Fulfillment 101 (Part 2)

There is no “right” way to lay out a warehouse and workflow for ecommerce fulfillment. There are many options available that all vary in levels of efficiency. Your job is to find the most efficient use of your space, understanding that the space itself (and other factors) may limit your efficiency.

To give you a brief example of what I am referring to, a fulfillment warehouse that we own ships about 800 different SKUs. The products themselves are small and light and the average shipment is a small box containing a few items. Due to an explosion of growth that has tripled the inventory on hand, the space is crowded and not ideal. In fact, we are moving out of it within weeks to a larger warehouse.

While there are many ways to pick orders, the only one really available to us is single-order picking. In other words, an employee uses a barcode scanner to navigate the picking area, finding items and placing them in a basket. The basket is then moved on to the packing area.

In this scenario, the biggest inefficiency is walking. It takes a long time to pick an order if the products in the order are on shelves a long way from each other. Consequently, we made a decision to limit the inventory on those shelves so that we can get more products on each shelf, limiting the number of shelves we need and the amount of space the shelves need to take up. Less space translates into less walking, which increases efficiency.

On the flip side, focusing on efficiency in picking orders actually decreases efficiency in other areas. For example, every picking warehouse is going to have an overflow area which contains the extra stock that will not fit on shelves. Transferring the stock from overflow to the picking area as needed is another process called restocking, and the efficiency of that process has to be considered too. Reducing the inventory on the shelves in the picking area increases efficiency in picking but it makes the restocking process more inefficient. Restocking has to occur more frequently and usually is more time-intensive when it does occur. ( I will not go into all the reasons for that here.)

So, while our picking process is pretty efficient in that warehouse, the restocking process is far less efficient than it needs to be and has to be done more often. We knew that this would all be true when we planned the space but tradeoffs have to be made. At a certain point, the only real improvement available is upgrading to another better space and that is what we have chosen to do.

As you can imagine, deciding on an ideal warehouse layout and workflow is complex and highly dependent on many factors. I cannot even begin to tell you what to do in your own situation without a lot of data, but here at least are some considerations you should be thinking about.

  • How big is the space? Is the space cut up or open? How high is the ceiling?
  • How many employees will be picking? Can these same employees do restocking?
  • How many different products (SKUs) are you shipping and how big are they?
  • Do you have the option for alternative picking strategies to traditional single employee/single order piece picking (such as wave picking or zone picking)?
  • How convenient is your overflow area to the picking area? How much effort is required to restock the picking area? Is there the possibility to give up a bit of efficiency in the picking area to have a sort of intermediate overflow area?
  • Do you have room for efficiency tools like conveyors?

One thing I want you to notice is the importance of space. The quality and size of the space is always going to be directly related to efficiency. I am not saying that you need to go out and lease a warehouse twice the size of the one you are in now, but if you can do some calculations to put a cost on the lack of efficiency in your current space, you may find that it absolutely makes financial sense to upgrade.

I will discuss this further in a future blog post and also address the other key areas of the warehouse such as packing and shipping stations. In the meantime, if you need help, contact us.

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