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Warehouse & Fulfilment Centre

Warehouse & Fulfilment Centre

Difference between warehouses and fulfilment centres

In retail and eCommerce, the traditional concept of warehousing has transformed into what we call today urban fulfilment centres (FCs). Warehouses are still there but the traditional concept has also branched out a hybrid version of itself. These fulfilment centres are trimmed to perfection to achieve the distribution objectives of modern-day eCommerce. While the primary functions of pure warehouses are storage and distribution, fulfilment centres serve as mini-warehouses where eCommerce order fulfilment processes are initiated and goods are made ready for further distribution or last-mile delivery. The role of FCs is to optimize the storage and flow of inventory over long distances and execute the order fulfilment activities of penultimate nature like sorting, packaging, labelling, product mixing, dispatching, handling returns, etc.

Contemporary business models and strategies in retail and eCommerce have played a big role in the emergence of urban fulfilment centres. The word ‘urban’ is often attached to fulfilment centres because these centres are often located in or around urban cities to deliver to urban customers. Another reason for the emphasis is the magnitude and complexity of order fulfilment carried out every day of the week throughout the year to get the orders delivered to customers consistently.

But why choose fulfilment centre?

By using a network of fulfilment centres, eCommerce players or retailers could keep their inventory strategically closer to the markets that help them to shorten the delivery timelines. Shorter delivery timelines give a competitive advantage as customers prefer the earliest possible delivery of their orders as a given default.

Secondly, FCs help in inventory management and keeping costs optimized. These FCs also work as temporary warehouses equipped to handle eCommerce order fulfilment. Online retailers need not store everything everywhere.

Thirdly, FCs let eCommerce players utilize the expertise and resourcefulness of the local logistical partners associated with the nearest fulfilment centre.

Challenges in managing warehouses and fulfilment centres

Weaker SLAs

A service-level agreement (SLA) is a written and binding understanding, usually between a company and its suppliers/vendors, defining the services delivered by the suppliers/vendors/service providers to the company or its customers. These SLAs are a form of binding assurance that the services will be rendered as per the defined standards. In the online channel or eCommerce, retailers and online marketplace platforms are dependent on the services of many suppliers and vendors for outsourced operations. If these SLAs are not well-defined and the operational standards and objectives are not incorporated, it leaves loopholes in how the service providers comprehend the business interests of their clients and how they carry out their operations. Any misunderstanding, understating, or lack of comprehension could lead to inferiority in the services delivered. Such situations have far worse repercussions when the services are delivered to or accessed by the end customers.

Competitiveness and efficiency in delivery function

With product homogeneity, eCommerce companies and retailers in the online channel seek to do their best in services. And delivery has emerged as a fiercely fought competitive aspect for businesses. A delivery promise of a day early or even by a matter of a few hours significantly aids online retailers to secure more orders. In a large market base, this small difference in delivery timeline creates a huge difference in terms of orders acquired. And to be able to fulfil the delivery promises, these fulfilment centres need to get many things right from planning to execution. This list includes strategic locations for FCs, efficient inventory management, space optimization, fail-safe processes and operations, right technologies and business IT systems, highly dependable logistics, etc. All these aspects working together collectively determine the ability of a business to live up to its delivery commitments.

Managing the space

Real estate is an expensive affair and carries long-term financial implications for businesses. Efficient layout planning of warehouses and FCs is critical to ensure strategic and efficient utilization of the available space. This is applicable even if the services of third parties are hired. While renting or hiring warehouses and FCs, understanding layout planning helps businesses choose and specify the customization requirements. Irrespective of whether the warehouses/FCs are rented or owned, layout planning has a bearing on how swiftly, safely, and correctly flow of inventory takes place in these places towards successful order fulfilment. The layout plan of an FC affects its holding capacity, shelf management, zone allocation, safe and smooth movement of inventory and staff, etc.

Managing the flow of inventory

Excess inventory and idle space are two circumstances that put stress on warehouses and FCs. With excess inventory, the space management goes haywire. With unused spaces or empty shelves, the costs of renting or operating a warehouse/FC still have to be incurred. Inventory level optimization is the way to avoid these two extreme situations. This is possible when demand forecasts are accurate, purchase plans and procedures are well-defined, real-time monitoring of inventory levels are taking place, lead time estimations are precise, operations are defined through SOPs, etc. Thus, even after securing a large number of orders, order fulfilment may get hampered if the threshold limits of the warehouses/FCs are breached.

Last-mile delivery

The last-mile delivery can be that squeeze of lemon in the milk which could turn what has been a delightful journey for customers into a poor experience. Everything done so far to deliver a superior customer experience could meet a tragic failure if the last mile delivery fails to live up to the expected standards. Here, the focus should be on employing the right team of delivery associates going through a stringent selection process. If the service is outsourced, the same set of rules must be made applicable to the outsourced agencies when they hire their employees. The second set of requirements is well-defined operations and providing the necessary training to the ground staff.

Identifying the IT requirements

Managing warehouses and fulfilment centres now calls for professional expertise. To be able to define or specify the strategic IT software requirements of a fulfilment centre, one must first have insightful perspectives of the functioning of the contemporary fulfilment centres. With rapid developments in the field of business and technology, the task becomes even more challenging. Business software applications play a big role in managing FC and warehouse operations. The business-IT systems have to be kept in sync with the business and marketing strategies and the rest of the supply chain and distribution operations.

How YRC can help: a glimpse

With over eight years of experience delivering expert consulting services in retail and eCommerce, YRC envisions emerging as one of the best consulting firms in the world. In retail supply chain warehouse consulting and eCommerce fulfilment centre consulting, we offer a multitude of warehouse consulting and fulfilment centre consulting services that help clients hailing from over more than 20 verticals. We deploy an experienced team of warehouse consultants and fulfilment centre consultants to work on our projects.

SOP Development

SOP development is one of our core competencies in retail and eCommerce supply chain management. With SOP design and development, our goal is to make businesses process-oriented enterprises. Our SOP experts work to ensure that the clients’ business processes and operations remain on track with adequate checkpoints to control deviations if any. The operational roadmaps shall be defined for all the activities that are intended to be carried out in the warehouse or the fulfilment centre. These include demand forecasting, purchase and procurement, handling and packaging, logistics and delivery operations, selection of service providers, process audits, etc. Employees will have a clear sight of what they are supposed to be doing and what standards have to be maintained. There will be no scope for shirking of responsibilities and the scope of errors and mistakes shall be brought down to near-zero levels.

Layout Planning

The layout plan of a warehouse/FC is an important activity of eCommerce and retail supply chain management. In layout planning, we assist clients in designing an efficient layout plan for their warehouses and FCs. This is directed towards optimizing the use of the available space and achieving smooth and agile inventory and distribution operations throughout the year. Our experts also provide guidance in inventory flow planning to ensure that there is no constraint of space at any given point of time in the routine course of business. Aspects related to safety and movement of people and inventory are also addressed.

Last-mile delivery integration

The last-mile delivery is a critical component of the order fulfilment process. Anything gone wrong in the last-mile delivery could jeopardize all the efforts done to provide a superior customer experience. The scope of our consulting in retail and eCommerce supply chain management is not confined to the boundaries of the warehouses or fulfilment centres. We will also work to ensure that you have a reliable last-mile delivery function. YRC’s team of fulfilment centre consultants assist in formulating the last-mile delivery strategy, establishing the SOPs, selecting delivery partners, and logistics process integration.

Warehouse/FC-IT requirements

Businesses need to identify and incorporate the right software platform for managing the operations of their warehouses or fulfilment centres. The software application or the ERP is required to keep records of incoming and outgoing inventory, register and track movement of goods, and share the inventory information with other stakeholders and process owners in inventory, purchase, order fulfilment, and delivery functions. Having the right software application assures that the operations are within the scope of a unified digital ecosystem. Our team of fulfilment centre management consultants help identify the software requirements for managing the information system of warehouses and FCs. We also ensure that the software application stands integrated with the SOPs and the rest of the business processes.

Talent Management

All the business planning and strategies shall be of little or no use if the right people are not present in the organization and they are not managed properly. We help businesses keep their organizations strong and agile from the core. Our consulting services for warehouses/FCs cover assessing manpower requirements, classifying departments and size of teams, recruitment SOPs, PMS design, training programs, etc. For example, in training consulting, our objective is to ensure the availability of trained staff for your warehouses and fulfilment centres.

Process audits

Audit for the sake of audit is not sufficient. In process audits, more important than measuring the performance is the ‘how’ of the performance achieved. That approach leads to business process improvement which is critical for any warehouse/FC to improvise its efficiency and effectiveness in its contribution to the business goals and objectives. Our audit goals go beyond tracking the performances of warehouse/FC operations and encompass evaluating the merit of the processes under examination.

We are a boutique retail and eCommerce consulting firm with an experienced team of warehouse consultants and fulfilment centre consultants. To know more about our warehouse consulting and eCommerce fulfilment centre consulting services, drop us a message and we will get back to you.

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We work only for Visionaries.

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.