8 Ways to Make Your Fulfillment Center Run More Efficiently
- 1 Accurate inventory is foundational to success
- 2 Make sure your WMS is meeting your needs
- 3 If you don’t have a WMS, it’s probably time to get one
- 4 Smart SKU slotting is essential
- 5 Give your employees the tools to succeed
- 6 Improving your receiving process will pay big dividends
- 7 Know what’s coming
- 8 Get your hands dirty
This is a guest post contributed by Halle Summers. Halle is a Marketing Coordinator for FASTENation Inc. When she isn’t writing blog articles, she enjoys spending time in downtown Charleston, South Carolina and all the amazing food her hometown has to offer.
Almost all fulfillment centers want to improve pick and pack efficiency. Supply Chain 24|7 reports that up to 50 percent of labor resources at a fulfillment warehouse are often dedicated to the picking-to-shipping process. Many warehouses, however, don’t know how to make proactive changes in their process. They’re stuck in a reactive mindset that keeps them off-balance and prevents them from hitting their stride. The good news is that organizing and optimizing a fulfillment center often doesn’t require a complete reorganization. In fact, there are some steps you can start implementing now! Check out these eight top areas to focus in for fulfillment efficiency and pick one or two to improve your efficiency.
1. Accurate inventory is foundational to success.
Many of the biggest hurdles to fulfillment center efficiency start with inventory control issues. If you can’t keep an accurate count of inbound, outbound, and in-stock inventory, it’s hard to keep everything else together. A good old-fashioned top-to-bottom inventory count may be necessary if you’re experiencing severe issues. Otherwise, look into your cycle counting practices and your labeling system. If you have a warehouse management system (WMS) that’s functioning correctly, these should be easy enough to look at. Once you know what’s in your inventory, make sure you don’t let it slide back into chaos by investing in an inventory management tool.
2. Make sure your WMS is meeting your needs.
A WMS is a critical tool for optimizing any warehouse operating at scale. When implemented well, these systems allow fulfillment centers to synchronize each aspect of the warehouse, from SKU layout to bills of lading to picks. Take stock of how long you’ve had your WMS and look at your warehouse KPIs for that period. Where has your system performed well? Where could it improve? Are your employees fully trained on all relevant job functions involving the WMS? Answers to these questions are all relevant for this high-value asset that should be driving efficiency.
3. If you don’t have a WMS, it’s probably time to get one.
If your business is big enough to have multiple fulfillment centers, it’s big enough to need a WMS. There are so many types of WMS now available for all industries and at all price points that you’re almost guaranteed to be able to find one that meets your needs. Take some time to browse a list of WMS software and consider your needs. There are systems specialized for point-of-sale integration, internet-only retailers, businesses that manufacture and sell their own products, and almost every circumstance one could think of.
4. Smart SKU slotting is essential.
Picking process optimization demands that managers think at the level of minutes and even seconds. When you’re fulfilling hundreds or thousands of orders per day, small slivers of time add up to significant blocks. You can use metrics like size, storage, and velocity to help optimize slotting efficiency. They’ll help you arrange your warehouse to ensure easy access to frequently-picked items, cluster items together that are often ordered in groups, and minimize time spent in lifts for vertically organized warehouses.
5. Give your employees the tools to succeed.
Fulfillment is ultimately a ground-level process. Sometimes, it doesn’t matter how good your ideas are; if your people don’t have the tools they need as they’re doing the work, they can’t optimize their workflow. This can be as simple as making sure you’re well-stocked with common warehouse materials like Glue Dots for easy labeling and pallet straps. For larger warehouses, it can often involve big decisions about whether to implement barcode scanners or RFID devices. Either way, there’s a clear message: for the work to get done, the tools must be present.
6. Improving your receiving process will pay big dividends.
Receiving is a great example of the principle that making the beginning of a process as efficient as possible often has positive downstream effects. Slotting, picking, and packing can all realize productivity gains from an improved receiving system. The internet is full of tips on improving and streamlining your receiving, but there are common themes including:
- Making sure all inventory is properly labeled and categorized as quickly as possible after receiving
- Using a system like RFID scanning or barcode scanning to check in inventory faster
- Scheduling enough staff so that pick-and-pack employees don’t have to pull double duty receiving
- Sending bills of lading and other paperwork ahead of time through your WMS to reduce time spent on paperwork
7. Know what’s coming.
The best way to keep your warehouse prepared is by avoiding surprises. Most distributors do this by stockpiling any items they foresee a demand for, leading to excess and (eventually) obsolete stock. While overstocking leads to high service levels, it also leads to capital tied-up in excess and obsolete stock and additional storage space, insurance, and maintenance costs for those items – so in the long run, the high service levels don’t pay off as much. With accurate demand forecasting with an inventory management tool, however, distributors can make sure that they have what they need when and where they need it without having to overstock items and risk lost capital.
8. Get your hands dirty.
KPIs can tell you a lot, but you’ll always be missing a dimension if you haven’t seen the process with your own eyes. Of course, regular site visits aren’t always realistic, but there are other ways to stay better connected with the operational reality of your fulfillment centers. Whether it’s regular video chat sessions or keeping a Slack channel for inter-level communications, it’s vital to have a window into the ground-level situation.
The key to maintaining the relationships necessary for this trick to work? Scheduling these proactively to create a rapport and a sense of trust and communication. Employees respect leaders more who reach out before they need something.
Fulfillment centers are large, complex entities that can eat up more than their fair share of resources if not managed appropriately. That’s why it’s so important for leadership to take a proactive approach and lead by example in creating and applying best practices. The highest-performing fulfillment networks have put considerable effort into developing communication, transparency, and efficiency in their warehouses—and the results are easy to see.
FASTENation Inc. is a performance driven WOMEN-OWNED fastener company with offices in Clifton, New Jersey and Charleston, South Carolina. Founded in 1997 by Jayne and David Petak, the organization provides a broad range of fasteners and converting services globally to more than 50 countries.