Almost every large-scale eCommerce business needs a set of proper strategies for its warehouse management. And, very few businesses can deny the requirement of more than one warehouse somewhere along the supply chain.
It’s easy to understand that traditionally having a warehouse per region ensures faster stock delivery. So having a warehouse near the supply chain is beneficial for business scaling and growth.
Managing all warehouses carefully and smoothly can be a pain. If handled inefficiently; time delays and damages will surely skyrocket.
So in this post, you’re going to read:
- Purpose of keeping multiple warehouses.
- Multiple warehouse management challenges.
- How to efficiently manage multiple warehouses.
- How to manage inventory and stock efficiently across multiple warehouses.
Let’s dig the above four points in detail below.
1- Purposes of having multiple warehouses
First of all, let’s find out the reasons for and goals of having multiple warehouses. The demand for an extra warehouse is not limited just to multinational or multichannel businesses. Some businesses need multiple warehouses to cover several areas within a country.
Following are the reasons for which most businesses choose multi-warehouse management.
a. To decrease the transportation & labor cost
Retailers usually keep warehouses near the supply chain so that unnecessary transportation of the stock from the manufacturing zone to the final destination can be decreased as much as possible.
Speed and cost are the two major factors of warehouse management. One must have to strike a balance between the two while mapping warehouse locations. It determines optimal accessibility regarding both the target consumer market and transportation infrastructure and facilities.
Consequently, the labor cost will be decreased as the transportation cost is saved to its max extent.
b. To minimize risk
Encountering sudden disasters can cost you millions. For example, in some sudden unfortunate event, your warehouse burns down – you need to have a backup plan. In such situations, it’s quite difficult to send products out to customers. Therefore, there must be at least a backup warehouse to keep the process going.
c. To improve service standard
As time is a vital factor in any eCommerce business. So the shorter the delivery time, the better customer feedback you get. Simple.
d. To optimize products reach
For a business with a wide range of products, you can define a logical mix of stocks to be kept at different warehouses. This storage strategy can help to fulfill various inventory needs at particular warehouses. This is how you can optimize products reach by consolidating them to the nearest customer locations as well.
2. Multiple warehouse management challenges
a. Prioritizing matters of warehouse management
It is difficult to prioritize the issues that you encounter while processing warehouse management. Sometimes, you overlook the primary issues and start focusing on the nearest one. This happens when there is a chaos of busy tasks at a particular time.
So, this situation can be tough to handle; you smartly have to manage time to pay attention to the rest of the warehouses.
b. Staff communication hurdles
One singular office is not enough to incorporate every staff member responsible for multiple warehouse management. So, the remote collaboration of hundreds of employees doesn’t justify the meeting agenda; hence increases the hurdles in maintaining good staff communication.
3. How to efficiently manage multiple warehouses
Warehouse management is critical. Careful stock planning is required to manage multiple warehouses efficiently. It needs to be made sure that retailers don’t stockouts or overselling complaints. Preventing the aforementioned two issues saves businesses from additional costs.
a. Optimize warehouse locations
As we discussed above, don’t overlook the importance of mapping your warehouses. Planning to smartly locate your warehouses will leave huge impacts on other business aspects. These aspects can be logistics operations and some trade-offs.
b. Enhance warehouse design
Warehouse design is a vital factor that can business efficiency. The layout determines how quickly and accurately items can be indexed and selected to be shipped out to customers.
As it is obvious that the picking and packing process consumes a lot of time. So think about the case when the warehouse is badly organized; pickers would have to spend too much time in finding products.
How you can enhance warehouse design is:
- Make sure that items that get sold more often should be near the packing and shipping area.
- Day-to-day warehouse management activities should be carried out in a fast-paced and dynamic mode.
- The organization of your warehouses has to match the location-specific and trending demands of your products.
- Cut pickup routes in half by creating cross aisles, or shortening your main aisles.
- Ensure that all products are labeled clearly and uniquely so that they can easily be indexed and regained. Use Stock Konnect to generate smart and clear SKUs for your products.
c. Keep track of trending products
It’s a vital practice to track trending products and forecast their demand. It enables you to stay on top of stock levels. Moreover, frequent reorder point adjustment allows your warehouses to hold enough products to satisfy market demands.
You can calculate the reorder point via the following formula:
However, updating reorder points regularly allows quick selling during a particular period and helps you identify the number of goods you should order on a weekly or monthly basis.
You can easily adjust Reorder Points for inventory in Stock Konnect’s inventory management system.
Likewise, Stock Konnect’s custom reports allow you to forecast product demand quickly. You can analyze past sales data and current sales data to extract the trend in selling.
d. Use powerful multiple warehouse management software
Opting for highly competent warehouse management software can save you from the issues that arise at an exponential rate when you have multiple warehouses to manage. So it’s not easy to do it alone unless you have reliable multi-warehouse management software.
An ultimate system will help you reduce hassles and errors, and ensure that your multiple warehouses have sufficient stock to meet demands.
Use warehouse management software like Stock Konnect that allows you to integrate shipping tools as well and let you work under one roof.
Thus, managing multiple warehouses clearly has its trials but choosing the right warehouse management software can take you ahead. You can streamline your warehouse management operations and get maximum results with minimized costs.
