What requirements should an eCommerce warehouse meet? A question formulated this way resembles searching for the parameters that a sports car should have.
A sports car can mean both a Formula 1 car and an off-road car adapted to the needs of the Dakar Rally. In a similar way, eCommerce Logistics does not always mean the same thing. It all depends on the product category and the scale of operations.
This is why, when a friend asked me about the requirements I pay attention to when auditing a warehouse or choosing a Logistics operator for online sales, I also answered with a question.
– What is the company profile?
– I can’t say.
– What’s the scale?
– Big.
– You’re not helping…
– I was hoping you’d help me…
So I decided to help anyway. As a result, this article was created. In it, I included a list of issues that I would pay attention to when choosing an eCommerce warehouse or checking whether the current one has been organized according to good practices.
Because it was an open question, the following list of requirements should be treated as such. If I knew more about the category of the stock, I would check a number of things more carefully. However, I hope that the listed questions will help both my friend and you.
If you are reading this post, then most probably you are looking for a way to increase the efficiency of your business. So do not hesitate to contact me to ask about any point or to arrange a more extensive consultation.
Security
First of all, when choosing a warehouse, pay attention to whether the facility meets the requirements of occupational health and safety. This is especially important in buildings that support the eCommerce channel.
There are more people working there than in warehouses that support traditional sales channels. That is why, first of all, you should check and make the following requirements when it comes to the object:
- equipping the building with a fire protection system
- CCTV installation, access control, external security
- zone control of temperature and air humidity of the building
- sanitary prevention (temperature measurements, disinfectants)
Of course, an eCommerce warehouse should also meet a number of other basic health and safety requirements. However, it is worth paying attention to the ones mentioned above in the first place.
You can read more about the exemplary approach to the security of Logistics operations in one of the previous blog entries. Together with Andrzej Lada-Kubala, I have written an article Warehouse equipment. Racking vertigo., where you’ll find a section on safety from scratch.
Technology used
Another important issue when choosing an eCommerce warehouse is technology. By this extensive term I mean both the physical conditions of the object under consideration as well as the equipment installed in the object or one that could possibly be installed in it.
Contrary to appearances, it is not always possible to install everything we need in a conveniently located facility. Depending on the length of the contract and its financial conditions, the owner, for example, may simply not agree to drilling in the floor.
In addition, I included points relating to the software used on the list of technological issues. The last two points in italics are relevant if you select a warehouse together with the support of a Logistics operator.
- the possibility of using a mezzanine (increasing the space over time)
- current racking system (load capacity, modularity, possibility of arrangement)
- checking the correctness of the process (re-control, checking the weight of the package)
- product flow (conveyors, autonomous vehicles)
- the WMS system used or the option to choose your own system
- integration offered with courier companies
Depending on our broader supply chain strategy and the level of service offered to the customer, the above considerations need to be broadened or narrowed accordingly. I have written more on this topic in the article – How to find warehouse workers? HR innovations.
Meanwhile, these few points should be a good start to analyze whether the considered facility or operator will meet the expectations.
Work organization
In many cases, an eCommerce warehouse functions faster and longer than standard warehouses. Sometimes 7 days a week, 24 hours a day. In most organizations, it also supports more products (unique assortment codes) than are available in online stores.
You could go on listing the differences for hours. All this requires a specific organization of work. This is why, when choosing a logistics operator, it is worth paying attention to the following issues in its warehouse:
- storage of assortment (mono SKU, multi SKU, zoned, chaotic)
- product identification level (EAN code, piece code, RFID tag)
- picking and sorting multiple orders at once
- degree of work control (e.g. packaging recommendation)
- working hours (24 hours a day, seven days a week)
- using visual management (5S, PMVs, etc.)
The first four issues of work organization in the warehouse result directly from the WMS system used. Without the support of IT tools, it is simply impossible to control it in a stable way.
The last two are more about work culture. Contrary to appearances, it is as important as the physical conditions of the building and the technology used in it. Everything that any service provider is able to offer to us begins (and ends) with what his team can do.
I wrote more about the management of large Logistics teams right after starting the blog, in the article Supply Chain Manager survival guide, whose co-author is Adam Szwedek.
Amenities for employees
Therefore, last but not least, when choosing an eCommerce warehouse, it is also worth paying attention to several issues related to the working conditions of the facility’s staff. However, I will mention only three that can be easily verified during a reference visit:
- free or largely subsidized meals
- size of social areas (canteen, locker rooms, rest areas)
- available number of parking spaces and the scope of employee transport
To this, of course, you can add medical care and most of the issues I wrote about earlier in the article 7 ways to develop a Supply Chain team.
I originally wrote that text with Supply Chain professionals in mind. From the perspective of time, however, I know that the methods contained in it, after appropriate adjustment of the scale of resources involved, can also be successfully applied in the operational environment.
The eCommerce warehouse is something more
When answering the question of what kind of requirements should be met by an eCommerce warehouse which is to handle a large-scale business, I focused solely on the facility, its equipment, the technology used, and the organization of the work of the warehouse team.
Without knowing either the product category or the key sales markets, I was not able to relate to a number of other factors that are worth considering before making a decision. The most important of them also include:
- distance from the client (or clusters of clients)
- distance from reloading points of courier companies
- labor costs and the level of unemployment in a given town
- condition and plans to develop road infrastructure in the area
The last points are worth verifying with someone who knows the local reality. I know the case of a warehouse that was located near the German border, based on, among other things, statistics of high unemployment in the municipality. In practice, the official statistics were based on the illegal work of most inhabitants.
I think it is obvious what was the result of making the assumptions of the low cost of finding and maintaining a warehouse worker for this facility… The story deserves a separate entry.
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