6 ways to adapt, pack it high, and sell it cheap
1) Right size it and pack it in: Efficient space can mean many things, for example: avoiding empty space in between different sized items and SKU (Stock Keeping Units) or using shorter picking routes. Allowing the flow and utilisation of the layout is essential, this includes rack and shelf configuration, 3D slotting, receiving, inventory management, replenishment, packing, and shipping that are all co-ordinated.
2) Pack it High: Headroom is key for material handling systems and specialised equipment. Vertical space is invariably cheaper than lateral space and this is also an easy way to allow grouping of the same types of item in one location thus also saving time – look at the space above your products. If there is more than twice the stock height at its densest, you are probably wasting significant space.
3) Send it packing: Cross-docking single line orders or large backorders decrease the amount of inventory requiring storage locations. When your warehouse is largely in transit, warehouses can be smaller. However, order volumes handled in this way often also require more parking space and accessibility of truck doors. There is a strong link between increasing your warehouse and expanding your fleet needs or timely subcontract, therefore these factors must also be considered along with having shelf space occupied with the right products at the right location. A lorry is just another form of work in progress but is stock nonetheless.
4) Cyberspace and the biggest sales pitch in the galaxy: For years e-commerce has been on the rise. The decline of the high street and big retail brands falling victims to this structural change have both been signs of this. Now with the Covid-19 crisis, consumer buying behaviour and expectations for online shopping have shifted even more. E-commerce has become a major opportunity to buy or to sell; it cuts out the retail costs, replacing it with cyber retail space which is unlimited, and is rent and rates-free. E-commerce does not require expensive floor staff which do not automate and who also need feeding, training and to have health considerations. One of the biggest organised storage systems in the world that gives you instant access to stock at no charge is Google – think about that, Amazon obviously did !
5) Get it with your Gold Top: The effect of e-commerce is not limited to where someone buys, but also to how the products are delivered and stored. Previously, shops also used to function as an interim storage place and as delivery points of the products to the customers from central distribution, whereas now we have individual delivery to homes. One van can deliver several carloads with no parking charges and can hand deliver up to an average of 175 parcels a day, according to Amazon. Shops on the other hand always tried to be able to have enough products in stock, with a local community in mind, restricted only by checkout queues (no such restriction operates on line). In contrast e-commerce websites are free to target the entire country and are hugely successful thanks to a massive delivery network to potential customers. With centralised storage and the “last mile covered” 175 times by one driver, delivery has returned to the era when the milkman delivered the milk to the door and soon it will be with electric vehicles too. It is ironic that the Co-Op milkmen actually discussed grocery deliveries door to door on electric vehicles in the mid 1990’s to save round losses to big high street grocery !!
6) As the clock ticks: Companies need to adapt. In order to adapt, they are looking for ways to expand their e-commerce capabilities, and with this comes a need for moving and handling goods and inventory change, materials handling is a key part of this and every minute spent is a pound saved permanently.
Below we discuss how material handling will adjust to the needs of the new e-commerce dominated world.
How to pick winners by TECHNOLOGY.
In shops, the expectation usually is to buy the product and to take it home immediately. In the e-commerce world, customers do not expect to have the product at the click of a mouse, click and collect excepted, but a day or so after. In the old retail world, shops needed to store products to allow for sufficient availability. However, in e-commerce warehouses, more space is needed to store a higher volume of inventory, but with this comes the risk that space could be wasted due to non-sellers and returns. Although the most problematic issue of all is the need to individually pick and pack which still has a high human input and this really slows the job down, especially with those trying to make their service special and more personalised.
A constant re-evaluation of the capacity and utilisation of the storage is required. This task can be carried out by a suitable software that determines the volume of products to be stored, cleared, or re-filled. It cannot pick winners and losers, yet, but then there is A I. Developing. The optimal e-commerce fulfilment strategy is crucial. For instance, having a system in place that allows the company to deal efficiently with a high volume of return orders, promotional events etc helps to better inventory management. This software needs to be flexible enough for continued change in a fast-moving e-commerce world. Only recently e-commerce providers started to offer to deliver parcels to pick-up points, which can lead to changed labelling; a desire to bundle deliveries and re-organise the material handling in the warehouse.
These changes require the capability to integrate systems and initiate an end-to-end method for e-commerce management that encompasses inventory deployment, carrier choice and warehouse automation. Systems which allow management to abstract this information provide a view of trends. The trends can be translated into futures with a certain amount of prediction. However there is no easy way of picking winners. We still depend on our visionaries for this but even they don’t get it right all the time but they are more likely to get it right if they have the benefit of seeing what is working. This is where artificial intelligence is breaking new ground in understanding how we make choices and now being able to out predict even the best professionals with a high degree of accuracy. Many of these choices are still hidden in the minds of military strategists but they will evolve into civilian life and be put to invaluable use to improve our experience whilst conserving resources. The fragments of this are out there now for deployment.
OUTSOURCING TO A SPECIALISED THIRD-PARTY LOGISTICS PROVIDER (3PL)
Managing a typical brick-and-mortar retail shop is not always easy. The bar for e-commerce business seems to be much lower, but with this comes a challenge on the logistical side. We have all heard of need-to-know, but what about the need to “do”. Many e-commerce outlets use third-party logistics providers or 3PL. This is not an invention of the e-commerce world, although some of them have specialised in e-commerce.
The e-commerce company deals with running the website and sourcing the products, while the 3PL provides the service from warehousing, all the way through to delivery. I can tell you first-hand, you do not need your own warehouse or factory to do this. In 1995 I saw this as an express train at full speed on the track and I was thankful that even as the tiniest cog I could in fact drive the entire machine almost single-handedly and I have never looked back. I now work in material handling. In the past, retail units and department stores did have their own little storage place with material handling equipment, although this tends to be replaced by bigger units often run by 3PLs with some impressive kit.
The expertise of 3PL providers should allow for the most efficient dealing, using the most up-to-date flexible software and automation in addition to a well organised delivery handling service, pick that person to be on your team and you will not regret it!
The way to go could be 3PMHS
MHE and MHS (material handling equipment and systems)
E-commerce constitutes a shift on the consumer side as well as on the material handling side. When considering e-commerce, ask yourself is warehousing really faster, bigger, and more flexible? For companies that run warehousing and storage, is the investment more flexible? Have automated technologies and an even more efficient space management become essential to staying competitive? What are the real opportunities in manufacturing, warehousing and transport, including 3PL and 3PMHE?All of these questions link back to the same idea, and they relate to the reason for which we pay the best footballers and top performers outstanding sums of money. Ultimately, people are happy to show their appreciation when a job is done well. Can material handling deliver this for you?
Well if not us, then who?
With the right equipment and materials handling, storage and distribution team behind your business, your customer base is destined to grow because more people will want your game and pay money to have it. It is a common thread found running through successful organisations and companies.