Warehousing may seem like a simple concept at first glance. But as the home to your most valuable asset (your inventory) and a pivotal player in your supply chain, warehousing is actually a key function of your brand.
What Is Warehousing?
"Warehousing" is where your inventory is stored, as well as the systems and protocols that warehouse staff employ to ensure proper storage, processing, and monitoring of inventory levels.
Some warehouses also offer services that enhance product handling, including order fulfillment, labeling, kitting, and packaging. They take security measures to protect against theft and damage and ensure the integrity of the stored goods until they reach their final destination.
Benefits of Warehousing
Outsourced professional warehousing offers many advantages for businesses, such as cutting costs, boosting security, and sharpening accuracy. Here are the specific reasons to utilize professional warehousing services if you sell inventory.
1. Improved Order Accuracy
Imagine a customer’s frustration when receiving the wrong item or a damaged product. With advanced warehouse management systems (WMS), you minimize your chances of errors through features like:
Real-time tracking that ensures inventory levels and movements are constantly updated, reducing mistakes in order fulfillment.
Automated stock management that reduces human error in picking processes and data entry, improving accuracy in inventory records and order delivery.
From automated systems to streamlined picking and packing processes, every step is optimized for accuracy, ensuring your customers get exactly what they ordered every time.
2. Enhanced Inventory Management
Real-time inventory updates via tracking technologies keep you informed about accurate stock levels. Coupled with strategic storage placement, the warehouse maximizes space usage, minimizes waste, and ensures the right levels of inventory to meet customer demands.
3. Cost Efficiency
Outsourced warehousing helps reduce cost through optimized storage solutions and bulk operations. By bringing various activities like inventory management and order fulfillment together at one location, warehousing simplifies management, reduces complexity, and cuts down on delays and extra costs.
Additionally, strategically placed warehouses close to key suppliers or main customer areas minimize transport costs and speeds delivery. This helps move goods faster and lowers transportation expenses, making the whole supply chain more cost-effective.
4. Increased Security
Strategic warehousing ensures the protection of your goods through robust security measures and environmental controls. Surveillance systems and restricted access prevent theft, while climate controls safeguard sensitive items from damage.
Additionally, risk management protocols, like fire safety systems, provide further security against potential hazards, keeping your inventory safe and well-maintained.
5. Flexibility in Supply Chain
Market demands fluctuate, but your warehouse can meet the challenges head-on with scalable operations and adaptable facilities. Whether you need to expand storage space quickly, increase the speed of order processing during peak times, or adjust inventory levels to match current demand, your strategic warehousing solution must be designed to handle these changes efficiently.
6. Strategic Location Advantages
Proximity to key markets is critical for speedy deliveries. By choosing strategically located warehouses near major shipping routes and urban centers, you can reduce delivery times and costs while making the most efficient use of your distribution network.
Understanding Warehouse Management Systems
Now that you know what warehousing is and the benefits of warehousing, let’s dive into the world of warehouse management systems (WMS) and why you need them.
What Is a WMS?
A WMS is software that connects your warehouse to your sales channels, optimizing inventory management and distribution. It allows you to maximize your profits by streamlining processes, improving inventory accuracy, and enhancing order fulfillment efficiency.
Additionally, a WMS supports real-time data analytics, facilitating better decision-making regarding stock levels, warehouse space utilization, and overall operational strategies.
It automates warehousing and fulfillment processes through:
Direct shopping cart integrations
Marketplace integrations
Electronic Data Interchange (EDI) connectors
Why Use a WMS?
Merchants need a digital warehousing solution like a WMS to keep up with the demands of the digital sales channels. Consumer shopping patterns have dramatically shifted toward online shopping, with most shoppers using multiple channels, such as e-commerce websites, mobile apps, and social media platforms, before finalizing a purchase.
A WMS integrates with all sales channels, providing a unified and automated solution for multichannel fulfillment. This integration ensures that inventory is accurately tracked and orders are efficiently fulfilled across all channels, meeting the demands of today’s digital shoppers.
When searching for the right Warehouse Management System for your business, prioritize systems that automate processes like:
Order management
Warehouse locations
Delivery tracking
Inventory management
These automations create a low-touch fulfillment workflow that allows your team to focus on your core competencies rather than managing fulfillment and inventory statuses. The most robust WMS will also manage multiple transit modes from Less Than Truckload (LTL) to small parcels.
Digital Warehousing for eCommerce
eCommerce sellers especially need flexibility in a digital warehousing solution. 90% of customers need order tracking, 80% want delivery updates, and 39% want daily status updates from their online shopping experience and order fulfillment.
A digital warehouse will automatically send order status updates to consumers and include tracking information through a reliable carrier. A carrier is the shipping or transportation company, such as FedEx or UPS, that is responsible for delivering goods from the warehouse to the end customer.
This will reduce the number of customer support interactions your team has to process and give customers a sense of security with your brand.
Criteria for Choosing a Warehouse Solution
When searching for the right warehouse for your business, it’s important to vet potential partners according to the right criteria. Prioritizing the following criteria will ensure you find a long-term partner to support your business goals.
Flexibility
Find a partner with a vast network to support various product needs and geographic markets. Don’t get roped into long-term contracts or AOV requirements. Instead, look for a partner that will support seasonal demand and will be able to pivot with you quickly to meet new opportunities in new geographies.
Scalability
Find a partner that can scale up with you in terms of volume, geographic footprint, and channel requirements to set your business up for long-term success.
Technology
The warehousing industry may not be known for its technological advances, but industry leaders use a WMS that simplifies your end-to-end supply chain management.
KPIs
Be sure to ask potential partners about Key Performance Indicators (KPIs) around on-time fulfillment, dock-to-stock time, damage rates, and inventory cycle counts.
