By Tennille Bell, General Manager: Sales at Programmed Process Outsourcing (PPO)
Change is never easy, but it is the only real way to achieve efficiency, particularly in warehousing. What happens when ecommerce businesses outgrow their warehouse management system? People and processes can no longer cope with the influx of orders, which leads to inefficiencies in space usage and product cataloguing which causes delays in deliveries and unhappy customers. This is an ecommerce nightmare. So, what is the solution to this problem? Regularly assessing warehouse management systems and processes to ensure they can keep up with business demands, as well as handing over such an enormous operational burden over to a specialist Business Process Outsourcing (BPO) partner.
Organised chaos: it works
What does an organised ecommerce warehouse look like? It’s not rows and rows of meticulously managed shelves with similar items grouped together by price or in alphabetical order. This would actually be a highly inefficient means of utilising storage space. Rather, by using an automated inventory management system that runs on barcodes and barcode scanners, one of the world’s largest retailers operates its warehouses with a system called “chaotic storage.”
This is a dynamic form of warehousing in which products are stored wherever there is space. Not only does this mean that space is used as efficiently as possible, but it also leads to faster processing times. Quicker processing means orders are dispatched faster, which translates to satisfied customers.
Manual processes: the enemy of efficiency
As counter intuitive as chaotic storage might sound, there are many South African ecommerce companies that will not be able to unlock their benefits if they continue to use manual processes (such as Excel spreadsheets) to record inventory movement. Even worse than manual processes, is no warehouse management system at all, and the perils of an ecommerce company not moving to an automated system are numerous. There will be problems with order accuracy, increased storage, and processing costs, along with numerous costly customer service failures.
Automation is critical
Achieving warehousing efficiency demands a quality inventory management system powered by automated software and executed by the right specialist BPO partner. Such a provider will step in, conduct an in-depth needs analysis, identify gaps in performance and provide solutions that assist ecommerce sellers in streamlining their operations. By implementing an efficient warehousing management system and streamlining processes for their clients, BPO providers help ecommerce sellers by revamping and automating their existing (or non-existent) warehouse management systems. In outsourcing the warehousing management function to the specialists, ecommerce companies see a return in five main areas: inventory management, storage space optimisation and labour maximisation, which results in satisfied customers, reduced returns, and costs.
End-to-end efficiency optimisation
Relying on exhaustive data analysis gathered from time and motion studies during the needs assessment phase, the chosen BPO provider will facilitate cost and performance efficiency throughout the entire warehousing process – right from supplier ordering, through to packing and shipping. Best of all? These exercises in streamlining warehouse operations and processes will ultimately pay for themselves. Furthermore, efficiency is treated as a constantly moving target and is assessed by the BPO in an on-going manner. Processes are constantly tweaked, improved, and optimised, to ensure that the company’s warehousing function is always cutting-edge to maximise output and increase revenue while minimising input and costs.
Flexibility leads to productivity
With the right warehousing BPO partner in place, ecommerce companies will also unlock flexibility in terms of human resources. BPO providers handle the labour component of warehouse management and order fulfilment and can scale on resources to meet sale-specific or seasonal fluctuating demands. Relieving their clients of the employment burden, risk mitigation becomes a huge benefit for ecommerce companies who no longer must carry the worry of labour relations, occupational health, and safety compliance alone. Such benefits are often overlooked but can have a massive impact on productivity.
Through outsourcing, the implementation of an efficient warehousing management system and streamlining processes for their ecommerce business, companies can rest assured that their BPO provider will make it as easy as possible for them to keep their promises to customers. BPO provider performance is regulated strictly by contractual Key Performance Indicators (KPIs), it’s a given that clients will benefit from on-going efficient service delivery that generates a higher revenue value as a direct result of process outsourcing and optimising functionality within their supply chain.
Outsourcing protects the bottom line
In neglecting to relook and refresh their warehouse management systems regularly, ecommerce businesses are doing themselves a serious injustice that will cut into their bottom line in a way that can impact their ability to survive in an increasingly competitive space. Few ecommerce companies are as efficient as they would like to believe but by having the right BPO partner for warehouse management, ecommerce businesses will be able to focus more on the things that matter such as acquiring and serving customers, knowing that complex operational matters are handled.