-based solutions are highly cost-effective in terms of their upfront costs, training and development, integrations, and up-gradations.

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Technology Warehouse Management

5 Myths on Warehouse Inventory Management Busted

Warehouse automation is fast becoming one of the essentials of supply chain management. But there are some very common myths that have been making rounds in the industry and believe it or not, even the most seasoned professionals may fall for them. In this blog, we clear the air around some preconceived notions surrounding warehouse management systems. So let’s get started.

Myth 1: Automation is suitable only for large brands and retailers

Larger and well-established brands definitely require a robust automation infrastructure, as they simply cannot operate their mammoth business processes manually. But this doesn’t mean that the smaller brands can afford to do without automation. 

Strategic planning in today’s highly competitive business environment requires a highly data-driven approach right from the beginning. There’s very little margin for error, especially for brands just coming into the industry and up against formidable competitors, both new and old. 

Fast-changing business environment especially demands that brands receive a continuous stream of real-time inputs and leverage automation to make well-informed decisions. Automation also boosts the efficiency and accuracy of business processes like picking and packing, thus enabling the smaller brands to save on some precious resources.

Read: Perfect Warehousing Solution for Higher Efficiency and Inventory Management

Myth 2: Adopting advanced warehousing means we must completely change every process

A drastic change in technology can significantly hamper the ongoing warehouse processes. When migrating to an advanced WMS solution, many brands are in fact apprehensive of bringing their warehouse processes to a halt.

These fears are entirely unfounded. New age warehousing solutions are often on plug-and-play rather than the rip-and-replace model. This means there is no pressure on brands to suddenly upgrade to a new system and do away with the old processes. The migration with solutions like Increff WMS is smooth, gradual, and well-planned, causing absolutely no disruptions to the ongoing warehouse operations. 

Read: How to choose a warehouse management system?

Myth 3: Automation means robotics

The word ‘automation’ instantly conjures up images of a massive assembly line with robotic arms fixing parts into automobiles. But that’s a very narrow view of the idea of automation. In reality, a number of technologies — both physical and digital — come together to set up automation in a business process. 

Transformation in warehouse management is all about automating the movement of inventory within and out of the warehouse with minimal human assistance. It seeks to eliminate repetitive, labor-intensive, manual data entry, and analysis tasks, with automation-driven processes. Most often automation in warehouses simply refers to the use of software to replace manual tasks.

Automation begins with the serialization and barcoding of all items, which makes them traceable both within the warehouse and throughout the supply chain. These are scanned and tracked using Bluetooth scanners and handheld terminals (HHT). The use of digital solutions such as warehouse management systems, merchandising software, and returns management systems allows brands to manage their inventory, take assortment-related decisions, and handle returns with greater efficiency.

Myth 4: New WMS will require expensive, time-consuming training

Advanced technology may appear rather formidable and hard to handle. It may often lead to resistance amongst the staff due to fears of the unexpected. For business owners, it could mean added costs of elaborate training interventions. But a cursory look at some of the new-age software solutions is enough to bust this myth.

WMS solutions like Increff WMS offer an incredibly simple UX/UI and workers can get started on the system with just 5 minutes of training. This makes cross-functioning of your existing staff easy and precludes the need to hire any specialized workforce for operating the system. In times of labor shortage, this feature can especially come in handy and help brands save costs on skilled labor. Besides, the implementation and deployment of the solutions are very quick and effective.

Quite contrary to the prevailing notions, therefore, new WMS solutions facilitate and empower your workforce, rather than pose a threat to it. 

Myth 5: Warehouse operations must shut down during audits

Audits are a frequent feature of warehouse management and can be quite time-consuming. This doesn’t mean the normal warehouse operations must be suspended during audits. With new-age warehouse management solutions, audits can be performed with utmost accuracy, while operations in the warehouse go on as usual.

Contrary to the above myths, new-age warehouse management systems powered by automation, make warehousing highly efficient, easy, and cost-effective. As business competition intensifies, automation is fast becoming an essential prerequisite for brands, no matter how big or small. 

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Technology Warehouse Management

Top 5 Challenges Within the Warehouse and How to Solve Them

As retail and e-commerce turn into highly competitive spaces warehouse management is also becoming more and more challenging. Customers these days expect lightning-fast deliveries, convenient shopping experiences, and easy returns. This requires greater flexibility, proactive handling, and a technology-driven warehouse management system backing the sales channels. 

With new trends such as omnichannel taking full effect, the challenges are further complicated as warehousing now requires a highly customer-centric approach. Competition is getting increasingly intense as smaller brands operating neck to neck with established giants, seek to carve out their place in the market. This often results in dropping margins and demands greater efficiency to stay afloat. 

As such, accurate inventory management, optimum picking and packing, transparency, and traceability of items are some of the must-have features of warehouse management systems, to ensure the highest levels of customer satisfaction and brand loyalty. 

Let’s take a look at the top 5 challenges in a warehouse today, and ways to tackle them effectively.

  1. Inventory tracking during BAU (Business as usual) and during peak sales period

As businesses expand, tracking the inventory manually can be extremely tardy and hectic. Inventory digitization and serialization ensure seamless inventory tracking within and outside the warehouse. This is all the more crucial during peak sales periods like the end-of-season sales or festive sales since only an automated system can ensure continuous, real-time tracking when the stakes are the highest. Barcoding and serialization help cut down human errors and inaccuracies. This enables warehouse personnel to log the inventory correctly and locate it easily as and when they wish to move it. 

Read: Choosing the Right WMS to Manage the Holiday Season Rush

2. Efficient Picking and Packing to Meet SLA Requirements

Undue delays and inexplicable inaccuracies can turn out to be the most difficult challenges in meeting SLAs. This, in the long run, can result in an increase in the rate of returns, higher customer churn, and loss of revenue. These issues can be tackled with efficient picking and packing so that only the right products in the right quantities are shipped. 

Increff WMS express picking enables auto picklist-based SLA and channel priority to ensure express delivery orders are dispatched on priority. Pick efficiency is enhanced using the wave-wise picking technique. This way the picker doesn’t have to go to the same aisle multiple times to pick. With its image-assisted picking and packing, Increff ensures 100% order picking accuracy.

3. Minimizing Wastage and Obsolescence

Poor stock management is one of the leading reasons for wastage and obsolescence. Perishable products can especially be sensitive to expiry dates and highly prone to wastage. With automated solutions like Increff WMS, retailers can put in place an alert notification for batches approaching their expiry or sell-by date. Commonly known as the FEFO (First Expiry First Out) technique, this significantly avoids wastage and obsolescence in warehouses, especially for brands dealing in Pharma, Cosmetics, and Consumables. 

4. Maximizing Resource Efficiency and Productivity

As more and more players emerge and compete in the market, there’s growing pressure on each brand —both big and small—to improve their bottom line, maintain healthy margins, and boost productivity. By offering a simple UI, Increff enables brands to maximize the efficiency of their warehouse staff with the training of no more than 10-15 minutes. This is especially crucial during peak sales when brands have to hire additional personnel or conduct cross-functional training from within their staff. 

The system generates auto-alerts at every step and will not allow the warehousing staff to move ahead without resolving the previous error. This ensures every step is captured in the system and the errors get corrected at each step and are not amplified. By capturing the picker ID in the system, there is greater traceability and accountability for errors. 

Combining and executing multiple steps in the process also ensures high performance. Increff enables picking and auditing simultaneously, thus cutting down on any potential downtime. 

5. Faster re-commerce and returns management

In the year 2020, Americans returned goods worth a whopping $428 billion which made for a return rate of 10.6%. Quite clearly, managing returns is a serious challenge that brands must overcome proactively to ensure optimum profitability. Time-consuming returns may lead to loss of sales as products may not be visible on the sales channels immediately. 

To reduce the chances of loss of sales, WMS solutions enable brands to conduct a quality check of the returned goods, and sort them as resaleable, refurbishable, and rejected. In case the goods are rejected, capturing the exact reason for rejection can help in the correction of future errors, conduct vendor analysis, and staff training. With the right labels, tags, and barcoding, there are zero chances of mixing the returned goods, keeping the whole returns process streamlined. 

Having the right warehouse management system in place can help deal with all the above challenges with greater ease and agility. In fact, a cutting-edge WMS ensures brands stay ahead of the competition and ensure the highest levels of customer satisfaction and brand loyalty. 

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Business Technology

5 Growing Technology Trends Reshaping the Retail Industry

Cutting-edge technology has left no sector of the economy untouched and is turning out to be one of the biggest drivers of efficiency, customer experience, and profitability. In the last few years, the retail industry has also been experiencing some transformative technological interventions that are reshaping the way business is done.  At the very heart of this transformation is the growth in ICT (Information & Communication Technology) and digital technology. This is going to have an impact on how the industry will evolve in the coming years. In this blog, we talk about the top 5 technology trends that are at the forefront of this global transformation in retail.

  1. Omnichannel retail

Omnichannel retail seeks to provide an unprecedented number of options to customers in terms of shopping and delivery. It puts customers right at the center of the retail process. Omnichannel allows customers to interact with the brand at multiple touchpoints and switch between channels while shopping for products. Customers making a purchase on a brand’s social media page can pick up the product from their brick-and-mortar store.

Omnichannel provides customers a consistent shopping experience across diverse platforms, both online and offline. This however creates new challenges for brands at the backend and compels them to be more agile and flexible with their fulfillment process. 

Omnichannel is driven by a robust technology infrastructure. Connecting all the retail channels and integrating the assortments of all warehouses and stores is essential, and is done using automation-backed solutions. Inventory barcode and serialization facilitate easy tracking of items as they move fluidly across channels. Likewise, analytics and automation help position products at the right locations which helps reduce delivery time as well as logistics costs.

Read: Faster Omnichannel Fulfillment is the Future of Retail

2. Need for immediate gratification

As new players enter the retail fray, customers are spoiled for choice, not just in terms of product options but also in the speed of delivery. Same-day delivery is gradually paving way for delivery within a few hours’ time. This requires rethinking the product placement and logistics on the part of the brands.

Accurate forecasting and data analysis, coupled with automation, can help brands make better decisions and place the right products close to their customer base. In-season sales and inter-warehouse transfers can further help meet the changing demand of the local market. More and more brands are now opting for distributed warehousing and on-demand warehousing, allowing brands to place the most sought-after products as close to customer clusters as possible.

Read: Reduce Logistics Costs and Improve Delivery Time with Increff Regional Utilization

3. Automation of processes to reduce dependence on skilled labor 

One of the most formidable challenges that companies faced during the pandemic was the shortage of skilled labor. This often made handling of equipment and technology difficult as most of the workforce lacked adequate training. 

But with technology solutions like Increff WMS, there is a greater role for automation and much lesser reliance on a trained or skilled workforce. The UX/UI is often very simple and easy to use. Besides, the automatic pop-ups act as warning signals in case of any errors in the input, and prevent the user from advancing, unless the error is cleared at each step. This means just about anyone with basic training can operate the system and keep the show running.

4. Meaningful partnerships for value addition and hyper-localization

The hyperlocal delivery industry is expected to grow up to $3634 billion by 2027 at a CAGR of 17.9% between 2019-2027. An increasing number of brands are now relying upon local partners for their last-mile logistics and other specialized tasks. 

Hyperlocal partners are most effective in supplying goods like drugs and groceries that require quicker fulfillment. They reduce the reliance on the larger supply chain and provide for better business continuity in case of disruptions elsewhere. However, establishing a meaningful partnership with hyperlocal players means brands must integrate with them seamlessly on a robust technology platform, making them a part of their supply chain.

5. Sustainable retailing

Using technology and automation to route goods through the shortest possible pathways means savings for brands and other stakeholders, and also reduced levels of emissions. Greater levels of accuracy mean the reduced likelihood of returns and therefore elimination of additional transportation. By leveraging options like distributed warehousing and placing goods closer to the customers, brands are also able to create shorter supply chains, maximize sales and boost sustainability in retail for a better future. 

With technology as the main driving force, these crucial trends are all set to reshape the retail industry and make a lasting impact on how the business is going to evolve from here on. Quite evidently, these trends are expected to create value for all stakeholders, including the environment.

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Technology

Digital Transformation in B2B Commerce

The retail business landscape is changing faster than ever. For e-commerce merchants, that change has come in the form of increased competition, changing consumer preferences, and new technologies that enable retailers to reach new customers. For business-to-business (B2B) merchants, it has come in the form of new business models, new sales channels, and new partners. As a result, there is an urgent need to transform businesses to succeed in this new digital era. Let’s address why that transformation is so significant and how it can positively impact your e-commerce business.

“Digital transformation is a rapidly growing trend in B2B commerce as businesses increasingly turn to technology-driven solutions to streamline and modernize operations.”

The core of B2B digital transformation is innovative technologies such as big data analytics, AI-powered chatbots, and supply-chain solutions that enable businesses to automate processes and improve customer experience. The goal is to use technology to create value for the business and its customers. This can mean anything for B2B merchants, from creating a new online sales channel to implementing a new customer relationship management (CRM) system. It can also mean something as simple as using social media to connect with customers in a new way.

As B2B buyers become more comfortable making purchases online and conducting research on their own, B2B merchants need to find new ways to reach and connect with them.

How digital transformation in B2B commerce can help you stay ahead in the competition?

Digital transformation can help businesses improve efficiency, optimize operations, and better meet the needs of their customers. By embracing digital transformation, B2B businesses can stay ahead of the competition and position themselves for long-term success.

B2B buyers are increasingly expecting the same level of convenience and service from B2B merchants that they have expected from B2C retailers. To meet these expectations, B2B merchants need to be able to quickly adapt and modernize by implementing new technologies that will enable them to sell more effectively and help retain clients.

Digital transformation helps B2B merchants improve customer relationships by using data and analytics to understand their customers better. They can create customized offerings that will lead to repeat business. By implementing new technologies, B2B merchants can save time in routine tasks and focus on developing stronger relationships with their customers.

Digital B2B commerce solutions now enable online roadshows that are a great way to reach out to potential customers by promoting a product or service in a fast and effective way. An online roadshow can be an effective and affordable marketing game plan, for B2B merchants, to put together a large catalogue in the shortest period and with the smallest budget, and create new revenue streams by opening up opportunities for new products and service offerings.

Making B2B business easy, intuitive, and interactive for buyers

A majority of B2B purchases are deliberate and less emotional. There is no room for impulse buys here. So, any product/service suggestions or attempts at cross/upselling you make must be purposeful. AI-driven recommendations can assist with this task.

Since there are multiple stakeholders, evaluations to conduct, and more red tape to go through, the B2B buying process is more time-consuming.  By ensuring that clients receive everything they require at once, you can help them streamline and minimize the lead-time of that procedure.

If you are ready to start the digital transformation in your B2B business, you can do a few things to get started.  First, take a close look at your customer base and identify any changes in their needs or buying habits. Next, evaluate your current sales process, lead time, and other KPIs and look for improvement opportunities. Finally, consider implementing new technologies that work as a catalyst and help you reach your goals.

Digital transformation is a journey, not a destination. There is no one-size-fits-all solution, and the best way to transform your B2B business will vary depending on your specific goals and objectives. However, by taking the time to understand the opportunities and challenges digital transformation presents, you can position your B2B business for success in the years to come.

Conclusion

Digital transformation is a significant topic of discussion in the business world today. And for a good reason: the marketplace is changing rapidly, and B2B merchants need to implement new technology-driven solutions to stay competitive. While challenges are associated with digital transformation, the benefits outweigh the risks. For B2B merchants who want to stay ahead of the curve, digital transformation is the way forward.

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Smart Merchandising Technology

Seasonal Inventory Management: New-Season Allocation & Mid-Season Replenishment

In today’s retail environment of fast fashion, retailers have to replenish their inventory constantly. One of the main challenges faced is finding the right balance between being proactive in forecasting demand and reacting to changes in supply and demand.  

Seasonal inventory management is a business method used to manage inventory allocation and replenishment most cost-effectively and efficiently. The right seasonal inventory management plan can help a business understand its demand patterns and anticipate future demand. This allows retailers to plan their stock levels, new-season allocation, and mid-season replenishment efficiently. 

The first step in seasonal inventory management is to understand customer demand patterns. This can be done by analyzing past sales data and trends. Retailers can also use market research and surveys to gather information about customer preferences. Forecasting demand is tricky, therefore retailers need to consider several factors, including the season, upcoming events, and trends. If demand is overestimated, retailers could end up with too much inventory. On the other hand, retailers could miss out on sales if demand is underestimated.

The next step in seasonal inventory management is developing a plan for allocating and replenishing inventory. Retailers need to decide how much inventory to keep in hand, and how often to replenish and distribute among stores.

Critical Elements of Seasonal Inventory Management

Predictive Demand Forecasting: Predictive demand forecasting uses past sales data to project future demand. Merchandisers can use predictive demand forecasting to plan inventory levels and product mix to have the right products in stock when customers want them. Predictive demand forecasting is essential for seasonal businesses, like retailers who sell summer clothes or winter sports gear. By looking at past sales data, retailers can predict how much demand there will be for specific products in the future and plan their inventory levels accordingly. This ensures that they do not overstock on items that customers do not want to buy and helps them avoid stockouts of popular items. To make predictive demand forecasting more accurate, retailers can use multiple sources, like point-of-sale data, customer surveys, and weather data. This can help them account for changes in customer behavior and demand patterns. Retailers often use various methods to forecast demand, including trend analysis, statistical forecasting models, and market research, to get an accurate picture of future demand and plan their inventory levels accordingly. Merchandisers need to be aware of the latest demand forecasting methods and technologies to make the most accurate predictions possible.

New-Season Allocation: Product allocation is the process of distributing new products to store shelves. When allocating new products, retailers must consider the product’s popularity, shelf life, and the available space in stores to maximize sales and minimize stock-outs. New-season allocation involves organizing how much inventory should be allocated to be sold in the upcoming season. There are a few things to keep in mind when doing this:

– The amount of inventory allocated should be based on data for past sales patterns. If demand was high, then more inventory should be allocated. If demand was low, then less stock should be allocated.

– Allocating too much or too little inventory can be costly. If there is too much inventory, it ties up working capital and can lead to markdowns, too little inventory can result in lost sales.

– The goal is to have the proper inventory to meet customer demand without tying up too much working capital.

Mid-Season Replenishment: Mid-season replenishment involves rearranging inventory during a particular season. If a retailer seeks to maintain optimum inventory health, they will need to replenish before running out of stock. Mid-season changes in demand can be challenging to manage. If demand increases, there may not be enough inventory on hand to meet customer demand, which can result in lost sales. If demand decreases, there may be too much inventory on hand, which will tie up working capital. One way to handle mid-season changes in demand is to redistribute inventory across stores. This can be done by transferring inventory from stores with excess inventory to stores with low inventory levels. Store-to-Store or inter-store transfers will help to ensure that customer demand is met without tying up too much working capital. Modern warehouse technologies are a good investment for optimizing the mid-season replenishment process or making operations leaner. 

Auto alerts for low inventory levels: Retailers can use inventory management software to set up auto alerts for when inventory reaches a certain level. This allows retailers to replenish stock at the shortest lead time, which can help avoid stockouts and lost sales.

Auto-Replenishment of fast sellers: Replenish fast-selling items automatically to ensure they are always in stock while avoiding overstock of less popular items.

Inter-Store Transfers: An inventory redistribution method where inventory is transferred from one location to another. This type of transfer can be used to redistribute inventory based on changes in demand or to avoid stockouts at a particular site. Merchandising solutions can help retailers plan and execute inter-store transfers to minimize the impact on sales.

Adjusting inventory for seasonal fluctuations: Seasonal changes can significantly impact inventory levels. Retailers must be prepared to adjust their inventory levels to account for increased demand during holidays and other peak periods. They may also need to adjust their inventory to account for changes in demand due to weather changes.

Conclusion

Seasonal inventory management can be a complex and time-consuming process. However, it is essential for retailers to stay ahead of the competition and maximize sales. With the right inventory management strategy, retailers can manage seasonal changes and maintain healthy inventory levels. New-age merchandising solutions can help retailers track seasonal trends and make the necessary adjustments to their inventory levels. Auto replenishment of fast-selling items can help ensure that popular items are always in stock while avoiding overstock of less popular items. Inter-store transfers can be used to redistribute inventory based on changes in demand or avoid stockouts, and maintain healthy inventory levels at all times. 

With an effective seasonal inventory management strategy, retailers can increase customer satisfaction and keep inventory costs under control. A well-defined merchandise plan helps retailers tackle the challenges of seasonal inventory management by understanding customer demand patterns. Retailers can thus ensure that they always have the right products in stock.

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Technology

How Distributed Warehousing Benefits e-Commerce

According to a survey, around 33% of customers have higher expectations for fast shipping, 40% for free shipping, and 42% expect a 2-day shipping option for every purchase. As customer expectations rise, e-commerce players face increasing pressure to provide more competent and efficient deliveries. This requires a new outlook toward backed processes and warehousing strategies. More and more companies are switching to the distributed warehousing model, as they provide the required flexibility and faster ecommerce fulfillment that today’s marketplace demands. In this blog, we talk about what distributed warehousing is and why ecommerce players are adopting it as a strategy.

Centralized vs Decentralized Warehousing

Both centralized and decentralized warehousing can be used as a distribution strategy depending upon business requirements, growth, and type of industry. Centralized warehousing means better inventory control, low operation costs, low inbound costs, high-quality standards, and customer service. On the other hand, it leads to high shipping costs for outbound shipments, increased shipping timelines, and a lack of business continuity. All these disadvantages can be covered by decentralizing your warehousing or opting for warehousing distribution.

Distributed warehousing is a business approach where a business fulfills, ships, or distributes goods from multiple smaller and strategically located warehouses. This enables businesses to locate the products as close to their end customers as possible, thus reducing the time and cost of delivery. Distributed warehousing allows brands to perform a number of functions, that is, storage, distribution, fulfillment, and cross-docking in a more flexible and efficient way.

When to go for distributed warehousing

As brands gain a larger market share geographically, the outbound costs of fulfillment from a centralized warehouse tend to rise as well. This is primarily due to the growing distance between the warehouse and the end customers. At one point, having a new warehouse close to the customer becomes more affordable as compared to fulfilling from a faraway centralized warehouse. Following the conventional cost-benefit wisdom, this is when businesses tend to make the switch to a distributed warehouse model.

How Distributed Warehousing Benefits Brands

As businesses expand geographically, managing the different aspects of a supply chain can become increasingly challenging. Packages may have to go through various locations or be routed through complex pathways before they reach the end customer. These complexities can be handled better by a distributed warehousing strategy. 

Short supply chain

By shortening the supply chains and fulfilling locally, e-commerce companies can reduce their transportation costs, ensure quality in case of perishables, provide faster order fulfillment, and reduce transportation risks. It also allows businesses to rise up to the new challenges of same-day delivery. Besides, shorter supply chains are a step in the direction of sustainable business, as these involve lesser CO2 emissions, reduced transportation costs, and the least possible environmental impact.

Lesser shipping and fulfillment costs

Speed of delivery is crucial but the cost of delivery is even more so, from the commercial point of view. This is all the more important as customers increasingly expect free delivery from their trusted brands. In most cases, the cost of shipping is a function of the shipping distance. Therefore, by locating the warehouses closer to the customer clusters, businesses can cut their average shipping costs.

Robust Business Continuity Plan (BCP)

A number of unforeseen incidents or catastrophes such as fire, floods, pandemic, and conflict, can disrupt businesses and their supply chains. Having alternative storage and routing facilities in place, courtesy of distributed warehousing can support business operations even during emergencies. Glitch-free operations and on-time promised fulfillment can go a long way in maintaining customer satisfaction and upholding brand reputation. 

Benefits of Outsourcing Warehousing Distribution

Distributed warehousing is well in line with outsourced warehousing as they allow the replacement of CAPEX with OPEX for an expanding business. 3PL providers in fact play a significant role in ensuring seamless operations while enabling brands to control their logistics costs. Their warehousing and distribution services are aimed at maximizing efficiency in terms of storage and distribution of goods. With outsourced warehousing, businesses can also enjoy greater scalability in times of peak demand or rapid business growth.

Outsourced warehousing and fulfillment takes the burden off the shoulders of the management, and allows them to focus on their growth strategy. As a substantial portion of supply chain management goes into the hands of the 3PL partner, they can bring in better integration, problem-solving, innovation, and integration.

How does WMS fit into the puzzle?

Managing multiple warehouses, keeping track of the collective inventory across warehouses, picking and shipping the right items, and tracing packages as they are routed through the increasingly complex supply chain requires an automated solution. A Warehouse Management System (WMS) takes care of all these processes which could appear rather overwhelming as distributed warehousing takes full effect. A WMS helps avoid errors, ensures high-level performance accuracy, and keeps your supply chain well-oiled.

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Technology

Faster Omnichannel Order Fulfillment is the Future of Retail

Speed is one of the defining factors of omnichannel order fulfillment. According to a recent Mckinsey report, when delivery times are too long, almost half of the omnichannel customers will shop from elsewhere. To match growing customer expectations, brands like Amazon started off with an 8-day delivery horizon in the early 2000s, accelerated to two-day shipping by 2015, and even same-day deliveries in some markets by 2019. 

In fact, best-in-class omnichannel operations can now provide order fulfillment within two hours of purchase. Omnichannel has transformed order fulfillment by introducing dynamic routing of packages. Brands don’t just follow a linear fulfillment path from the warehouse to the customer, but even use their stores for order fulfillment.

Benefits of Omnichannel Order Management

Omnichannel order management orchestrates all orders across the enterprise and allows access to customer, order, and inventory information across channels. Here are some of the most significant benefits of omnichannel order management.

  1. Faster shipping at a lower cost: By utilizing nearby warehouses and stores, brands are able to deliver to their end customers faster and at much lower costs.
  1. Multiple purchase channels: Omnichannel offers customers endless options to choose from. Customers can buy online, in-store, or buy online and pick up in-store, as per their convenience.
  2. Personalized shopping experience:  By having a 360-degree of the customer, brands offer a uniquely personalized omnichannel experience to their customers that best suit their needs and ensures convenience.
  3. Real-time visibility: Omnichannel provides visibility of inventory across the channels and enables brands to provide updated and accurate information to customers.
  4. Empowers employees: With omnichannel OMS, employees can have information on real-time inventory, availability, and shopping history at their fingertips. This enables them to serve their customers more effectively.

Tackling the Same-Day Delivery Challenge

Same-day deliveries have become a new normal in many industries and among large urban customer groups. An ideal omnichannel strategy can help address the challenges of same-day delivery by offering a more flexible and agile supply chain support. With their dense network of stores, retailers can ensure greater proximity to their customer groups. Having the right kind of IT and automation support, brands can coordinate among channels, to offer the fastest-possible fulfillment. 

The evolving role of brick and mortar stores

Even though online shopping has made a serious leap during and since the pandemic, in-store shopping is not going away. Brands need to reimagine the role of their brick-and-mortar infrastructure, as they can act as strategic assets for same-day delivery. In doing so, they can maintain their current layouts, fully transform into dark stores or become a hybrid of the two. Stores also have a crucial role to play in building brand experience for customers and a way to give a first-hand experience of products.

Physical stores are a critical link in the process of channel integration, and keep the customer journey across channels seamless and fluid. According to a recent Mckinsey survey, senior executives from the ten largest North American retailers reported that during the pandemic, they received higher growth in e-commerce sales in areas with a physical presence as compared to those without brick-and-mortar stores.

Is Omnichannel the Future of Retail?

Customers are rapidly developing a taste for path-breaking fulfillment ideas like BOPIS (Buy Online Pick up In-Store), and the Click and Collect model that enables them to order online, and then simply walk into a nearby store to collect the product. Omnichannel commerce evidently offers ease, agility, and unprecedented levels of CX. 

By offering highly personalized communications and services, omnichannel puts each individual customer at the very center of e-commerce operations. It provides brands with a great opportunity to collect more data and track customer behavior across distribution channels. This translates into better-informed business decisions and more effective strategies.

Omnichannel offers customers a consistent and coherent shopping experience, also ensuring better customer service as the operations rely on a common and centralized database. No matter where the customer makes the purchase finally, they can research the product on numerous channels of distribution to receive the same information. This ensures seamless CX and the highest levels of customer satisfaction.

Finally, the omnichannel retail strategy helps create shorter supply chains, which significantly reduces the overall distance, costs, and emissions. Omnichannel is therefore the right step in the direction of sustainability and can bring lasting benefits to businesses, industries, and regions most sensitive to environmental impact.

Omnichannel is clearly a peek into the future of retail. As it evolves, an ecosystem of innovative solutions such as Distributed Order Management (DOM) will emerge. DOM systems are software solutions that orchestrate various processes and automate functions like order routing, splitting, shipping, forecasting, and inventory management. Solutions like these will reinforce the idea of omnichannel and drive the transformation of e-commerce further.

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Technology

E-commerce Inventory and Order Management with Scalable WMS

Businesses demand rapid scalability from brands and retailers, especially in times of peak demand and business growth. When your website takes up to 5 seconds to load, there’s a 90% chance that your customers will bounce to a competitor’s site instead. During the season, there could be a significant ebb and flow in demand due to factors like weather, end-of-season sales, or festivity. Dealing with seasonality, therefore, requires a robust and agile warehouse management system to facilitate scalable operations just when they’re needed.

What is WMS?

A Warehouse Management System consists of software and processes using which retailers can control and administer warehouse operations. When the demand peaks, an ideal WMS must ensure that orders are captured and fulfilled accurately. A cloud-based WMS like Increff WMS can scale quickly as a business is growing or experiencing spikes in demand. A scalable WMS offers the right picking, packing, and inventory management even under pressure.

How to manage inventory and warehousing operations efficiently with WMS

  • A warehouse management system allows you to match orders to facilitate accuracy in inbound and outbound logistics. By optimizing and automating the receiving process, a WMS ensures that errors are reduced. 
  • Using serialization or barcoding, a WMS keeps track of batches for effective inventory control, even during peak sales time, thus providing a consolidated view of the available inventory in real-time.
  • Automating the processes for allocation, replenishment, picking, printing labels, and fulfillment, a WMS helps meet peak demand efficiently. 
  • It offers accurate and error-free picking to avoid wrong delivery, unnecessary return, and loss of sales.
  • Managing reverse logistics efficiently in case a customer returns an item, a WMS facilitates the circulation of the product back to the sales channels immediately.

What are Economies of Scale in Warehousing?

Times of peak demand and drastic business growth provide retailers with a unique opportunity to sell huge volumes of products. This helps them accrue the benefit of “economies of scale” which essentially refers to a reduction in the per-unit cost of an item due to the huge volume of sales. 

By providing efficient operations, centralized warehousing, and large storage capacity, warehouses provide economies of scale. For instance, instead of shipping individual packages, large batches of items are shipped to the stores at the same shipping cost, thus reducing the cost per unit item. Likewise, the storage costs per unit product decline during peak demand due to large volumes in the warehouse, as opposed to fewer items during periods of normal demand.

What is Order Management; Processing, and Fulfillment?  

Order management is a vital part of operations for any e-commerce business. It starts with tracking and monitoring orders which can only be ensured with automation provided by a WMS system. This is especially true during rapid business growth and peak demand, to avoid errors and manage orders with accuracy and agility.

Order processing refers to the process or workflow from placement to delivery where reliability and accuracy are a must to ensure customer satisfaction. Picking, packing, sorting, shipping, and tracking are important steps that form part of order processing.

The entire process from when the sale takes place till the product is delivered to the customer is known as order fulfillment. This depends on 3PL partners and is augmented by an efficient WMS solution that helps drive the whole process without errors and inaccuracies. 

Perfect Inventory and Order Management for Scalability

An inventory management system can be quite complex with a number of moving parts which can cause shortages if not handled well. Inventory management for a business that is scaling up begins with forecasting the demand as accurately as possible. Projections based on past data or recent trends in customer behavior can help have the right inventory to avoid under or over-stocking. 

Having strong relationships with vendors and partners can help ensure seamless supply during peak demand. Vendors who have open stock inventory can fulfill orders as needed, this is on-demand manufacturing or Just-In-Time inventory management.

Finally, with automated order management systems, retailers can avail the benefits of APIs that offer flexibility, efficiency, and scalability. These enable a retailer to streamline operations while catering to huge customer demand.

Scalability is one of the most essential features of a WMS as it allows a retailer to meet the growing challenges of a burgeoning marketplace. Not having ample scalability means loss of sales, dent in a brand’s reputation, dissatisfied customers, and plummeting revenues.

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Technology

Building Integrated Digital Supply Chains for Omnichannel Retail

Supply chain integration brings together all the functions in omnichannel fulfillment into a single system. It necessitates careful coordination and alignment to ensure everyone is working towards the same objective. Supply chain integration is an ongoing process that needs to be regularly updated and tweaked as the business evolves.

Most common Supply Chain Integrations: 

  • Vertically integrated Supply Chains: Vertical integration occurs when a retailer takes control of one or more stages in the fulfillment process. Thereby, owning multiple stages of the process with the aim of increasing market share and gaining tighter control over the supply chain. Vertical integration can be backward, towards procurement & production, or forward towards the end consumer. 
    • Backward Integration: When a retailer expands across multiple supply chain segments beyond its value chain, e.g. merging operations with another company that provides the goods or services required for omnichannel fulfillment. A basic example of backward integration could be that of a fashion retailer partnering with a garment manufacturing unit.
    • Forward Integration: When a retailer takes control of the business activities ahead in the value chain, expanding to the next levels of the supply chain and getting closer to the end consumer in the value chain. For example, a fashion retailer pursues forward integration if it partners with a last-mile delivery company.

Marketplaces are a great example of vertical integrations. They bring together sellers and buyers in a single platform, making it easy for both to find what they need; a greater reach to a larger audience, and better prices.

  • Horizontally Integrated Supply Chains: Horizontal integration is a strategy when related or similar functions being done by multiple companies merge. In its most basic form, horizontal integration is acquiring a commercial entity operating in the same industry or level. In this technique, a company takes control by buying, merging, or seizing control over other businesses in the same sector’s value chain. Actual examples of horizontal integrations can be Adidas with Reebok and the merger of Vodafone with Idea. 

ERPs are an excellent example of horizontal integrations. They combine the various functions of a company, such as accounting, marketing, and purchasing, into a single system, thus allowing companies to streamline their operations and making it easier to track inventory and sales.

Benefits of Supply Chain Integration:

  • Improved control over distribution
  • End-to-end visibility
  • Enhanced flexibility to demand fluctuations
  • Increased efficiency
  • Cost savings
  • Improved customer satisfaction

Methods for increasing productivity & effectiveness through integrated supply chains:

  • Present and Future Business Mapping: Determine the present level of supply chain integration and the gap to reach the future desired state. This mapping could be done at four broad levels:
    • Basic: At this level, the extent of the silo approach needs to be mapped; if various departments within the company work on issues separately and disconnected.
    • Functional: Map the information flow within the company to determine the dependability and responsiveness of interdepartmental working.
    • Internal: Determine if all departments and functions are connected to one IT structure, use insights from central data analytics and inter-related information dashboards. Additionally, map the alignment of overall company objectives, for example, the customer-first approach, along the entire value chain.
    • External: Determine if all vendors and service providers in the supply chain collaborate and operate almost as one to meet customer demand, boost efficiency and profits, and meet OTIF.
  • Data Integration and Data Analytics: Consumers produce an enormous amount of data, that can significantly impact supply chain management and improve demand forecasting. Using consumer and corporate data to identify threats and opportunities in the supply chain can assist retailers in mitigating risks in omnichannel fulfillment. This is only feasible if supply chain system integration is implemented. Also, real-time updates are essential for effective supply chain integration. Everyone involved in the process needs access to up-to-date insights to make quick decisions based on the latest data analytics. Supply chain planning with real-time data analytics ensures economies of scale, OTIF, and that inventory is correctly aligned with demand.
  • Integration with Logistics Partners: This ensures that products are stored in distribution warehouses and delivered to the customer quickly and efficiently. Crucial for supply chain integration is better collaboration with vendors through connected systems, leading to overall improvements in inventory management. End-to-end supply chain transformation is required to implement a successful last-mile plan. Retailers must establish a last-mile strategy that addresses their current end-to-end supply chain inadequacies and aligns them with the final objectives. A digitally integrated supply chain, for example, may help distribution centers construct a comprehensive last-mile solution that reduces delivery lead times.

Digital supply chain integration strategies are essential for companies looking to fulfill orders through omnichannel retail. Businesses can streamline their operations and provide a great customer experience using the right tools and tactics. Bringing all the stakeholders together to streamline processes as one continuous and transparent flow might be challenging. There are, however, a variety of tools available today that can make the process of supply chain integration simpler.