Emerging Challenges for Warehouses and Fulfilment Centres

Stockouts = Lost Sales

What is the true cost of inventory stockout?

Poor warehouse replenishment planning creates a systemic bottleneck that leads to adverse effects on retail sales and profitability, especially in the case of high-velocity SKUs. As warehouse consultants, we witness a minimum loss of 4%* in annual sales due to stockouts.

High-velocity SKUs give a very short time to respond. When replenishment cycles fail to align with real-time demand patterns, it results in stockouts and immediate loss of revenue. It goes for both brick-and-mortar and eCommerce channels. The cost of going out of stock stretches beyond surface-level missed transactions. For instance, customers move to competing brands – hampering CAC, retention, and loyalty. This is one of the primary reasons why we focus on velocity mapping and lead time management in our warehouse consulting services.

Excess Inventory Blocks Working Capital

How does excess inventory affect working capital?

Low-velocity SKUs are a dual threat to financial and operational health. From our long stint in the warehouse consulting industry, we commonly witness excess inventory increasing carrying costs by 20%–30%* annually.

Financially, low-velocity SKUs are tied up in working capital. Until sale, they incur carrying and service costs. The higher the inventory age, the greater the risk of obsolescence and forced markdowns.

Every unit of slow-moving inventory occupies space within the facility. This space not only has a price, but also opportunity cost. If such goods are occupying prime or accessible spots, it is coming at the cost of not having high-velocity SKUs there. Warehouse congestion and increased traffic are common in such situations.

Inventory Inaccuracy Creates Chaos

How to speed up warehouse operations? How to avoid stockouts? Why is inventory carrying cost rising?

When a Warehouse Management System (WMS) shows non-existent stock as available on the shelf, it creates a phantom stock. This discrepancy has an adverse domino effect on operations. For instance, employees spend time looking for something that does not exist. Auto-replenishment systems fail to trigger, leading to stockouts. The adverse implications on customer experience need no elaboration.

On the other hand, showing existing stock as unavailable leads to self-inflicted loss of sales and revenue. This is a situation of hidden inventory. It also leads to excess purchases. The excess stock then brings in extra financial and operational burden.

As warehouse consultants with international operations, our internal reports indicate the global average retail inventory accuracy as ranging between 60%–80%*. This means that there are many businesses that continue to operate with inaccurate stock visibility.

Slow Order Fulfilment

What are the reasons for slow order fulfilment? How to speed up the order fulfilment process?

Slow order fulfilment is a glaring sign of a flawed warehouse ecosystem. It goes on to adversely impact customer experience. Today, 60%* of online buyers expect a delivery timeline of 2 days or less. In analysing the causes for slow order fulfilment, we must look at each of the activity elements involved in this process.

Picking: The biggest culprits behind slowdown in picking activity are the absence of SOPs, poor layout, suboptimal slotting, data infidelity, poor batch picking logic, delayed replenishment lead, ergonomics, and equipment issues.

Packing: Delays in packing activity are primarily caused by the absence of defined workflows, packing stations reaching capacity limits, manifest and software latency, consumables running out, order fragmentation, complexities of additional packing requirements, and ergonomic and layout factors.

Dispatching: Bottlenecks at dispatching can delay an order by hours or even a day. Common bottlenecks are poor SOPs, failure to align with pickup timings allotted by external carriers, door congestion, staging errors, failure to generate manifests, logistical miscommunications, and paperwork and compliance issues.

Replenishment Lead can be at subpar levels if there is no defined logic for timely action, bottlenecks in MHE availability and movement, overlapping of duties, suboptimal slotting, and ghost inventory.

Warehouse Damages and Pilferage Reduce Margins

How does inventory shrinkage affect margins in retail? What are the reasons for inventory shrinkage in eCommerce?

You need not be a warehouse consulting expert to reckon that the disappearance of inventory or a decrease in its valuation is a direct hit on revenue and margins. In warehousing and inventory management, it is called shrinkage. In shrinkage, you not only lose the costs/investments made on the items so far in the supply chain, but you are also deprived of potential revenue and profits. Globally, inventory shrinkage costs retailers billions every year.

Deficiencies in warehouse layout schematics, racking and shelf planning, slotting, and operational control are an RSVP to shrinkage that never goes unaccepted. These deficiencies manifest as physical damage, inaccessibility, obsolescence, misplacement, and data infidelity.

Peak Season Warehouse Breakdown

How to temporarily increase warehouse capacity?

Every warehouse and fulfilment centre has an operational capacity. During peak seasons or scaled volumes, more inventory is pushed into the same square footage. This causes physical friction and disrupts the routine, planned course of operations. As veteran warehouse consulting professionals, we often see businesses trying to overcome this problem with additional workforce and failing at it. In the absence of warehouse SOPs, the situation gets even worse. Something similar happens during promotions. Successful promotions alter the inventory velocity profile. These breakdowns reflect deficiencies in fundamental planning and readiness for scale.

Misaligned Technology Investments

What are some of the best WMS solutions in the market?

The gap between getting a feature-rich Warehouse Management System (WMS) and making the most out of it is a major bottleneck in efficient warehouse management and its impact on profitability. WMS should align with how teams are supposed to think, act and report.

In our warehouse consulting experience, we have seen umpteen times businesses buying WMS software based on features or branding without validating their ability to synchronise with the ground realities of implementation. For example, if the software requires a specific barcode scanning at a place, but that place is too cramped to allow that activity, the likelihood of bypassing this requirement becomes high. Another example would be UX and UI feasibility. If a WMS does not have an intuitive UI, new workers will take longer to get used to it.

Manual Warehouse Dependency

Why is my warehouse performance not consistent? Should I take the help of warehouse consulting companies?

People-dependency occurs when the key logic of warehouse operations and performance rests with a few employees rather than in SOPs or digital systems. Since the WMS cannot reflect everything, new employees have to spend days and weeks before acquiring high accuracy in aligning their performance with the WMS.

In a people-dependent system, the warehouse productivity is limited by the physical presence of a few individuals with tribal knowledge. In the absence of such employees, the entire show can slow down or come to a grinding halt as no one else knows the workarounds. Such dependency on a few employees also creates the problem of a scalability break. When a new outlet or warehouse comes into the picture, replication of the same operations framework becomes challenging.

How YRC’s Warehouse Consulting is Driving Real Impact

Warehouse Setup & Infrastructure – The Physical

How to set up a warehouse or fulfilment centre? How can warehouse consulting firms help me?

Warehouse Layout Design (Warehouse Consulting)

Warehouse layout design is much more than finding a spot for every box; it’s an endeavour at designing a floor plan that optimises handling, storing, movement and space for operational excellence and unhindered profitability. Here we cover:

• Zoning and navigation
• Motion analysis
• Flow patterns
• Pick path design
• Workstation ergonomics
• Slotting optimisation
• Aisle orientation and configuration (also affected by infrastructure planning)
• Equipment integration
• Safety and security
• Compliance advisory

Retail Warehouse Expansion Planning (Warehouse Consulting)

Here, our warehouse setup consultants develop the strategic framework for scaling the storage, distribution, and fulfilment capabilities of your warehouse. It is a part of our warehouse consulting services. Our objective is to enable your warehouse to handle higher business volumes and wider merchandise. We also ensure that your warehouse costs do not go up proportionately with these expanded capabilities.

• Strategic forecasting and capacity planning
• Layout and workflow optimisation
• Technology and automation integration
• Workforce and operational efficiency
• Safety and security
• Compliance advisory

Racking Design (Warehouse Consulting)

In racking design, we develop a framework of solutions that can carry the spatial diversity and velocity requirements of your inventory. As a part of warehouse consulting, our job here is to move your warehouse racking system away from standard existence towards optimising every cubic inch of available space.

• Selecting the right racking type
• Load capacity and safety management
• Vertical space optimisation
• Integration with picking logic and methodologies
• Safety and security
• Compliance advisory

Material Handling Equipment (MHE) Planning (Warehouse Consulting)

In MHE planning, we identify, select, and integrate the mechanical equipment required to navigate, store, and safeguard inventory within a warehouse. We factor in throughput, storage density, accessibility, aisle width, vertical space optimisation, costing and ownership, safety, and compliance. We define the specifications of required MHE and assist in the selection process. We also provide the blueprint for the process automation roadmap.

Warehouse Infrastructure Planning (Warehouse Consulting)

Warehouse infrastructure covers the physical assets and utilities required to put life into the layout and keep the business running efficiently and safely. In warehouse infrastructure planning, we design and organise the physical environment of warehouses to achieve high levels of efficiency, safety, and scalability.

• Structural specifications
• Aisle orientation and configuration (also affected by layout planning)
• Material Handling Equipment (MHE)
• Storage systems and solutions
• IT hardware and networking
• Environmental controls
• Dock equipment
• Safety and security
• Compliance advisory

3D Walkthroughs (Warehouse Consulting)

Instead of a limited 2D blueprint, we provide a 3D walkthrough of your warehouse. It enables you to see the VR version of the facility. Some of the advantages of 3D Walkthrough are:

• Visualisation of workflows
• Simulation of the movement of MHE for smooth navigation
• Ensuring clear visibility at intersections
• Training simulations

Warehouse Process Optimisation – The Flow

How to streamline warehouse operations?

In warehouse setup and infrastructure, we help you build the layout and physical infrastructure. In warehouse optimisation consulting, we define and streamline the flow of work within that space. Think of it as moving from the physical aspects to the logic and flow of working. Here’s how our warehouse operations consultants do it:

Inbound Optimisation (Warehouse Consulting)

In warehouse process management, efficiency begins with inbound operations. We adopt a proactive, data-driven, and KPI-based approach for inbound optimisation encompassing:

• Advanced Shipping Notices (ASN) and Scheduling
• Cross-Docking Implementation
• Optimised Receiving & Quality Control (QC)
• Directed Put-Away (Slotting)

Put-Away Optimisation (Warehouse Consulting)

Put-away optimisation is the art, science, and commerce of the placement of inbound inventory. Our objective here is to ensure that every product is stowed in the most logical location to make picking as fast as possible. Here we deal with:

• Velocity mapping
• Zone logic
• Goldilocks placement
• Dynamic positioning
• WMS integration and alignment
• Task interleaving (e.g. task allocation based on proximity from the endpoint of the previous task)
• Pickfacing

Picking Optimisation (Warehouse Consulting)

For most warehouses, picking is a manual and costly operation. We shift picking operations from linear systems to data-driven solutions. We achieve this with:

• Identifying the right picking strategies (e.g. batch picking, zone picking, cluster picking)
• Layout and path optimisation (e.g. pathing algorithms, forward pick areas)
• Identifying the right technological solutions (e.g. voice assistance, light indicators, wearable scanners)

Dispatch Optimisation (Warehouse Consulting)

For dispatch optimisation, we focus on three corners – speed to dock, cost reduction, and accuracy. Breaking it down further, we define the scope and implementation of:

• Ergonomic packing stations
• Cartonisation logic, dimensional scanners
• Automated Carrier Selection (based on identified criteria)
• Manifesting and labelling efficiency (software integration)

Returns Management (Reverse Logistics) (Warehouse Consulting)

Our specialised team of warehouse logistics consultants help you manage returns not as a pain point to you and your customers, but as a secondary inbound stream designed for speedy and accurate retrieval.

• Implement a Return Merchandise Authorisation (RMA) portal that requires customers to provide specified inputs for triggering return shipping.
• Establish the rules for re-routing returned goods. Some of the key channels are restocking and reselling (no defects), refurbishment/open-box/factory outlets (defectives), liquidation, return to suppliers, recycling, donation, and retention by customers.
• Establishment of dedicated return zones
• Integration with inventory flow (after quality checks)

Multi-Store Replenishment Systems (Warehouse Consulting)

We transform traditional, linear replenishment systems from being request-oriented into intelligent, data-driven systems. Here’s how we do it:

• Integration of Point of Sale (POS) data from every store directly into WMS for centralised visibility.
• Defining the replenishment logic for every store with automated triggering, lead-time forecasting, and store grading.
• Setting up of pre-allocated cross-docking (goods being directly transferred to stores instead of temporary deep storing).
• Defining store-focused logic for stocking, navigation, pick up, and other activities in the warehouse.
• Incorporating the rules for inter-store transfers.

Technology & Automation – The Tech

What is warehouse automation? How to automate warehouse operations?

WMS Selection and Implementation (by Experienced WMS Consultants)

We ensure that the WMS solution you put into place meets every specific strategic and operational requirement of your business. We do this in four stages – selection, configuration, implementation, and the selection of hardware equipment. In this process, we cover:

• Functional Requirement Document (FRD)
• Tier selection
• Tech evaluation
• Vendor selection
• ROI analysis
• Oversight of system integration and data migration
• Product testing
• Training
• Process mapping and SOP manuals

Multi-Store Inventory Systems – Omnichannel Preparation (Warehouse Consulting)

With a multi-store inventory system solution, we enable you to manage the visibility and availability of inventory across your entire retail network. Your business is empowered to control inventory at the enterprise level. Here, we oversee the design and implementation of:

• API-driven architecture for proper handshaking between POS, eCommerce, and WMS
• Virtual inventory pools across store network
• Automatic replacement framework
• Digital cycle counting
• Two-step transfers

Warehouse Automation Consulting (Warehouse Consulting)

Our warehouse automation consultants assist you strategically replace manual and repetitive errands with automation to bring enterprise-level value addition and solutions to real problems. We assess the scope of automation for your warehouse. We define automation requirements and identify the best-fit solutions. We assist you with vendor shortlisting, product testing, and tech implementation. In this process, we also carry out feasibility studies and ROI analysis.

AI Implementation to Overcome Operational Loopholes (Warehouse Consulting)

Going a step ahead of WMS, warehouse management becomes highly proactive and agile when AI is brought into the picture. This is exactly what we deliver with warehouse AI consulting. We leverage AI for:

• Identifying process gaps in operations
• Dynamic demand forecasting
• Inventory optimisation
• Stronger ARS (Automated Replenishment System)
• Productivity tracking
• Exception alerts

Execution Support – The Assist

Do warehouse consultants help in implementation?

In fulfilment centre and warehouse consulting, we cover the entire journey from planning to execution. We do not just preach “what to do” but also shadow-help you in the implementation of solutions as your project escort.

On-Ground Implementation (Warehouse Consulting)

We get onto the warehouse floor towards ensuring the solutions actually work at the grassroots levels. Various activities we cover include motion analysis, identifying stumbling points in workflows, error-proofing, cycle counting, real-time troubleshooting, ergonomic compliance, OJT, and safety checks.

SOP Deployment (Warehouse Consulting)

As SOP experts, we maintain that without hands-on implementation, SOP manuals become another reason to replace required procedures with habits. We ensure that SOP manuals are living documents and that anyone can pick the content and essence within a short time. We translate complex processes into visual depictions with support for multiple languages. We ensure that the SOP manuals are where and when they are needed – both physically and digitally. We identify key individuals within the organisation who can be entrusted as your internal SOP experts for future adherence. We use exception rules, audit controls, and KPI-linkage for SOP compliance and unhindered operations.

Warehouse Staff Training (Warehouse Consulting)

Our training modules focus on learning, speed, precision, and safety. Here is how we do it:

• Skill gap analysis and targeted training
• Simulation, sandbox environments, role-playing scenarios
• Interactive learning materials, training videos, wearable tech coaching
• Ergonomic training
• Dashboard literacy
• Feedback and open communication
• Cross-training

Recruitment Support (Warehouse Consulting)

In recruitment support, we develop recruitment strategies and implementation roadmaps and assist you with the implementation. We work along with you in developing the architecture of your warehouse team. Going beyond job descriptions, we develop performance-based scorecards aligned with KPIs. We identify the key skills and competencies (intellectual and physical) for each position based on job descriptions and performance scorecards. We also design on-site tests and interviews to evaluate candidates on practical comprehension and experience. YRC’s warehouse organisation consultants also redefine the organisational framework.

Inventory Audits (Warehouse Consulting)

Moving away from periodical matching, we infuse the element of perpetual accuracy into inventory audit systems.

• Implementation of cycle counting (instead of full disruptions to operations)
• Identification and analysis of the sources of errors and omissions, feasible corrections

Use of technology for faster and more accurate auditing

• Network-wide reconciliation (across stores, warehouses, hubs)
• Preparation of valuation reports
• Shrinkage tracking

Warehouse Audits (Warehouse Consulting)

In warehouse auditing, we review the performance, safety, and compliance of the entire facility. Here is what we cover in it:

• Touchpoint analysis
• Congestion mapping
• Assessment of equipment utilisation
• Physical safety checks
• Ergonomic audit
• Regulatory compliance advisory
• Space optimisation audit
• WMS performance and alignment check
• Data latency checks
• Security and access control
• Shrinkage audit

End-to-End Warehouse Outsourcing (Warehouse Consulting)

We understand that outsourcing distances you from your operations. Without proper control, your financials, branding, and customer experience might take a hit. We help you define the strategic and execution framework of warehouse outsourcing. Here are some of the critical areas we cover:

• Establish your outsourcing requirements
• Help you find a competent outsourcing partner, followed up with selection and onboarding
• Prepare RFP (Request for Proposal) document
• Carry out financial and commercial assessments
• Contract negotiation
• Prepare Service Level Agreements (SLAs)
• Technology integration strategy
• Go-live assist
• Ongoing performance and financial auditing

Our 6-Phased Framework for Warehouse Consulting

We approach developing warehouse consultation, not as one-time solutions, but as a driver for continuous improvement. Our warehouse project consultants apply a tested and proven 6-phased methodology for service design and delivery:

Why You Need to Leverage Retail Warehouse Consulting Now?

After eCommerce, quick commerce has brought the next big wave of transformation in the retail industry. Customers no longer see gratification, transparency, and control as any competitive distinctiveness; these are staple requirements now. Either your business is living up to these standards, or it is not; there is no middle path. A crucial link in the value chain that makes retail brands live up to these expectations is warehousing. A warehouse consulting expert helps you transform your warehouse to fit the bill of modern-day retail requirements. Working with warehouse consulting professionals helps you get there quicker with precision while avoiding costly mistakes.

We are a retail and eCommerce consulting brand specialising in crafting and implementing management solutions for today’s warehouses and fulfilment centres. With more than 12 years in business and a scaling global footprint, we have served 500+ brands across 25 sectors with a success ratio of 95%.

Why Companies Choose YRC for Warehouse Consulting

• 12+ Years in Business, 500+ Clients Served, Success Ratio of 95%
• Strong Retail-First Consulting Expertise
• Experienced team of warehouse improvement consultants
• Human-crafted solutions curated for every client, every situation
• Experience across Retail, Distribution, Ecommerce, and Supply Chain
• Helps Businesses Scale Warehouses alongside Store Growth
• Supports Strategy + Implementation
• Practical Execution-Led Approach
• International experience and expertise

How It Works

How to set up a warehouse and fulfilment centre from scratch?

Setting up a warehouse or fulfilment centre is a long and complex process. It is appropriate to assume a planned and methodical tactic. The job can be classified as four different sub-tasks for quality planning and implementation. These are namely People, Process, Technology & AI, and Layout & Infrastructure. Here is a broad and selective overview of each of the phases and the steps involved:

Phase 1: People

For running the warehouse and achieving operational objectives and requirements

Step 1: Assess Manpower Requirements

Outcome Example: You would have crystal-clear knowledge of manpower requirements in every department in terms of both strength and quality.

Step 2: Determine competitive wages and salaries with the scope of progression

Outcome Example: It will be easier for you to attract the right employees and retain them.

Step 3: Make necessary changes in organisational structure and design

Outcome Example: You make room for the positions within the organisational framework required to efficiently run the warehouse.

Step 4: Develop Job Descriptions (JDs) and KRAs (Key Responsibility Areas)

Outcome Example: Helps you find the right candidates and makes it easier for new hires to understand what performance and results are expected of them

Step 5: Shape the strategies and execution roadmap for hiring

Outcome Example: Provides efficiency and effectiveness to the hiring and training process

Step 6: Train your employees

Outcome Example: Significantly better compliance with internal and external compliance standards

Phase 2: Process

For operational excellence, streamlining and optimising – warehouse operations, layout, and tech stack

Step 1: Inventory Flow and Process Mapping

Outcome Example: Detailed understanding of the current requirements and practices of how goods flow, and processes followed. Crucial information for tech and layout-infra built-up

Step 2: Develop and Implement SOPs, Provide SOP Training

Outcome Example: SOPs for inbound and outbound operations, docking sequences, storage (put-away/stowing, replenishment, cross-docking, sorting placement), order fulfilment, and return handling

Step 3: Pilot Run of SOPs

Outcome Example: Measurable operational outcomes from simple activities

Step 4: Provide SOP Training

Outcome Example: Quick adaptation by employees, shorter TTP (Time-To-Productivity)

Step 5: SOP-IT Integration

Outcome Example: Warehouse operations are in alignment with installed technologies, across all levels

Step 6: SOP Compliance and Performance Audit

Outcome Example: Visible decline in shrinkage and write-offs over time

Phase 3: Layout and Infrastructure

For smooth and safe all-round navigation of inventory and optimising the inventory-handling capacity of the facility

Step 1: Assess inventory throughput, SKU profiles, and data

Outcome Example: Understanding of spatial, storage, and navigational requirements across all product categories and SKUs

Step 2: Zone mapping

Outcome Example: Inbound and receiving zones, storage zones, fulfilment zones, reverse logistics zones, infra support zones, etc.

Step 3: Choose Inventory flow design

Outcome Example: Two central options are U-Shaped and I-Shaped. Hybrid and curated options are available.

Step 4: Assess process and navigational requirements (human and equipment)

Outcome Example: Minimal congestion in docking areas

Step 5: Incorporation of safety standards and ergonomics

Outcome Example: Reduced burden on compensation budget

Step 6: Rack Planning and infrastructural support

Outcome Example: drive-in racks, multi-tier shelving systems, anti-dust coating

Step 7: MHE planning and utility alignment

Outcome Example: Acid-resistant epoxy coating for forklifts

Step 8: Planning and deployment of physical tech assets

Outcome Example: Avoiding dead zones for seamless Wi-Fi connectivity even within deep locations

Phase 4: Technology and AI

For speed, accuracy, automation, and agility in warehouse operations

Step 1: Data mapping of inventory profile, layout, infra, equipment, and SOPs

Outcome Example: Identification of the right locations for different products and SKUs

Step 2: Configure and deploy your core tech stack

Outcome Example: Implementation and integration of WMS, WES, and ERP applications

Step 3: Installation of physical tech Infrastructure and assets

Outcome Example: Setting up of RFID controls at incoming docks

Step 4: Deployment of automation and robotics solutions

Outcome Example: Self-navigating bots, AI vision systems

FAQs