Each warehouse has three main processes: inbound, storage and outbound. This is true whether your warehouse is small, like your garage for your webshop startup or huge like Wehkamp's mega warehouse in Zwolle, the Netherlands. They all get stuff coming in, store it and take stuff out. You could argue there is a fourth process: the administration. This includes all the work needed to keep track of your warehouse, whether you do it on a piece of paper, using a computer program like Excel, or a full-fledged Warehouse Management System (WMS).
All four processes are equally important; messing something up in one will have immediate effect on the other processes. This means it is important to consider your specific business and your demands before you organize your processes. Each process can be divided in several sub-processes that may or may not exist in a certain warehouse.
The inbound process in its simplest form is just taking an item and placing it in storage. Of course, most warehouses do a little more than that.
Incoming goods are inspected before they may enter the storage. You will want to check if your supplier has sent you the right items and also the right amount. Besides that, you may need to check quality or possible damage. When an item is good enough to sell to your demanding customer, you can put it in storage.
Returns are basically the same as inspection of items you receive from your suppliers. Notable difference is that you will want a 100% check.
In some cases, especially when you have an automated system, you have to repackage the incoming items before you can store them. Think of putting them in standardized boxes or crates.
Not all suppliers will label their items with the (bar)codes that you need in your process. If that is the case, you will have to add those codes yourself. This can be just an article code (like the EAN or UPC codes) or an item code, where each item has its own unique code.
Many articles have extra data that is not always available from the purchase order or packing slip. Food has expiry dates or there may be LOT-codes you need to track. This data is also entered in the inbound process. Also when article data is still unknown, like size or weight, this is the place where you can add this information to your articles or items.
The storage process decides where and how your items will be stored. Different articles have different needs for storage: ice cream goes in the fridge and articles that are popular need to be stored in a convenient location. After inspection is done, you or the Warehouse Management System (WMS) will decide where the items need to be placed. Most ecommerce warehouses will have different storage types, based on the popularity or other properties of the item.
Many warehouses are divided in bulk storage and pick storage. Bulk is where large amounts of items are stored, often on pallets. Picking is done from locations that are easier reached by a person. The process to fill the picking locations from bulk is called "replenishment". This is done before or during the order picking process, to make sure all the picking locations are filled and the picking process is not slowed down.
Pallets are stored in pallet racking, using a forklift truck to put the pallets in and take them out. Pallet racks are often in a warehouse with a high ceiling, so several layers can be stored. Usually, this kind of storage is used as bulk storage, from which replenishment to other locations is done.
You would use shelves to store a limited amount of items. Shelves are usually filled from replenishment, not directly from any inbound process. Shelves can be filled and emptied by hand. Advantage is that almost any product can be placed here, only limited by size. A disadvantage is the speed of which a pick can be done.
Flowracks are used for higher throughput items. They are filled from one side and the items flow (roll) to the other side. An advantage is that inbound/replenishment and outbound processes are physically divided, creating the possibility to do it simultaneously. An important disadvantage is the strict requirement on size (you cannot put anything anywhere). Flowracks are often combined with pick-to-light to speed up the picking even more.
Automated Storage and Retrieval Systems (AS/RS)
Many different AS/RS systems exist, for pallets, boxes and separate items. Each system has its own limited domain in which it can perform, so to make these system cost effective, you need to do thorough research and have a high enough throughput. Main advantages are higher speed and higher accuracy.
The outbound process is everything that is needed to fulfil a customer's order. This includes order picking, but also packing, shipping or perhaps some added value you may oofer our customers.
Order picking comes in many different forms and use a lot of different methods. There are several processes and methods when picking orders:
- single-order picking: you pick all items for a single order. You cannot mix orders, but when your orders are small, this can be quite inefficient. For large orders, single-order picking might be the right choice.
- batch picking: you pick items for multiple orders at once. This results in a higher efficiency, but it introduces the risk of mixing orders. You can use technology to lower that risk.
- zone picking: you collect all items within a certain area (zone) of your warehouse
- consolidation: merging several pickorders to form a client order, this is usually needed when using zone picking
In a warehouse of some size, each of these methods will be used, often combined.
A lot of technology exists to speed up order picking or lower the risk of errors.
- digitising picking: relatively easy to implement, you can replace the paper picking list with some kind of electronic device. This way, there is no need to manually process the lists.
- barcode scanning: this is a low-entry technology, which enables the picker to check any actions he has to do or make the data entry easier. It doesn't necessarily speed up the picking process.
- conveyor belts: a little more expensive, it can decrease the amount of walking order pickers have to do,
- goods-to-man: often highly automated, this technology moves the goods, and lets the order picker stay in one spot.