What is Warehousing?\u00a0<\/b><\/p>\n
A warehouse is an industrial building that stores or houses goods for a particular use. Manufacturers, distributors, import\/exporters, and anyone working with large scale volume of products along the supply chain uses a warehouse. While a storage warehouse will keep products for long periods of time, a distribution center might use a warehouse to sort products for shipping out to customers, keeping them for days or weeks only.\u00a0<\/span><\/p>\n Often a 3PL will use a warehouse as an integral part of their <\/span>ecommerce fulfillment<\/span><\/a>. Through a complex web of systems, the 3PL will organize products in an efficient way throughout the warehouse to be able to quickly pick and pack products when they are ordered online. The 3PL also facilitates receiving products to the warehouse coming from the manufacturer, and also working with shipping carriers to pick the products up to move to end-customers or retailers. Any good warehouse also has a robust system of operations, from an IT warehouse management system, to human operators who help pack products.\u00a0<\/span><\/p>\n Is a Warehouse the Same as a Fulfillment Center?\u00a0<\/b><\/p>\n Not exactly. Both house products, but the function of a <\/span>warehouse versus a fulfillment center<\/span><\/a> (also called a distribution center) is very different.\u00a0<\/span><\/p>\n When something is described as a warehouse, that often implies a storage warehouse. This is where products are kept for longer periods of time, months and years. This is really the only function of a warehouse, storage.\u00a0<\/span><\/p>\n A fulfillment center, on the other hand, is a more active warehouse that may allocate portions for longer term storage, but also have sections for picking, packing, kitting and assembly, labeling, sorting, and specialized product areas that may have refrigeration, or other controlled environments for products that require a special environment.\u00a0<\/span><\/p>\n The main function of a fulfillment center is to provide dedicated space to ecommerce companies for receiving and processing goods, then sorting and shipping them to end-customers who have purchased the products online. A fulfillment center can be owned and used by one single company, or operated by a <\/span>3PL or 4PL<\/span><\/a> to process products from many different companies.\u00a0<\/span><\/p>\n How Does Warehousing Fit into Ecommerce Fulfillment\u00a0<\/b><\/p>\n Inventory Management\u00a0\u00a0<\/span><\/i><\/p>\n All of the items within a warehouse need to be organized and in a way to calculate the exact number of SKUs at any given time.\u00a0<\/span><\/p>\n Balancing the flow of products and component parts from the manufacturer to the end-customer is a very difficult operational aspect of managing product business. At the heart of it is <\/span>inventory management<\/span><\/a>, or keeping the right amount of SKUs in a distribution center to be able to fulfill orders within a day, but not having too many that the distribution center becomes a storage warehouse with an overflow of products. This requires correct <\/span>forecasting<\/span><\/a> for order volume, clear communication with the manufacturer and freight forwarder to receive products regularly, and a great inventory management tool to see real-time data on how many items are in the stock. This is all in an effort to avoid <\/span>stockouts<\/span><\/a> and customers getting delayed shipments due to backordering.\u00a0<\/span><\/p>\n A great warehouse will have systems to accurately see the inventory count at any given time. While manual order counting is still done in some warehouses, modern technology is improving each year to be able to scan and count components in shorter and shorter amounts of time.\u00a0<\/span><\/p>\n Order Picking\u00a0<\/span><\/i><\/p>\n When an end-customer places an order online, that order is flagged to the distribution center so that it gets picked from the warehouse shelves. Picking is one of the most labor-intensive aspects of the supply chain. Within a huge warehouse of multiple SKUs for many different companies, it\u2019s a big endeavor to get to the right item quickly. Modern fulfillment center warehouses have very robust systems to ensure they pick accurately and efficiently. There are many <\/span>types of picking methods<\/span><\/a>: single order picking, batch picking, zone picking, and many more.\u00a0<\/span><\/p>\n Kitting & Assembly<\/span><\/i><\/p>\n Once an order is picked, it will move to a station within the distribution center to get packed into a shipping container. Then the order is accompanied by additional materials or items before getting packaged, labeled, and shipped.\u00a0<\/span><\/p>\n Some basic 3PLs only offer picking and packing. This means single items and orders get picked and put directly into a parcel, labeled and shipped. A 3PL with value added services and customizable fulfillment solutions will take extra steps to ensure their clients can give end-customers the exact experience they aspire to.\u00a0<\/span><\/p>\n Assembly is the act of collecting multiple components and assembling them into one item. For consumer electronics products, this sometimes means assembling a few component parts together before packing them, or even updating software to the latest version. Kitting, on the other hand, refers to adding multiple items to the same order. For CPG brands, this may mean ensuring multiple flavors of a product, or accessories to a product (camera lens, strap, and tripod) all go into the same order.\u00a0<\/span><\/p>\n To accurately perform kitting and assembly, the distribution center warehouse requires modern IT infrastructure to ensure the right items and components get into the correct packages.\u00a0<\/span><\/p>\n Shipping & Receiving<\/span><\/i>\u00a0<\/span><\/p>\n Once an order has all of the correct materials, components, and parts assembled, it gets boxed up and labeled for shipping.\u00a0<\/span><\/p>\n All fulfillment center warehouses have carrier pickups multiple times per day. The type of carrier service will depend on the amount of products being picked up and where they are going next. The warehouse needs to have docks and stations set up for various volumes of goods. If multiple pallets of goods are going to a retailer, for example, the dock needs to accommodate a large freight carrier truck. For direct to consumer (DTC) pickups, smaller box trucks and carrier vans need to be accommodated to fulfill a smaller amount of product pickup.\u00a0<\/span><\/p>\n The same goes for receiving at the distribution center warehouse. There needs to be adequate space for unloading pallets of products in order to get them on warehouse shelves.\u00a0<\/span><\/p>\n All in all the role of the warehouse in shipping and receiving is to optimize a smooth transition from all activity at each of the loading docks. A warehouse should employ an updated system for booking times at each dock, otherwise there will inevitably be a log-jam of trucks and carriers vying for time, having to wait, and getting frustrated.\u00a0<\/span><\/p>\n