Amid the prevalence of online shopping and same-day deliveries is an unsung hero that helps facilitate the manufacture, import, export and transport of goods — warehousing.
A must-have solution for any company in the business of selling physical goods, warehousing allows them to manage their supply chains and optimize their order fulfillment processes. This, in turn, results in improved productivity, more satisfied customers and higher profits.
What is Warehousing?
Warehousing refers to the act of storing inventory in one or multiple locations for the purpose of packing and distributing them to customers later. But warehousing is more than just a storage solution. It is fundamental to the success of an e-commerce business, helping optimize its supply chains and prevent risks and disruptions.
This solution also comes with services like inventory management, picking and packing and order fulfillment, satisfying a company’s shipping needs at scale.
Warehousing vs. Warehouse
The terms “warehousing” and “warehouse” are often mistaken as one and the same. But they have some stark differences. A warehouse is a physical building or location where businesses can store items and keep them secured.
On the other hand, warehousing encompasses a wider range of services. It refers to the process of using and optimizing inventory in a warehouse, including product maintenance and handling, picking and packing, order fulfillment and more.
The functions of warehousing are typically done in a warehouse facility. But, although rare, businesses can also utilize office spaces or manufacturing facilities as a hub for their warehousing operations.
Operational Components of Warehousing
Warehousing operations cover the entire process of getting a customer’s order ready for transport to its delivery destination. This spans four crucial operational components:
Pick and Pack
Pick and pack is the process of selecting the products that make up a customer’s orders, checking them and then packing them for shipping.
Inventory Management
Inventory management is one of the key components of an optimized supply chain. Warehousing helps businesses track, measure and update their inventories, which gives them real-time insights on stock-outs, as well as underselling products.
This information is crucial for a well-managed supply chain, ensuring that the company retains a healthy inventory that isn’t prone to over or under-stocking.
Order Fulfillment
Warehousing can facilitate the entire order fulfillment process, from the moment the order is placed to when it leaves the facility for delivery. It ensures that every leg of order fulfillment is done correctly and that the goods are shipped out as quickly as possible.
Warehouse Management System
Warehousing providers integrate warehouse management systems (WMS) into their facilities to make it easier for businesses to oversee the activities in the warehouse, store their inventories and achieve operational efficiency.
Key Warehousing Processes
The role that warehousing plays in modern trade involves five key processes.
Receiving
Any goods or products coming from suppliers will head to the warehouse for staff to receive. This process sounds simple, but many intricacies are involved to ensure that the goods received are correct and of quality, according to the specifications of the order.
Warehouses may receive inventory as a single shipment or multiple smaller shipments from the manufacturer or distributor. When receiving products, warehouse staff will inspect the goods side-by-side with the packing document, check for damages and investigate any cases of damaged or lost goods. Once these are complete, they will proceed to place the products in the putaway area.
Putaway
Putaway refers to moving the goods from the receiving area to their respective storage locations within the facility. For this process, equipment like wheels, rails, forklifts, pallet jacks or automated machinery may be used.
When the products reach their storage locations, warehouse staff will need to calculate each item’s space requirement and organize similar goods in groups or pallets for easy picking and packing.
Picking
Picking is not as simple as grabbing the item the customer ordered from shelves and then sending it away for packaging. In fact, this process takes up over 60% of a warehouse’s resources and accounts for 55% of its operating costs.
With warehousing solutions taking on this task for you, you can achieve better supply chain productivity and save on operating expenses.
Packing
When the customer’s orders have been picked and combined together, the next step is packing and getting them ready for shipment. This process involves putting the items in their respective containers, weighing them, printing labels and coordinating with the delivery service or carrier on when to pick up the packages.
Shipping
Then the packages are turned over to the respective carriers to deliver to the recipient’s doorstep. Some warehouses also offer a Buy Online, Pick Up In-Store (BOPIS) service that allows the customer to pick up their orders in the nearest warehouse.
Why is Warehousing Important?
Warehousing helps companies satisfy the demands of their customers for fast and efficient order fulfillment, which has become more aggressive in the digital era. It also ensures maximum productivity and efficiency, reducing the risk of supply chain disruptions and inventory mishaps.
Improved Inventory Management
Poor inventory management can lead to severe consequences in order fulfillment, risking delays in processing, shipping and completing orders. This leads to unsatisfactory customer experiences, which affects a company’s bottom line.
Warehousing helps businesses stay on track with inventory management. Their goods are all stored in a centralized location, making it easier to monitor inventory levels and resupply as needed. It also provides insights on which products are selling and which aren’t, optimizing supply chain planning and giving the business more control over its products.
Optimal Product Safety
Depending on the business’s products and goods, proper storage solutions are important to maintain the product’s quality and prolong its shelf life.
Warehousing facilities offer temperature-controlled environments suited for any kind of product, helping prevent spoilage or changes in quality. Some facilities will be complete with refrigerators, freezers and other storage solutions businesses can utilize.
Warehouses are also insured, which increases the chances of compensation in case of damaged or lost inventory.
Efficient Order Fulfillment Process
Warehousing provides companies with a centralized location to store, manage and distribute their goods to their end customers. This reduces the complexities involved in inventory monitoring and management and cuts down staffing needs and operation costs.
Some warehousing providers, such as WWL, will also have multiple warehouses scattered across the nation. This is beneficial for companies with a wide consumer base. By storing their products in strategically-located warehouses around the country, they can allocate orders to facilities closer to their customers, resulting in faster delivery and reduced shipping costs.
This also makes it easier to process returns and get products back to the warehouse for reselling.
Warehouses provide businesses with clarity on their workflows and processes. Because they are able to monitor their operations, from their inventory to delivery, they can easily spot inconsistencies or bottlenecks and resolve them swiftly.
Faster Shipping
Most warehouses are equipped with the materials and equipment needed to quickly process orders, from packing to shipping. These include loading docks, pallet racks or other conventional packing materials.
With access to this equipment, businesses can maximize their flexibility while reducing logistical costs. It also ensures that they pack their goods according to legal requirements and industry standards.
As a result, they can eliminate downtime and achieve faster turnarounds, satisfying the consumer demand for expedited shipping. This plays into increased customer satisfaction, increasing the likelihood of winning repeat customers.
Better Customer Service
Customers are favoring online shopping over traditional brick-and-mortar stores because of the convenience. But at the same time, they want their hands on their orders just as fast as if they bought them from a physical store. Businesses are under a lot of pressure to provide cheaper and faster shipping to satisfy customer demand and increase satisfaction.
Warehousing helps a business stay more competitive in the industry by elevating the customer experience. Through the facility’s services, businesses can provide faster and cheaper shipping, while minimizing damage or errors during order fulfillment.
Maintain Price Stabilization
The prices for consumer goods change all the time, depending on demand and other economic conditions. This can be either a pro or a con for businesses. If they don’t have a reliable storage solution, they will be under pressure to dispose of their inventory as soon as possible, even if market prices aren’t ideal.
On the other hand, if they store their inventory in a warehouse, they can save the products and sell them at a later date when they can earn a better profit.
Delegate Tasks
Warehousing gives businesses access to shipping and logistics experts who can improve their supply chain and streamline their operations. They can delegate order fulfillment tasks to warehouse staff and focus on the core aspects of growing their business.
Benefits of Warehousing for Your Business
Warehousing services are not only beneficial but crucial for businesses engaged in selling physical products to customers. They streamline the order fulfillment process while controlling costs and providing enough flexibility to scale the inventory or business as needed.
By providing a space to store, process, and distribute shipments coupled with features that optimize supply chain management and order fulfillment, businesses that work with warehousing providers enjoy the following benefits:
- Reduce costs for inventory storage, space, and equipment
- Reduce inventory carry costs and interest for products and insurance
- Improve accuracy and availability of inventory
- Temperature and environmentally controlled environment for storing goods
- Reduce shipping and transportation costs
- Effectively manage increased sales and order fulfillment tasks
When Do You Need Warehousing?
There are many reasons businesses may invest in a warehousing solution, depending on the types of products that they sell. These include the need to:
- Store inventory long-term
- Extend product shelf-life in temperature-controlled environments
- Delegate picking and packing processes
- Comply with legal requirements or industry standard practices
- Save time and increase productivity
- Improve customer experiences
Things to Consider When Picking a Warehousing Solution
Now that we’ve established the importance of warehousing for e-commerce businesses, it’s time to dive into how to pick the right warehousing solution. Because they will be in charge of a huge bulk of a business’s order fulfillment process, engaging the best provider for their unique needs is just as important as selling the right products to customers.
Here are some things to look for in a warehousing solution.
Tracking
To maximize the benefits of a warehousing solution, the provider must have a tracking system in place that benefits both the business and the customer. For example, inventory management tracking systems are crucial to reveal information about products, sizes, colors and quantities on hand.
In the same way, there must also be a system that provides customers with this information plus the cost of the product, shipping fees, shipping schedules and product origin, among others.
Flexible API
Warehousing providers will likely have their own inventory warehouse software. Now a business must decide if that API supports its needs. At the very least, it should be flexible enough to integrate with other systems and third-party software. Some additional questions to ask to determine if a WMS API is suitable for a business include:
- What is the API like?
- What features does it offer?
- Are there limitations to using the API?
- Are there extra fees or rates?
Integration with Apps and Services
Warehousing software provides businesses with their inventory data at a glance. But to truly make use of this, they need to pull that data into their own apps and systems. That’s why it’s important for the WMS software to be easily integrable and have a range of data interfaces to support connection with other apps and services.
Storage Capacity
A warehouse provider should be able to scale with a business and be flexible enough to accommodate a large number of SKUs and product sizes. So it’s important to determine how large the facility is, how much space they can allocate and whether or not they can handle the range and volume of products a business intends to store.
Even if the business is small and can do with a limited warehouse at the moment, looking for a flexible and adaptable provider early on will future-proof their warehousing operations, saving them time and resources as they scale.
Compatibility with Your Shipping Provider
Order tracking has become a non-negotiable in today’s e-commerce market. So it’s important to be able to integrate a WMS with a company’s chosen shipping provider. Doing so gives them access to the status of their order fulfillment processes and spot issues before they wreak havoc on the customer experience.
Maximize the Benefits of Warehousing with WWL
Streamline your order fulfillment process by working with a reliable warehousing provider. WWL has a suite of warehousing and distribution services that can meet your inventory storage and delivery needs. We ensure the timely processing and delivery of your products at minimal cost, no matter the type or size of your inventory.
WWL has seven warehouses in the U.S. and Europe, allowing you to get closer to your consumer base and deliver their orders faster and for a lower price. Each facility boasts state-of-the-art features and a user-friendly warehouse management system technology that can easily be integrated into your company’s software applications.
By working with WWL, you can optimize your supply chain, streamline your order fulfillment and distribution processes, enhance your customers’ experiences and maximize your profit.