Warehouse Logistics: Importance, Challenges, and Tips to Improve
Originally Published: 3 May 2023
Last Updated: 19 June 2023
In this article
Definition of warehouse logistics
Warehouse logistics refers to the operational processes within a warehouse, encompassing fulfillment, inventory management, health and safety, resource management, inventory positioning, and more.
Warehouse logistics involves planning, managing, and co-ordinating each element of the warehouse to ensure that goods move through the warehouse efficiently and safely, with a focus on minimising costs and raising productivity.
The importance of warehouse logistics
In order for a business to be high-growth and profitable, a robust warehouse logistics strategy is essential.
If warehouse logistics aren’t properly controlled, managed, or reviewed, then inventory is going to get damaged or go missing, orders are going to arrive late, and operational costs are going to be higher than they need to be.
You also run the risk of creating an unsafe working environment, which is both immoral and potentially unlawful.
Benefits of warehouse logistics
Now we’ve established why warehouse logistics are important, let’s take a look at some of the benefits that a streamlined, organized, and thorough warehouse logistics plan can bring to your business.
At the top-level, the benefits of warehouse logistics are twofold; increasing revenue, and creating the best customer experience possible. With that in mind, let’s take a look at some specific benefits and how they can help you to achieve these goals:
Better use of space
Well-managed warehouse logistics ensures that inventory is stored in the most suitable location, which helps speed up the fulfillment process. Using space correctly also means you’ll be able to stay in one location for longer before upsizing.
Better inventory management
Good warehouse logistics should make use of a warehouse management system (WMS) that will digitize inventory data and allow you to track inventory in real time. Using a WMS can help you conduct advanced inventory analysis such as forecasting, ABC analysis, and more.
Streamlined fulfillment
A closely monitored warehouse will naturally result in faster, more accurate fulfillment. An optimized fulfillment process means you can pick, pack, and ship orders out faster, with fewer errors, thus improving the customer experience.
Cost savings
Regular warehouse logistics analysis will allow you to cut costs in key areas such as labour, shipping, storage, and other operational costs.
Enhanced health and safety
Most importantly, your people will be safer in the workplace when warehouse logistics is closely monitored. They’ll have the right training and PPE to handle goods and machinery safely, and navigate the environment properly.
Other benefits of a robust warehouse logistics strategy include a faster returns process, waste reduction, improved compliance, greater employee satisfaction, and better management of the wider supply chain.
The greatest challenges of warehouse logistics
If you’ve worked in a warehouse before, you’ll understand how complex the running of an efficient warehouse is, and how many moving parts there are in play. Some of the biggest challenges of running a warehouse include:
Staff management
Managing resources, particularly warehouse staff, can be a challenge. Ensuring everyone is trained and properly equipped to do the job is one thing, but you also need to account for sickness, holiday, and job satisfaction.
Additionally, it can be difficult to manage staff properly if your business is prone to unexpected fluctuations in demand. Balancing staff workloads and numbers in line with demand can be a challenge.
Space
Space can quickly become an issue if you’re a fast-growing company. A warehouse that seemed enormous at first quickly becomes a limiting factor when rapid growth ensues. Moving inventory to a new site can be a costly, time-consuming process, and it can be difficult to carry on fulfilling orders while moving your whole operation somewhere new.
Integrating technology
One of the greatest challenges of running a warehouse in the 21st century is integrating new technology into operations. The most competitive businesses use technology to better manage stock, track orders, and improve efficiencies, but integrating sophisticated technology is expensive, time consuming, and requires a lot of specialized knowledge.
Meeting customer expectations
In a world where next-day and even same-day delivery is becoming the norm, it’s becoming increasingly difficult for businesses to stay competitive. The speed and accuracy of a fulfillment process holds one of the biggest influences on customer satisfaction, and the effectiveness of the fulfillment process is heavily dependent on warehouse logistics.
Managing costs
There’s a large variety of costs associated with warehouse logistics, each of which needs to be closely monitored and controlled if a business wants to be high-growth. Everything from energy bills to wages, shipping costs to maintenance, packaging to PPE, and much more.
Finding ways to streamline costs while retaining value and customer satisfaction is a constant battle, especially during times of economic uncertainty.
Improving warehouse logistics
To truly take your warehouse logistics to the next level, it’s essential to put in place a sophisticated warehouse management system (WMS). A WMS can benefit each and every stakeholder in an operation, from senior leaders to warehouse operatives, marketers to financial planners, and of course, the customer.
Here’s some of the top-level features of a well-designed warehouse management system, and how they can improve your warehouse logistics:
Real-time business intelligence
By design, a WMS collects tonnes of data about your inventory, operational costs, and customer behaviours. Over time, this data can be used to better forecast demand, identify your most and least profitable SKUs, improve postage margins, and much more.
Enhanced inventory recording
A WMS allows you to upload all the necessary SKU information to ensure that the pick and pack process is as accurate as possible. The system will automatically notify warehouse operatives when an incorrect item is being picked, effectively eliminating mistakes due to human error.
Better inventory tracking
Thanks to digital barcodes, a WMS can be used to track inventory as it moves through the warehouse. This has several benefits, from ensuring items don’t get lost, to measuring staff productivity and performance. Inventory tracking helps warehouse managers to identify bottlenecks in efficiencies, and make recommendations for improvements.
Sell across multiple channels
With an omnichannel WMS solution, you can integrate multiple shopping channels into your warehouse logistics strategy. This could be major channels like Shopify and WooCommerce, social channels such as Instagram and TikTok, as well as other bespoke online channels.
Customer-facing order tracking
A comprehensive warehouse management system can use inventory tracking functionality to create a better customer experience. For example, when a customer orders a product, a dashboard can be sent to them via email which shows them exactly where their order is in the fulfillment process. It’s the little things that keep customers coming back.
Or, simply outsource warehouse logistics to James and James
If you’re a growing eCommerce brand who’d rather focus on growth than running a warehouse, then outsourcing warehouse logistics to a 3PL could be an ideal solution for you.
James and James are an industry-leading 3PL that have fulfillment centres across the world. We store, pick, pack, and ship orders to wherever your customers are in the world, and we even handle returns, too.
Our custom-built fulfillment platform, ControlPort, combines warehouse management and inventory management tools, letting us take care of the operations while providing you with full control over your inventory. It’s won multiple awards, and is built, maintained and regularly updated by our in-house tech team.
To learn more about our fulfillment services and solutions, please don’t hesitate to get in touch on +44 (0)1604 801 915 or pop your details into this online form.
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