Interview • 15.10.2020

Warehouse management: optimized, automated, product-oriented

Tips on how to ensure warehouse optimization

Digitization, e-commerce, increasing customer demands, and expectations – factors that not only impact retailers but also affect the way warehouses are organized.

In this interview, Johannes Tress, Co-Founder and Managing Director at everstox talks about the development to date, explains the importance of new technologies, and reveals the weak points that still exist despite the benefits of digital transformation.

If you look at a warehouse today and one of 20 years ago, how have they evolved and what has changed?

In the past, both warehouse operations and order picking processes were largely dominated by logistics for retail and wholesale, i.e. the shipment of pallets and larger shipments in cardboard boxes. Warehouses look a lot different today thanks to the increasing popularity of e-commerce and direct-to-consumer (D2C) e-commerce channels: you see many single item orders that are packed in smaller packages and delivered directly to the consumer.

Blond man with beard smiles into the camera. In the background meadow and trees...
Source: everstox

Warehouses are undergoing a digital transformation. Processes phase out analog check and inventory lists and fully embrace digitized inventory management – tracking inventory in real time and utilizing algorithms that apply historical data for inventory forecasting. This high level of data transparency and smart features would have been inconceivable only ten years ago.

Apart from the use of digital logistics solutions, we also see a change in terms of product storage. This means warehousing is becoming increasingly dynamic, which improves the efficiency of order picking and packing routes, and storage density. So-called “heat maps” in intermediate storage facilities and picking stations help optimize routes in terms of storage locations. Fully automated high-bay warehouse systems with operating units expand the warehouse storage density per cubic meter.

What role do modern technologies play in warehouse logistics and how important are people now and in the future in this setting?

Modern warehouse management technology should always make work processes easier for users, but never fully replace human labor. This is aided by a data-driven software solution with an automated data exchange between the retailer and logistics systems, performance measurement and tracking of operational KPIs, and proactive reporting to avoid challenges with bottlenecks and delayed delivery of customer orders. The technology should enable informed decisions and take over monotonous, automatable tasks at the same time. Having said that, the best software or artificial intelligence can never replace the experience, skills and, above all, the instinct and intuition of a trained logistician.

Warehouse with packages
Source: Mint_Images

What are important components of warehouse optimization?

Warehouse optimization includes both product-oriented hardware, meaning a storage space solution, and a custom warehouse software solution that is compatible with existing systems. Both aspects are essential to optimize operational management. After all, even the perfect warehousing solution with an automated high-bay warehouse system is pointless if the IT infrastructure can’t keep up with business needs. The hardware is ideally also tailored to the respective products - for example, bulky sporting goods are best warehoused in a cantilever storage rack system.

When it comes to software, technology platforms like everstox enable data-driven fulfillment and are best suited for this endeavor. These types of solutions can digitize warehouse management system (WMS) data sets, automate the data exchange between the retailer and the WMS and, – most notably - measure and ensure compliance with service level agreements (SLAs).

What are the key factors you should consider when planning to modernize your warehouse?

It always depends on the specific goals you want to achieve or the pressing issues you plan to address in your current warehouse setup. Do you want to improve warehouse efficiency and productivity? Then you may want to consider converting a warehouse with manual forklifts into a fully automated warehouse system or reorganizing logistics systems to improve order picking productivity. However, these types of measures are typically capital-intensive. Having said that, apart from using the right hardware, efficiency can also be increased with the suitable software solutions. Process transparency alone enables proactive error prediction and manages possible customer order processing problems. Data-driven platform solutions help logisticians, wholesalers, and retailers optimize logistics processes and facilitate an automated data exchange between the various sales platforms and warehouse management systems.

Where do you see weak points in this sector?

To meet the increasingly time-sensitive demands of consumers for faster and low-cost shipping, retailers tend to look for the most cost-effective solutions for picking and packing processes and warehouse and shipping operations. Indeed, logistics costs between providers can sometimes vary by up to 50 percent. However, the most efficient solution isn’t just about finding the cheapest logistics provider. It’s about selecting a provider with a matching product focus and logistics service quality. Another point to remember is that the fees for picking and fulfillment processes rarely reflect all actual costs. To achieve operational transparency, logistics providers and retailers often have added costs for hidden manual workflows, process-related tasks, or IT competencies on a day-to-day basis. That’s why it is important that retailers choose logistics providers that not only offer the most cost-effective services but also present the best solutions as it pertains to logistics, WMS, and automation.

Interview: Katja Laska

related articles:

popular articles:

Thumbnail-Photo: Real-time transparency for supply chains thanks to big data...
01.02.2021   #supply chain management #logistics

Real-time transparency for supply chains thanks to big data

More efficiency and lower costs for retailers thanks to precise ETAs

More than ever before, retailers have to be ahead of their competition when it comes to filling orders and responding to customer requirements. The global hunger for consumption reached a new high in 2019, with retail sales of USD 25 trillion. And ...

Thumbnail-Photo: 5 reasons outsourcing logistics is the way to go...
11.01.2021   #e-commerce #customer satisfaction

5 reasons outsourcing logistics is the way to go

Meeting customer expectations in the age of ecommerce

The rise of e-commerce is a pervasive force that ripples through every part of the global supply chain, calling for faster and more efficient shipping. As a result, there has been a significant increase in the adoption of logistics service ...

Thumbnail-Photo: Autonomous delivery vehicles
14.01.2021   #delivery #robotics

Autonomous delivery vehicles

Industry report 2020 on indoor and outdoor delivery robots

Reportlinker.com announces the release of the report "Autonomous Delivery Vehicle Industry Report, 2020".Indoor autonomous delivery marketUp to date, indoor autonomous delivery robots have been available in restaurants, hotels, office ...

Thumbnail-Photo: Walmart pilots smart box technology to receive fresh deliveries...
21.01.2021   #online food retailing #food delivery service

Walmart pilots smart box technology to receive fresh deliveries

Contactless grocery delivery 24/7

“What if we could conveniently deliver fresh groceries to a customer’s front door any time of the day, whether they’re home or not?” This question led Walmart to explore a smart option in their new pilot with ...

Thumbnail-Photo: Skilled returns management for more customer loyalty...
03.02.2021   #online trading #e-commerce

Skilled returns management for more customer loyalty

International returns management: transparent, fast, sustainable

On Jan. 27, 2021, the new edition of "retail salsa - Spice up your community," the new webtalk format from iXtenso and EuroShop, took place.The topic of the afternoon: the squeeze of lemon for your returns management.Want to know what ...

Thumbnail-Photo: How to manage parcel returns properly
30.11.2020   #logistics #delivery

How to manage parcel returns properly

Rules for a sustainable e-commerce

Sustainability, ethics and the ecological footprint – nothing that e-commerce can really score with. Especially shipping including returns urgently need more awareness, from customers as well as store operators.Micha Augstein, founder of ...

Thumbnail-Photo: Sustainable shipping in partnership with One Tree Planted...
08.01.2021   #sustainability #logistics

Sustainable shipping in partnership with One Tree Planted

Freight Club launches free carbon offset program for members

Freight Club, a logistics management platform, launches a free-access program to members that offsets 100% of the carbon emissions emitted from all shipment it enables. The program, in partnership with non-profit One Tree Planted, will plant trees ...

Thumbnail-Photo: Examining working environments in warehouses...
26.01.2021   #e-commerce #warehouse management

Examining working environments in warehouses

Research on new jobs in e-commerce

Researchers in occupational science and occupational health from Swedish University of Gävle and Luleå University of Technology are going to study working environments in the large warehouses that form the hubs in e-commerce. E-commerce ...