Businesses need warehouses to store products until it’s ordered and ready to be shipped out. Warehouses are more than just a storage area and are quickly becoming exceptionally sophisticated.
Handling an efficient warehouse management system requires coordinating staff, vendors, inventory logistics and technology.
There are businesses that handle all of these processes in-house, but lately, more businesses are recognizing the benefits of outsourcing the services. 3PL’s are designed to add value to business and move products through their warehouses quickly.
What are 3PL warehouses?
3PL warehouses store products, process orders and handle shipping. Their scope usually also includes customer service and returns management. Warehouses are responsible for keeping products carefully and shipping them out safely in a timely manner.
There are three different types of warehouse models:
- The DIY model is where a business rents or builds a warehouse and handles the operations in-house.
- A dedicated model is when a hired 3PL dedicates its warehouse’s and operations to only your business.
- The shared model works by sharing the 3PL warehousing and operations systems with other 3PL clients.
Key management strategies for 3PL warehouse
Efficient warehouse operation is a crucial factor that can make or break your business. Customer satisfaction primarily comes from the prompt and careful delivery of your items. The best product and great marketing could still be undermined by poor warehousing management. Here are some strategies to help manage the efficiency of your warehouse.
1. Audit your current warehousing plan
The best way to understand where your warehouse needs improvement is to first take a look at what is currently going on. Outline current operations by getting a scaled warehouse map, inspect the process flow, interview your employees and take note of all the equipment you have.
Speaking to your employees will give you an idea of how many of your existing strategies are being translated to on-the-ground operations. Auditing your operations will also help review the discrepancies in the data you have and the actual situation in the warehouse.
2. Analyze the strengths and weaknesses of your operations
Once you have a clear picture of your operations, you can detect room for improvement. There might be processes that are redundant, setups that are causing delays or equipment that are not functioning well. Look for practical steps that can solve those problem areas.
Be intentional in noticing the strengths of your operation such as efficient employees, technology or warehouse layouts that work. Providing the right tools to maintain your strengths will keep your business ahead of its competitors and create a strong brand image.
3. Re-engineer warehouse operations based on your needs
Over time, the needs of your warehouse operations will change based on customer demands or market changes. Check to see if your operations match the needs of your current business model. Organize items based on the current demand and forecast inventory needs based on seasonality or promotions.
4. Consolidate operations and optimize processes
Consolidate and centralize your operations to lower the cost of operations and increase efficiency. Rather than having many small operations running, centralization will give you better information and data collection.
Eliminate redundancy by automating processes that you can. Simplifying the picking and packing process will quicken your turnover time. Make use of technology or have systems in place for you to be updated and aware about inventory that is delivered.
5. Manage your warehouse space and design
From your earlier audit, analyze how warehouse spaces are used. Improve the storage layouts and create selection routes. Keep high demand products up front where they can be accessed easily. There should be enough room between shelves to move around so traffic is not built up and items can be picked quickly.
6. Utilize warehouse management system
An integrated warehouse management system will help you link the manufacturing, warehousing and order fulfillment processes seamlessly. Each department will be able to access and share the same information and have better coordination of their roles.
Good warehouse management systems will also be able to automatically inform the necessary departments of scheduling, pick lists and other tasks that require quick communication. Warehouse management systems are also able to collect data in real-time and identify barcodes or SKUs of products. This system is a vital tool for inventory tracking.
7. Get strategic partnerships
The best warehouse operations run smoothly when they have compatible allies. Getting the right vendor, shipping carrier, and logistics partner could increase your efficiency in handling your warehouse.
It is not the only solution, but getting partnerships could be a low-cost solution for your business.
Consider outsourcing your warehousing operations to businesses that are specialized in handling these processes efficiently. Many 3PL companies also partner with logistics companies, so consider hiring them for the value-added service they may be able to offer you.
There are different types of warehouses that you can choose for your business, and each one comes with its specific advantages and disadvantages.
Running a smooth warehouse requires attention to the details and having backup plans for disruptions. Some of these strategies may help you overcome challenges faced by your warehouse operations.
The article is a part of our comprehensive series on “3PL logistics”
- How is contract warehousing different from 3PL warehousing?
- Third-party warehousing and distribution: What is it?
- 3PL vs 4PL companies: Key differences
- Effective warehousing and inventory management: Process and tips
- Integrated warehousing solutions: 10 reasons why it works
- How can manufacturers use 3PL inventory management to sell in the US?
- 10 essentials you need to check when outsourcing warehouse services in the US?
- Fulfillment centres vs warehouses: The key differences