Warehousing: Warehousing Functions, Importance, and Benefits

Bradley Johnson
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    Warehousing is the process of storing inventory that is packaged and sold or distributed to customers. It also happens to be fundamental to the success of any company selling physical goods. It allows you to stock inventory, repackage, and use eCommerce shipping solutions at scale. 

    Understanding everything that goes into successful warehousing for wholesale and food-based businesses may feel daunting, but it doesn’t have to be. 

    This blog post breaks down warehousing's core functions, importance, benefits, and even what is warehouse. Let's get started.

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    Warehouse Operations

    Warehouse operations are the daily activities that prepare inventory for shipping, inventory tracking, and order fulfillment. Here are four crucial operational components of warehousing:

    • Pick and Pack: A process of selecting one or more products that was ordered by a customer, checking it, and packaging it for shipping.
    • Inventory Management: The inventory definition is tracking, measuring, updating, and retrieving products in a storage facility, including minimum and maximum quantities, stock-outs, and service level agreements.
    • Order Fulfillment: The process of getting an order ready for shipment to a customer, and making sure it is shipped out as soon as possible.
    • Warehouse Management System (WMS): A software program designed to oversee warehouse operations, inventory storage, demand forecasting, and daily efficiency.

    Warehouse and Inventory Management

    Warehouse management is the process of managing inventory in a warehouse, including tracking quantities, monitoring expiration dates, and organizing products based on customer demand. It also includes managing the process of receiving and storing inventory, and finalizing orders for shipments.

    Many retailers and eCommerce businesses choose to outsource their warehouse logistics, which is a smart choice since warehousing is less about transportation and distribution and more about inventory storage. Warehouse management software is an essential component of warehouse operations and warehouse services. It allows you to track stock and create alerts for low inventory levels.

    Inventory management can also be done using radio frequency identification (RFID) tags and scanners, which lets you track items in real-time and quickly scan items once they get to the warehouse space.

    7 Advantages of Warehousing

    There are numerous advantages of warehousing for eCommerce, an online marketplace, or a small business. Understanding how each advantage fits into your business model can clarify the warehouse logistics that suit you best. 

    1. Control Over Products

    Keeping all of your product stock in a warehouse space allows you to maintain control over it. You can leverage inventory control, get rid of outdated products, and pack orders in a centralized location. 

    2. Improved Workflow

    Using warehouse logistics to manage orders improves the workflow of your entire facility. By monitoring your operations over a specific period of time, you can quickly uncover inconsistencies. This enables you to dedicate time and attention to resolving any such issues. 

    3. Faster Shipping and Delivery

    Packing your products up in the same warehouse space they were received in allows shipping and distribution to effortlessly handle their part. Customers expect fast turnarounds, and by eliminating lag time, you’re likely to win repeat business. 

    4. Close to Target Market

    Many companies place their warehouses in locations close to their target markets. This supports fast shipping and easy returns--two factors that customers have high standards for. The faster each order is shipped and delivered to customers, the more time you have to focus on growing your business. 

    5. Long-Term Storage

    Another benefit of warehousing is storing long-shelf-life goods in a safe, profitable manner. Instead of placing MOQ orders frequently, you can place EOQ or JIT orders more frequently and ship products out as they’re sold. This reduces time spent on receiving at your facility and allows both you and your staff to focus on fulfillment, customer service, and other warehouse services.

    6. Risk Minimization

    It’s easy to watch a handful of products when your venture just started. As you grow, preventing losses becomes more challenging. The benefits of warehousing include appropriate equipment for minimizing risk, especially for cold items and perishable foods. 

    7. Task Delegation

    Maintaining your stock levels by yourself, all while handling sales and marketing, is time-consuming and costly. By warehousing your products, you delegate the former responsibilities to staff members.

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    5 Primary Functions of Warehousing

    The functions of warehousing include proper warehouse setup, receiving goods efficiently, storing temperature-sensitive products correctly, picking and packing in a streamlined way, and monitoring warehouse logistics. You also want to control your work in process inventory and make sure it's successfully transitioned to merchandise inventory. Developing a dependable warehouse process for your products is crucial for business growth. 

    Here's a closer look at the primary functions of warehousing: 

    • Setting your warehouse space up properly and with relevant equipment
    • Receiving raw materials inventory and storing it appropriately
    • Ensuring temperature-controlled products are maintained 
    • Picking, packing, and shipping products efficiently
    • Monitoring warehouse operations to address errors and inconsistencies 

    Let’s examine each of these activities in greater detail. 

    1. Setting Up Your Warehouse and Equipment

    Whether your warehouse space is large or small, using it optimally is what matters. You’ll need at least one area each for receiving, unpacking, shelving, long-term storage (if applicable), shipping and handling, and office work. 

    When arranging your warehouse floor(s), aim to separate areas by activity. This keeps your daily operations organized and minimizes the chance supplies or tools end up in an irrelevant space. 

    As for the equipment your warehouse will use, this depends on your business’ needs. That being said, all warehouses benefit from basic supplies and tools. Below is a list of equipment to include: 

    • Shelving units 
    • Labeled bins (for large items or order parts)
    • Labeled totes or containers (for order packing)
    • Picking cart(s)
    • Packing table(s)
    • Packing materials (tape, scissors, eCommerce packaging, bubble wrap)
    • Computer and printer
    • Scale (especially for weight-sensitive items)
    1. Receiving and Storing Stock

    Having a robust warehouse organization plan is important to receiving and storing all your new stock. If you don’t have enough room, it’s easy for supply to pile up and prevent timely outbound work. Keep this area of your warehouse space clear and organized at all times. 

    1. Maintaining Temperature-Controlled Products 

    This is extremely important if you sell perishable goods or food that needs to be maintained at a specific temperature. As your sales grow, ensure your warehousing has the storage gear and equipment that meets or exceeds regulations for your industry.

    1. Picking, Packing, and Shipping Products Flawlessly

    Getting your orders picked, packed, and shipped out is one of the most important stages of eCommerce. Set up your packing desk, cross docking area, and distribution staging area to be as organized and clearly labeled as possible. During periods of high order volume, this will help you complete each order in as little time as possible.

    You should also train your staff on how to measure a box for shipping and how to use a shipping cost calculator. Having this knowledge saves minutes on each package every day, which translates to hours saved each year. If any employees are asking, "How much does it cost to ship a package?" You can have a more experienced employee educate them on your processes, thus freeing up your time.

    If you don't have a shipping label printer or packing slip template yet, make sure to acquire them. Also buy some high quality warehouse labels so you know where any item is at a glance.

    1. Addressing Errors and Inconsistencies In a Timely Fashion 

    It may sound obvious, but no warehouse logistics are perfect. You may end up with a lot of unused stock, run out of packing materials early on, or experience order volatility with a particular product. 

    Use a paper or electronic inventory tracking system to timestamp received stock, when it’s prepared for unpacking, when it’s shelved, etc. Then, calculate the average time spent between each stage across one month, which will give you your receiving accuracy rate. Similar calculations can be used to measure efficiency throughout the rest of your facility, like for time spent on picking and packing.

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    Warehousing Alternatives

    Besides building and equipping their own warehouse, companies have other warehousing options. Let’s examine some of the alternatives to classic warehousing.

    1. 3PL services. Outsourcing distribution and warehousing to third-party logistics (3PL) providers can help businesses focus on marketing and sales. Although it’s more common for smaller companies, medium and large ones can still partner with 3PL businesses.
    2. On-demand warehousing. Businesses that experience high seasonal demand might look for on-demand warehousing solutions. For example, a company that focuses on selling gifts is likely to need such service during the Holiday season.
    3. Share warehousing. Partnering with other businesses and sharing a warehouse can reduce costs and help establish a long-lasting relationship.
    4. Efficient inventory management. Businesses can reduce their warehousing costs and needs if they optimize their inventory. Check out our guide on inventory management.

    6 Principles of Warehousing and Distribution

    Warehouse distribution is the process of transferring goods from warehousing to distribution centers based on a business's needs and its customers' buying patterns. These operations may be near the company's warehousing or spread across multiple states or countries, depending on what kinds of markets a company serves. 

    There are several important principles to keep in mind when designing a warehouse logistics and distribution strategy. They include inventory turnover, order fulfillment, order consolidation, and picking and packing.

    Inventory turnover is the amount of times a certain volume of product is sold. A high inventory turnover rate means that you sell through your inventory efficiently and a low inventory turnover rate means that you have high inventory levels. A retailer may have 100 units of a particular item on the shelves and sell 10 units of that item. That means that their inventory turnover rate is low. Learn more about how to calculate inventory turnover.

    There are multiple principles of warehousing that allow warehouses to run smoothly and deliver great results for clients. Identifying the target market, capacity, floor plan, and objectives of your warehouse space are necessary. 

    Use the following principles from our warehouse management guide

    1. Clear Objectives

    Clarifying the objectives you have in building or contracting with a warehouse space is crucial for success. Deciding on the warehouse’s purpose, location, type of goods held, lifespan, physical design, and applicable partnerships is a great place to start. 

    What you need your warehouse space to accomplish can change over time, and this is often the sign of a successful business. Communicate your company's most important needs to third parties or employees upfront so you can ensure operational relevance right away. If you sell rare, sensitive, or otherwise high demand products, this should be included in your decisions, too. 

    2. Accuracy

    Storing thousands of products while ensuring the right ones are shipped at the right time is challenging. Picking and packing accuracy as it relates to order processing is paramount to customer happiness. 

    Providing quality training for employees empowers them to pick accurately from the start. Depending on the needs of your company, it may also be useful to develop quick reference sheets and post clear signage. Warehouse inventory management software or an ERP from this list of ERP systems makes it even easier to track how much is stored and where.

    Achieving a low product touch frequency is also integral to accuracy. Low touch frequency means the goods entering your warehouse are handled as minimally as possible.

    There’s a strong correlation between low touch frequency and higher profits. Here are three ways to sustain low touch frequency: 

    • Ensure shelving, bins, and containers are quickly and easily readable. 
    • Allow enough room for item retrieval. This is important in large warehouse spaces. Never condense space solely for more inventory storage. 
    • Proactively refresh shelving and bins. If your staff needs to reach at awkward angles to get a product, your shelving needs to be adjusted.

    3. Operational Efficiency

    Operational efficiency is one of the most important principles of warehousing because daily success depends on it. Establishing one-way warehouse logistics is always smart. A one-way flow means all product that’s brought into the warehouse is only processed in one direction, including returns. This method reduces bottlenecks, allows staff to move around comfortably, and ensures each RMA number and returns don't get mixed with new stock. 

    If you haven't yet created a one-way flow for your warehouse space, skilled warehouse managers can help. Putting together a great warehouse manager job description is useful in attracting someone with relevant experience. It's also wise to include a competitive warehouse manager salary in your job posting.

    Also, schedule time at least two to three times per year to conduct an ABC analysis. This is a systematic review of all the products you stock, based on their profitability for your business. A products generate most of your profit and are customer favorites; B products are loss leaders that are occasionally purchased; C products are actively creating losses and should be phased out of your digital catalog as soon as possible. You can find out which products to eliminate through a SKU rationalization.

    4. Speed

    More than half of consumers ages 18-34 expect same-day delivery. More than 60% of consumers are willing to pay more for same-day delivery. These statistics show fast shipping and distribution is a modern-day necessity.

    Your company should offer it wherever possible. You can also improve your shipping speed with the help of a warehouse management system.

    5. End-to-End Customer Satisfaction

    Warehouse logistics involve a lot. Such activities include receiving, stocking, picking and packing, administrative work, and eCommerce shipping. Not to mention, cleaning and maintenance. As a result, communication between delivery drivers, warehouse staff, and 3PL companies should be clear and concise. This supports prompt deliveries and a positive working environment.

    6. Tracking and Reporting

    Setting up tracking and reporting for each stage of warehouse operations is necessary for improvement. Reports reveal missing products, shipping delays, and return issues that often go unnoticed day-to-day. By tracking and reviewing all phases of your warehouse activities, you can spot problem areas and implement relevant solutions. 

    In-House Order Fulfillment

    If you are planning on going the in-house fulfillment route, then you have to know how to handle order fulfillment. It doesn’t matter whether you’re selling online or in person (or both); each order requires attention and must be processed correctly.

    Order fulfillment consists of picking the right items at the right time and packing them for shipment. You and your staff are responsible for all this work if you’re going the in-house route. Here are the tools and methodologies you need to succeed with in-house order fulfillment:

    • Order picking tracker. Once an order is received, your staff can't just go to your warehouse space shelving and find the product. They need to update your inventory management system (IMS) or WMS. Most companies utilize handheld devices to scan products once they've been picked. These devices automatically send messages to your computers to update product counts, which is how a perpetual inventory system works.
    • Packing materials and process. The next step is using packaging materials appropriate for each order and getting items boxed up in a streamlined fashion. Aside from picking the right product, this is arguably the most important part of order processing, as it determines how quickly goods can be sent out. If you don't have a clear process for order packaging, consider developing a business process flow for all of your warehouse logistics.
    • A labeling tool. Labeling packages once they've been packed is the next step in the order fulfillment process. Most warehouse staff use a thermal label printer, which is rapid and cost-efficient.
    • A way to ship products. Getting products to customers is the final step. Depending on your target market, you may be shipping to retail stores, directly to consumers, or both. You can use your own transportation if you have it, but most businesses turn to third-party logistics companies. It's increasingly necessary to leverage outsourcing as your company scales, to keep costs low and reduce the number of processes you need to oversee.

    Warehousing In Logistics and Supply Chain Management

    Warehouse logistics are only one element of supply chain management, but they play a major part in the entire supply chain’s success. The warehouse is a middle phase in the food supply chain and other supply chains, and it’s crucial to get right. While a perfect warehouse doesn’t exist, being mindful of key factors simplifies your decision-making.

    Raw goods are first received at ports and later delivered to warehouses. From the warehouse, sold products either go to a manufacturer or a distributor. The distributor supplies finished goods inventory to a retailer or carrier, where customers pick up the product.

    It’s important to choose a warehouse services provider that complements these other touchpoints in your supply chain. Choosing a warehouse space with the greatest location advantages allows you to decrease resources used between each point.

    What Does Warehousing Allow Organizations to Achieve?

    Warehouse services allow organizations to:

    • Practice inventory storage and optimize space, equipment, and methodologies for minimal costs.
    • Store goods in a controlled environment and, when necessary, use environmentally controlled areas such as refrigerated and frozen storage.
    • Reduce inventory carrying cost, including interest on money tied up in products and insurance costs.
    • Reduce shipping costs, including transportation costs and damage to goods during shipment.
    • Improve inventory accuracy and availability by storing items in a single location rather than being stored in several places.
    • Consolidate your storage efforts to one inventory warehouse and therefore reduce monthly expenses.
    • Use repackaging as an inventory reduction practice.
    • Reduce storage costs by using an inventory warehouse.
    • Be prepared to handle increased sales through larger storage capacity.
    • Be prepared to handle increased sales through the use of multiple warehouses with stock transfers between them.

    Difference Between Warehouse and Warehousing

    Warehouse and warehousing share the same root word, but they aren’t necessarily the same. A warehouse can be any physical building that is designed to keep items secure. 

    Warehousing is the process of using and optimizing an inventory warehouse, which includes product maintenance, and handling, and other warehouse services. Warehouses are almost always used for such purposes, but warehousing may take place at other locations. Fabrication and manufacturing facilities, office spaces, and training buildings may be used for warehousing, although this isn’t common. 

    Importance of Warehousing In Business

    All of the types of eCommerce businesses selling physical goods must have an excellent, cost-controlled warehousing method to serve and retain customers. The goal with any company is to be profitable at scale. Efficient warehousing allows you to raise your prices without too much of your expenses slashing your profits. This is challenging in physical product businesses, as there’s always a cost tied to your sales, which is the cost of goods sold. If you sell any kind of physical item, you need a location to store increasing numbers of units. 

    This is where different facilities come in. Product businesses need enough room to store, package, and ship their products. Warehouse services make this possible, so you don’t need to work out of your office or home.

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    Explain the Importance of Warehousing

    Moving your operations to a warehouse may seem overwhelming at first. Thankfully, it’s easy to explain the importance of warehousing in three core concepts.

    Keeping Goods Safe

    First and foremost, warehouses are necessary for keeping goods safe from damage, loss, or theft. It allows you to separate your inventory warehouse from office space and institute a daily product workflow. 

    Streamlining Purchase Decisions

    Second, having the right kind of warehousing makes purchasing decisions much easier. Instead of merely guessing what your reorder point is (by not using the reorder point formula), you can find out by reviewing your purchase and shipping reports.

    This information shows what’s popular and what’s not in hard numbers. You can then prioritize incoming stock based on the trends seen in your reports.

    If you're having trouble finding the data you need, consider investing in an ERP implementation. The consolidation of business data like purchasing and financial reports is just one of several benefits of an ERP system.

    Develop Optimal Processes

    Third, over time, you can develop a better warehouse management process flow for your operations. If you’re not using a particular raw good as often as expected, talk with your supplier to arrange an alternative. If your current shipping provider isn’t delivering your products on time, you may want to consider changing providers.

    There are dozens of reasons for warehousing, but you may only need a few to make a difference for your company. Depending on the type of product(s) you sell, your reasons for warehousing can include the following: 

    • Storing inventory long-term
    • Outsourcing picking and packing
    • Adhering to specific legal requirements
    • Protecting high-value products
    • Keeping temperature-controlled goods safe
    • Decreasing time spent on low-impact decisions

    What Are the Activities of Warehousing?

    Warehousing activities include:

    • Receiving inventory: Inventory may be received as a single shipment or in smaller shipments. It might be received directly from the manufacturer or from a distributor. It might be received from another warehouse if the organization has multiple facilities. Warehouse personnel must verify that the correct product is received and inspect for damage at the time of receipt. Inspection might include the use of scanners or a visual inspection with a checklist, or both. Warehouses may use barcode scanning or product recognition software to verify the identity of the product. Once the inventory has been verified and is ready for storage, it may be manually or automatically moved onto the storage shelves. Warehouses may have wheels, rails, or other automated machinery to move inventory.
    • Storing inventory: The goods might first be sorted into different groups or pallets. It is then manually or mechanically moved to the storage shelves and placed. This may involve the use of forklifts, pallet jacks, or other equipment. 
    • Picking and packing: Picking involves the selection of items from the storage area for packing into the final unit. Packing may be manual or automated with packing robots, automated guided carts, or other equipment. Picking might involve a pick-to-order or pick-to-stock inventory system. If a pick-to-order process is used, an order is placed for each item. If a pick-to-stock system is used, inventory is selected from shelves only when it is sold.
    • Shipping: After items are packed, they are manually moved to a shipping area, loaded onto conveyor belts, or automated carts for shipping. Shipping can be done manually, with conveyor systems, or automated carts. Warehouses often have specific areas or equipment for each of these activities. They also have specific areas for receiving, storing, and shipping.

    Is Warehousing Logistics?

    Warehousing is not necessarily logistics. Logistics is the process of strategically planning and managing the flow of goods from a point of origin to the point of consumption. Warehousing is one part of logistics, and a very important part.

    Warehousing is the storage of physical goods in a controlled environment, including the use of containers and transportation equipment, to support business operations. Warehousing is often used in conjunction with the phrases logistics and manage inventory. Logistics is the coordination of the flow of materials and products between points (source and destination), the use of resources and the various modes of transport involved in the flow. It focuses on the integration of activities in the supply chain including production, distribution, and related information technology (IT).

    4 Risks Involved in Warehousing

    For as many advantages as warehouse logistics provide, there are some risks involved to be aware of. Here are the top 4:

    1. Theft and Impropriety

    As a company that sells physical products, there is always the possibility of theft. When conducting interviews for your team, be sure to include a robust background check for each candidate. It’s also good to watch for any unexplained gaps or termination of employment. 

    When forming partnerships with third parties, online reviews and word-of-mouth feedback are great tools for evaluating them. Remember, it’s better to take your time in forming a working relationship than it is to cut ties quickly. 

    2. Indoor and Outdoor Security

    By their very nature, warehouses are filled with tens of thousands, if not millions of dollars worth of products. All it takes is a few unsavory individuals hatching a plan, sneaking in, and helping themselves to the five-finger discount.

    If you don’t have access control systems and security cameras in place, your warehouse carries immense risk. Invest in a few WiFi cameras that allow you to access footage at the touch of a button, and you’ll be all set. 

    3. Natural Disasters: Fires, Floods, Earthquakes, and More

    While natural disasters can happen at any moment, there are plenty of steps you can take to mitigate damage risk. Choosing a warehouse location that isn’t excessively dry, hot, or close to large bodies of water is wise. It’s also important to check the natural disaster history in your preferred area, as this can highlight other risks to defend against, like earthquakes or hurricanes.

    4. Workplace Equipment

    Warehouse staff rely on specialized and potentially dangerous equipment to get work done. Employees should be well accustomed to the tools they use daily (for more info, see what is a warehouse associate).

    First, you should always provide thorough training to each employee for every piece of equipment they operate. Accidents often happen in a fraction of a second, especially with large and heavy equipment. Second, you should have damage control plans in place, so that even if an accident occurs, employees know how to handle it and help each other.

    6 Questions to Ask When Choosing a Warehousing Solution

    When it comes to eCommerce, picking good warehousing is just as important as getting the right product. Your warehouse is essentially the foundation of your eCommerce business. It will be responsible for storing, tracking, and shipping your products.

    This might seem like a lot to think about upfront, but trust us when we say that these details are essential. A bad solution can end up impacting your sales and conversion rates (among other things).

    So what should you look for in a warehouse solution? Anything that’s going to be helpful for your company moving forward. There are many factors to consider when investing in warehouse logistics, such as ease of implementation, scalability, and reporting capabilities. Here are six questions to ask yourself:

    1. What Is the Most Important Thing You Want to Track?

    When you’re designing your inventory warehouse, start with a single item on your shelves and work outwards. What do you want to track about that product? There are two questions to ask yourself: What do you want to know about this item? And more importantly, what does your customer want to know about this item? If you’re a retailer, for example, you want to know the size, the color, and the quantity on hand. But your customers want to know all that, plus the cost, the shipping times, and where the item is coming from. In short, one process serves two masters: your internal needs and your customer’s desires.

    2. Does the Warehouse Offer Flexible APIs?

    The service you're considering may have inventory warehouse software of its own. But if you’re starting out with a clean slate, then you’ll need to find a WMS that works for you. An important part of the process is to understand how it talks to the outside world. What is the WMS's API like? Are there any limits? Is there a rate for excessive use? If your chosen solution has a flexible API, that’s a good sign. It means you can easily integrate it with your other internal systems. It also means you can integrate it with other third-party software, like your website or CRM. This is especially important if you have multiple facilities or even multiple businesses inside your company.

    3. How Easy Is It to Integrate with Other Apps and Services?

    Getting your inventory data into your WMS is only the start. You want to be able to pull that data out again and use it for other purposes. That’s where data interfaces come in. What data interfaces does your WMS offer? Are any of them optional?

    If your WMS offers a standard data interface, like an API, then you’re in luck. If it offers a range of data interfaces, that’s even better.

    Data interfaces are the connectors between your WMS and other apps and services. They are the ways that data gets into and out of your WMS. A custom data interface for your WMS tells you that it’s flexible and adaptable. And that’s a good sign.

    4. What’s the Logistics of Moving Products In and Out of Storage?

    Warehouse facilities are great. They are highly organized locations for inventory management. But they have one drawback. They take up space.

    You see, if your WMS computer is separate from your inventory, then it uses up physical space in your warehouse. You’ll have to add up the square footage of all of your shelves, drawers, or racks. Then you’ll have to add up the extra space taken up by your WMS.

    So, what’s the logistics of moving products in and out of storage? If your WMS is separate from your inventory, then you’ll need to reorganize your inventory around when you want to add or remove a product from your WMS. This is a pain. It also creates an opportunity for human error.

    The best WMSs are integrated with your other software. This way, you use one process for both purposes. You’ll save on physical space. And you’ll reduce the risk of human error.

    5. Are There any Limitations on the Number of SKUs or Product Sizes That Can Be Stored?

    If your WMS can only handle a handful of SKUs, that’s a bad sign. You want your WMS to be as flexible as possible. It should work for every product in your inventory warehouse, no matter how much space you end up using. It should grow with you. If you want to be able to store a wide range of products, then you want to make sure your WMS can handle it. You also want to make sure you can scale up as your business grows. If you’re in the early planning stages of your company, you don’t want to get trapped inside a WMS that can only handle a few thousand SKUs. You’ll be stuck with it for the long haul.

    6. Does It Integrate with Your Chosen Shipping Provider?

    Finally, you want to make sure your WMS integrates with your chosen shipping provider. This is important if you want to track your products through the entire supply chain. It’s also helpful if you have a robust customer service team. They can see all of the products they’ve shipped and when they are expected to arrive. It’s a great way to help your customers with any shipping issues they might have. In summary, it’s important to choose the right WMS for your company. It’s the first step to streamlining all things inventory. It’s one of the most important decisions you’ll make as a business owner. Make sure to choose wisely.

    Want to better organize your warehouse, inventory, and individual products?
    Get our FREE SKU Generator Template.

    Frequently Asked Questions About Warehousing

    Warehousing is not a simple subject to master. Even if you've worked in warehouse logistics before, chances are the rate of technological innovation and the rate of consumer changes has forced you to adopt new practices.

    If you are still scratching your head about warehouse facilities and logistics, have no fear. We researched commonly asked questions about warehousing to bring you the best info. Check out our answers below.

    Is Warehousing a Function of eCommerce?

    Warehousing is an essential business function, but it is not always directly associated with eCommerce. In fact, a warehouse may be located away from the eCommerce fulfillment center, or vice versa. This means that warehouse logistics have little or nothing to do with eCommerce fulfillment, at least in some cases.

    In other cases, physical products are received at the warehouse, transferred to a nearby fulfillment center, and then repackaged into smaller units that are then shipped from the fulfillment location. In still other cases, a warehouse may receive orders from a manufacturing or distribution center and then repackage the items for shipment. The items may be packaged in such a way that they are not necessarily ready for the buyer to use. For example, a warehouse might receive a pallet of golf clubs from a manufacturer and repackage them into separate units. These units can be bagged or boxed and prepared for sale in a retail store.

    What Is Smart Warehousing?

    Smart warehousing is a warehouse operations concept that builds on the advantages of traditional warehousing. Although there are hundreds of warehousing concepts, the rapid pace of supply chain and warehousing innovations over the past few decades has led to the emergence of many new concepts. One of these concepts is "smart warehousing," which entails the use of information technology (IT), operational technology (OT), and Internet of Things (IoT) tech to achieve greater efficiency in warehouse services and supply chain management.

    What are the Types of Warehouse Solutions?

    Warehouse solutions are essential components of any eCommerce business, whether you’re using a private or public warehouse. From Fulfillment by Amazon to using a third-party logistics provider, there are a variety of facilities out there.

    Before you choose warehouse services, make sure it is fully integrated with your eCommerce platform and IMS. Here are popular options to research and consider:

    • Fulfillment by Amazon: Transportation, inventory storage, Pick and Pack, and order fulfillment.
    • 3PL: Transportation and order fulfillment.
    • Co-Warehousing: Transportation, inventory warehouse, inventory storage, and Pick and Pack.
    • WMS: Transportation, inventory, Pick and Pack, and order fulfillment.
    • Hybrid: Transportation, inventory warehouse, inventory storage, and Pick and Pack.
    • In-House: Transportation, inventory warehouse, inventory storage, and Pick and Pack.

    What are the Warehouse Trends and Predictions?

    As eCommerce continues to grow, so does the demand for warehouse space. This means there are more warehouse options for eCommerce companies, which is usually a good thing since it lowers costs.

    The more demand there is for particular goods or services, the more providers step in to meet the needs of the given market. This generates new trends in an industry, and warehousing is no exception. Here are our predictions on upcoming warehouse trends:

    • Warehousing Automation. One of the most significant trends in warehousing is automation. From auto-picking to using robotics in logistics, automation makes warehouses run more efficiently and increases throughput rates. According to a recent Business Wire article, more than 80% of warehouses have zero automation. We predict that half or more of all warehouse facilities in North America will have some automated processes by 2030.
    • New technologies. New technologies like machine learning and artificial intelligence are changing how warehouses operate. These technologies are allowing warehouses to optimize their operations in ways never before possible.
    • Employment and wage growth. Reuters wrote in 2021 that the warehousing industry employs over 53% more workers than it did in 2016. That constitutes some of the fastest growth out of any industry worldwide. We predict that the demand for industry workers will rise 10 to 20% or more in the next five years.
    • Robotics. The increased usage of autonomous warehouse robots is expected to rise even more.
    • AI and predictive analytics. AI tools have changed the way many businesses work. They help not only with automations but with other aspects like marketing and human resources as well.
    • Sustainable warehousing. Integrating eco-friendly practices into various business processes becomes increasingly important. As customers demand businesses to reduce their ecological footprint, warehouses should adapt as well. Some examples of green warehousing policies include energy-efficient technologies, waste reduction and recycling, and using green packaging options.

    These trends are sure to have an impact on warehouse logistics. As more companies outsource their warehousing, they’ll need to make sure they’re selecting the right partner to ensure the highest level of service.

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    Warehousing Is Wonderful

    It’s easier to take the next step in your venture now that you have a firm understanding of warehousing. Being able to identify the right warehouse services and relevant partnerships can take some time; don’t rush yourself. Remember that no two businesses are exactly alike, so make your decisions based on your branding, revenue, and yearly goals. 

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