Effective Tips to Improve Warehouse Efficiency for Ecommerce Businesses

31/07/2019 By Hannah Gabaldon Reading Time: 4 minutes

When it comes to improving warehouse efficiency, business owners are constantly on the lookout for ways to make their production and distribution both quicker, cheaper, and more efficient. Whether it is incorporating AI tools, automated technology, or improving the awareness of seasonality and effective return policies- there are so many strategies to improve your current warehouse structure.

In this post we are going to cover topics such as warehouse efficiency, what percent of warehouses are automated, examples of warehouse automation, and much more.

Warehouse Management, eCommerce, and Why It Matters

Ecommerce warehousing is, in a nutshell, the storage of goods before they are sold online. Warehousing eCommerce is essential for reasons such as safety, security, tracking, and handling quantity. A significant amount of what makes warehousing so critical for eCommerce, is the management behind it.

Warehouse management is essentially in charge of managing all of the daily operations associated within the warehouse. This can range from running inventory, managing shipments, re-ordering, and improving security.

Basically, anything that involves improving warehouse efficiency, is the job of warehouse management. Without proper management, there would be no efficiency, and efficiency is KEY to running a successful eCommerce business.

Insight of Warehouse Management

Management, specifically in the warehouse, is a task many take for granted until they see just how important it is for your business. The total number of warehouses in the US has grown around 6.8% within the past 5 years, according to the Bureau of Labor, and is continuing to rise as more eCommerce and business develop.

Many eCommerce business owners, specifically entrepreneurs, think that they can handle running their business alone. You will find many using spaces such as garages, basements, and even living rooms as their “warehouse” while trying to save money with rent and access costs. While this may seem like a logical solution in the moment, there are many benefits as to why warehousing your eCommerce business is the way to go.

Benefits of Warehousing Your eCommerce Products

When choosing to house your eCommerce business’ inventory in a warehouse, there are huge benefits. Not only does warehousing benefit your customer, but it also brings huge advantages to the business, saving money, time, and resources. Here are a few benefits you will encounter when warehousing your eCommerce products.

Ships out quicker
Avoids over-purchasing
Much more consistent
Better organization
Avoids running out of storage
Everything in one place
….and you can finally move your inventory out of your living room!

How To Improve Warehouse Efficiency

Understand Seasonality

Seasonality is a huge factor to keep in mind when working in the warehouse. Knowing what kind of brand is being sold will help you to know when to produce a higher quantity of products. For example, a children’s toy company would need to produce more during the holiday season.

Manage Returns Quickly

It is inevitable to run a business without someone having a problem with their order. Making returns happen both quickly and efficiently is crucial for keeping your business in good standing. Remember, the customer is always right!

Incorporate AI Tools

Artificial intelligence tools are quickly becoming the norm for replacing tedious and repetitive human tasks. Whether you realise it or not, AI tools are used in the average person’s life daily through new social media and technological advancements, especially in the warehouse to cut down the time spent doing repetitive tasks.

Ecommerce Warehouse Automation and AI

The use of automation and AI in eCommerce warehouses is becoming essential as customer’s patience is declining and many brands are offering shipping as fast as one day. By the end of 2021, warehouse automated technology is expected to reach a value of around $22.4 rel=”noopener noreferrer” billion, according to Tractica studies.

Effective AI Tools That Help rel=”noopener noreferrer” With Warehouse

AI powered eCommerce merchandising is essential to warehouse success in this day and age. When ensuring efficiency and proper management within the warehouse, there are many effective AI tools that help significantly and play a huge factor in determining the best way to perform tasks. There are tools such as canonisation, supply chain planning, machine learning, and a few more we will take a closer look at.

Print and Apply Labelling

Effortlessly having all your labels applied for you sounds like a dream, but wait, it’s reality! With AI technology you can cut your time and staff in half and ensure that your labels are applied quickly and consistently.

Robotic Sorting

Eliminating the need for hours sorting through materials, this image recognition hardware ultimately takes the place of the tedious human labor of sorting through papers and boxes.

Automated Warehouse Picking

Implementing this will reduce the walking time and rel=”noopener noreferrer” routes that employees take daily when working in a warehouse. According to ConveyCo, manually picking orders accounts for over 50% of picking, hence why automating this will bring tremendous benefits.

AI-Powered Visual Inspection

To ensure quality control, this AI powered tool inspects every product to make sure that nothing is damaged or broken, as well as detect for mistakes that may have gone on in the process. This tool again, eliminating yet another tedious human labor task.

Product Demand Predictions

This AI tool is huge for warehouses to predict and determine how rel=”noopener noreferrer” much to make of each product and what to expect for the demand in the upcoming months. According to Cision, retail inventory is only accurate around 63% of the time.

Autonomous Vehicles and Shipping

Self-driving cars are quickly becoming the future of automobiles, so it is just a matter of time until shipping is done quicker than ever with autonomous vehicles and self-driving shipping methods from the warehouse to the customer.

Sounds great right? Well, what many are concerned about is the price associated with automating your warehouse.

Is Automating Your Warehouse Worth It?

Keeping up with warehouse technology trendsis important to keeping up with your customers and the world around you. Many businesses stress rel=”noopener noreferrer” over costs, as well as wonder, how much does it cost to automate a warehouse?

According to Inbound Logistics, labor costs end up being around 65% of most warehouse budgets. Another study BLS from shows that in a typical 100 employee warehouse, more than $3.7 million is spent annually on labor costs. By automating your warehouse, that immediately eliminates a large chunk of those labor related costs, as well as creates a more consistent process.

So, is automating your warehouse worth it? While it is a big change that will bring a cost to your wallet, in the long run, it is a great investment.

To Review

When it comes to improving your warehouse efficiency for your eCommerce business, there are so many great tips and ways to bring your warehouse to the next level. When building your improvement strategy, be sure to keep in mind these 3 key tips to improve your efficiency.