The efficiency of your warehouse logistics operations plays a vital role in how the rest of your supply chain functions. If things move seamlessly inside your warehouse, then your overall supply chain also moves with minimal glitches. This is why it’s crucial for ecommerce retailers to optimize their warehouse logistics so they can enhance productivity and ensure timely fulfillment.
In this guide, we take a closer look at what warehouse logistics entails and what happens when it underperforms. We also share some of the key challenges that you might experience and how you can improve your warehouse logistics. Let’s find out.
What is warehouse logistics?
Warehouse logistics refers to the process of planning, organizing, and controlling how goods move within your warehouse. It involves every aspect of the inflow of inventory such as receiving, put-away, and storage. It also involves the outflow of inventory, which includes picking, packing, and shipping.
Moreover, warehouse logistics also relates to the information flow associated with the movement of inventory. This information flow needs to move transparently and seamlessly for goods to be transported within your warehouse as they should be.
For example, when goods are received in your warehouse, they go through a scanning and sorting process so they can be recorded into your inventory management system and assigned to the correct storage locations.
What happens when warehouse logistics underperforms
When the logistics operations in your warehouse don’t function as they should, there can be a significant impact on your overall business. Here are some of the main impacts of an underperforming warehouse logistics.
Unnecessary overhead costs
In most underperforming warehouses, overhead costs and unnecessary expenses can add up significantly over time. Tasks may take longer to be completed or may require a lot more resources to be completed because of improper planning and allocation. For instance, you may have to regularly pay overtime to complete certain tasks because you’re lacking the workforce needed for your existing operations.
Delays in order fulfillment
If different aspects of your warehousing operations aren’t functioning as they should, it will significantly delay the inventory outflow, mainly related to order fulfillment. Even with a slight delay in one warehousing process, you could experience a setback in the fulfillment aspect because the flow of inventory isn’t as seamless as it needs to be.
For example, workers being unable to move efficiently in the warehouse means that there will be delays in order picking, which will eventually delay the packing and shipping processes as well. Similarly, storing items in the wrong location means workers will spend more time hunting down the right SKUs from their picking list.
Impacts the customer experience
When things move slowly in your warehouse, it means your customers aren’t getting their orders when they should. Since there’s a significant delay in key warehousing processes, the fulfillment process is slowed down, causing delays in order shipping and delivery. Moreover, there may be issues with picking accuracy and product damages if there are problems in your warehouse logistics. All of these can contribute to a poor overall experience for your customers.
Increased risk of shrinkage and deadstock
In some cases, inefficient warehousing operations and storage planning can lead to damaged goods and at-risk inventory. This may be due to misplacing certain items, storing them in the wrong location, or even using poor shelving systems that can’t hold the items properly.
As such, you could experience inventory shrinkage due to losing the items or damaging them in storage. Sometimes, the misplaced items may turn up well after their expiration date, leaving you with deadstock that’s expensive to carry and time-consuming to get rid of.
Challenges of warehouse logistics
While every business would want to avoid the above issues, managing your warehouse logistics can be extremely challenging. Here are some of the leading challenges you should prepare for in your warehouse logistics.
1. Safety and security
Although you want your warehousing processes to move quickly, this could lead to an increased safety and security risk if not planned properly. For example, if you’re not using the right shelves but you still expect workers to quickly hunt down and pick items for order fulfillment, it puts them at risk of mishaps and accidents. Similarly, a poorly planned warehouse layout could prevent workers and warehousing vehicles from moving freely without knocking over something.
It’s important for businesses to regularly conduct warehouse inspections to ensure that safety protocols are met and that products are stored according to specifications for greater efficiency. This inspection process will also detect any safety hazards or malfunctioning equipment that could pose a safety risk.
2. Keeping accurate records
Many warehouses also struggle with keeping accurate inventory records, which can be detrimental to the information flow and subsequently affect warehouse logistics. Warehouses need an inventory management system to centralize all their inventory records and keep them updated in real-time. This system will automatically record data inputs from different parts of the warehouse and store them in a central location for relevant team members to access.
Additionally, conducting regular inventory audits is also essential to ensure that inventory records are accurate and updated. This will ensure that you’re working with reliable data that’s up-to-date so you can make informed decisions.
3. Inventory management
Issues with inventory management are one of the biggest challenges in warehouse logistics. Any inaccuracies related to inventory can cause major issues in your warehousing operations. For example, storing a SKU in the wrong location means workers will constantly have trouble locating the item for picking, which will subsequently cause delays in fulfillment.
Similarly, if you’re not reordering inventory at the right time, you could end up with stockouts. This will translate to long lead times as you wait for a fresh batch of inventory to get delivered to your warehouse. Moreover, you’ll end up with disappointed customers who might even turn to your competitors to find the product they want to buy.
4. Supply chain setbacks
Other setbacks in your supply chain operations, especially those outside of your control, can also add to the challenge of managing your warehouse logistics. These types of setbacks are often inevitable and, therefore, unavoidable even with proper supply chain planning. For example, extreme weather conditions may cause unexpected delays in inventory delivery. This means you’ll experience some delays in inventory replenishment.
As such, when the inventory does arrive, you may have to deal with the backlog by assigning extra labor to handle inventory receiving and storage. This means you’re diverting resources from other aspects of your warehousing operations, which can further disrupt your warehouse logistics.
Businesses need to improve their supply chain agility to ensure that they can effectively handle any unexpected setbacks. Having real-time access to supply chain data and leveraging automation tools are some of the key ways to build a more agile supply chain.
Tips for improved warehouse logistics
So how do you overcome these challenges and improve your warehouse logistics? Here are a few tips and ideas to get started.
1. Cross-train employees
To maintain a well-functioning warehouse logistics, you need to be able to complete different warehousing operations in the shortest amount of time possible without spending too much money. This is why it’s important to ensure that your warehouse staff is equipped with the necessary skills to perform a wide variety of tasks so workforce allocation can be flexible and adjusted based on your current needs.
For example, let’s say you need extra help in the receiving bay due to backlogged inventory deliveries. You should be able to allocate some of your team members from other departments to the receiving bay so they can speed up the process of receiving, scanning, and sorting your inventory. Cross-training is one of the best ways to improve vital warehouse KPIs such as receiving efficiency, put-away cycle time, picking efficiency, and picking accuracy.
2. Maintain health and safety standards
Accidents in the warehouse can significantly set your operations back, which will in turn affect your warehouse logistics. If there’s some kind of damage to your equipment or to a part of your warehouse, for example, workers won’t be able to move as efficiently to complete various tasks.
Or in some cases, if your workers get injured due to these accidents, it could leave you short-staffed and unable to continue with your regular warehousing operations. That’s why it’s crucial to ensure that you maintain proper warehouse safety standards that could prevent these accidents and damages from happening in the first place.
3. Automate operations
Automation can be a godsend for businesses that want to improve their warehouse logistics. You can leverage software and tools to automate various aspects of your warehousing operations, which will speed up your processes and enhance the flow of tasks.
Automated fulfillment is one of the most popular automation solutions that can be leveraged inside a warehouse. This would involve leveraging the right software to automatically process your orders and send them to your warehouse. You could also use various tools to automate some aspects of your picking and packing processes.
Additionally, some aspects of your shipping operations can also be automated. You can use software to automatically compare the prices of different carriers, allowing you to narrow down the best option for the order. Plus, you can even automate the process of generating shipping labels and assigning them to packages.
4. Warehouse management system
Using a robust warehouse management system is the key to improving your warehouse logistics. This system integrates with other essential warehouse technologies and provides visibility across various departments. Workers will have access to the most updated information in real time, which will allow them to perform their tasks accurately and efficiently.
For starters, you can maintain accurate inventory counts as inventory data is recorded in real-time at various touchpoints. Since it automates some of your operations, it helps you save time by reducing the need for time-consuming manual tasks. Moreover, a warehouse management system helps you determine shipping times more accurately so you can look for the speediest shipping options.
5. Consider using a 3PL
Working with a third-party logistics provider is the fastest way to ensure optimal warehouse logistics for your ecommerce business. This would involve outsourcing most of the warehousing, inventory management, and fulfillment operations to the professionals. So you wouldn’t have to worry about the complicated and time-consuming process of fixing or managing your own warehouse logistics.
A 3PL can store your inventory at its fulfillment centers, where professionals manage your inventory on your behalf. Moreover, these fulfillment centers will be in charge of other warehousing operations including receiving, picking, and packing.
ShipBob has warehouse management software that improves warehouse operations
When you work with a 3PL like ShipBob, you can leave your entire warehouse logistics processes to the professionals. Take advantage of ShipBob’s distributed fulfillment centers to safely and strategically store your inventory, where a team of warehousing professionals will take over the process of managing your inventory on your behalf.
ShipBob’s proprietary warehouse management software further adds to the package by giving you full visibility into your warehousing operations. You can use this software to maintain accurate inventory records and keep track of how orders are moving across the warehouse. The software lets you track inventory levels, shipments, and returns. It also automatically pulls up the rates and transit times for different carriers so you can narrow down the fastest yet most affordable shipping option.
If you’re already managing your warehouse logistics effectively but just need a little help, ShipBob’s Merchant Plus solution might be the best fit for you. Merchant Plus gives you access to powerful warehouse and inventory management tools while managing your warehousing operations in-house so you can get improved visibility and efficiency to optimize your logistics.
Ready to get started with ShipBob?
No matter if you want to outsource your fulfillment or utilize a best-in-class WMS in your own facility (or a combination of both), ShipBob has a warehouse logistics solution for your business. Request a quote to get started.
Warehouse logistics FAQs
Below are answers to the most common questions about warehouse logistics.
What are the advantages of using a warehouse?
Using a warehouse gives you greater control over how your inventory is stored and managed. This may be necessary to prevent issues such as shrinkage and damage that may affect your bottom line.
What are the advantages of using a 3PL?
Using a 3PL allows you to save time and improve efficiency by outsourcing most of your warehousing operations to the professionals.
How does ShipBob help with warehouse logistics?
ShipBob has various solutions to help achieve seamless warehouse logistics for your brand.
When you outsource fulfillment to ShipBob, you gain access to software that gives you visibility into how items are moving through the warehouse and access to real-time inventory and order data.
If you have your own warehouse, ShipBob’s award-winning cloud-based merchant application and proprietary warehouse management system known as Merchant Plus can be implemented for your facility.
Are warehouse logistics jobs in high demand?
Reaching nearly $13 billion USD in 2023, the global logistics market is rapidly growing. Warehouse logistics jobs are some of the most lucrative and in demand in the job market today.