Cloud-Based vs On-premise Warehouse Management System for E-commerce

Many people are now using cloud environment for personal needs such as photos, videos, documents such as on iCloud, Google Cloud. Hence, people have been using emails on the cloud for a very long time with the invention of the internet with Yahoo, Hotmail. Having most of our personal items on the cloud avoids risks and saves costs for us. So why not having our business systems on the cloud? Companies can use inventory management software in 2 different models. On-premise systems that they can host on their own servers and purchase licenses by making a huge initial investment. Also, the companies worry about the maintenance, accessibility, disaster recovery issues. Cloud-based systems that are hosted on the provider’s cloud environment and get software-as-a-service by paying for monthly subscriptions. They don’t require any initial investment and they provide all tools to support your operations throughout your growth process. Therefore, cloud-based warehouse management systems offer many advantages that don’t consume any energy of the user company. They provide leverage without requiring any initial capital.

Cost Effectiveness
I prepared an example below to use a warehouse management software with 5 users both in cloud-based and on-premise model. As seen in below chart, the total budget for a cloud-based warehouse management system is less than an on-premise inventory management software even after 7 years.

In below example; the total subscription fees for 5 users is $1,500/month and there is a $3,000 setup fee in the cloud-based model.

Whereas, the licenses for an on-premise model can be purchased for $50,000 and the budget for the implementation will be $50,000.

Below graph doesn’t include the hardware costs that should be covered in the on-premise model. Still, a cloud-based model is much cost effective than the on-premise model.

Cloud vs On-premise costing

Cloud Technology
Cloud-based warehouse management software is more advanced from a technology perspective. They are all web-based applications and they offer the chance to work on any device anywhere on the planet. On the other hand, cloud-based warehouse management software providers are agiler when it comes to improving the software, making developments and automatically updating the marketplaces, shopping carts and warehouses. Cloud-based warehouse management system users always use the most recent versions of their systems.

Scalability
Growing online retailers need systems that grow with them. They want to increase their use of the system as their warehouse operations grow. That’s why the subscription model and the option to add more users etc. is always more attractive.

Additionally, the technology of the inventory system should also allow for scaling the business. Not all cloud-based warehouse management system is capable of scaling all the way. Some of them can’t support operations eg. after 20 users. Even if you opt to go with a cloud-based inventory system, the online retailers should be careful to select a system that will support their growth for the next 5 – 6 years at least.

Fast Onboarding
Cloud-based systems are more advanced from a technology perspective and they are agiler when it comes to setup and configuration of the systems. Because these systems offer standardized fulfillment business models and processes. Within a standardized fulfillment model, they are considering all business cases that they will face and they build more flexible systems. The flexibility brings fast onboarding such as in 1-2 weeks. Whereas on-premise systems take 4-6 months to implement and start using.

Risk-Free
What happens when you make an investment in an on-premise inventory management system and you are not happy at the end of 12 months. Either you will keep investing for extra development to customize it or you will change it. There is a high risk involved in the on-premise model.

However, when you start using a cloud-warehouse management system and if you are not happy at the end of 12 months, you just unsubscribe from the provider’s services. There is no risk involved.

5 Questions 3PL’s Need Answered Before Building an In-House WMS
5 Questions 3PL’s Need Answered Before Building an In-House WMS

So you’re a 3PL considering building your own warehouse management system (WMS). Where do you even start to figure out whether this choice is right for you? Developing in-house depends on your business requirements rather than the inherent qualities of a specific system. A commercial WMS system isn’t always a perfect fit for your needs, but in many cases systems developed in-house also fall short.

You can make an informed decision for your company only after careful research and think. There are a few key factors that should be considered making a WMS solution decision. Here are five questions you should ask yourself before building your own WMS:

How Much Will You Scale?
Major software companies have begun to develop WMS system over the past decade. Most of these programs focus on the needs of 3PL clients rather than 3PL companies themselves.

The WMS market is expected to grow by 20% over the next several years. As e-commerce grow and strive to keep up with the market, they also begin to support multiple distribution channels. The higher the scale, the more vital a flexible and powerful WMS becomes. While you could build your own WMS in-house, it takes a lot of time and resources to adopt an in-house program as your company scales. A major reason to consider a commercial WMS is their research and development resources. In the case of a commercial WMS, the solution providers maintain development teams that soak up the latest technology and can constantly iterate. This is a significant advantage over the typically much smaller staffs retained by 3PL’s who decide to build their own systems.

What Are Your Core Needs?
One of the first steps you should take as a 3PL is defining your current clients’ needs. You should also define how you expect a software tool to keep track of the business processes. By doing so, you will nail down exactly how you complete transactions within your company, what your key business metrics are, and what you want to provide to your clients as you scale. These factors are huge in determining whether a 3PL has the bandwidth to create an in-house WMS that will match their needs and the needs of their customers.

Who Are Your Target Clients?
You should also define your target client profile. If you are targeting to serve food companies in the near future even if you don’t have any today, the WMS functions specific to the food industry will play a key role.

For most 3PLs, things move so fast that they can sign a contract with a client in an industry that they have no experience with before. In this case, a commercial WMS would have a deeper knowledge base in how this industry works, and how to manage the warehouse efficiently. While you could build an in-house system despite limited experience in another industry, research and development would take up valuable time that could otherwise be spent elsewhere.

Additionally, commercial WMS providers typically offer multiple product types or business models (B2B, B2C, B2Store) that would be difficult to switch to with an in-house system. If your 3PL might venture into other industries, the added flexibility of commercial systems should be considered.

Can You Handle the Integrations?
As a 3PL, you will need to build integrations with your clients’ ERP software for a seamless service experience. Every WMS will need to be flexible and be able to handle multiple future integrations. Many commercial WMS solutions have already built in that infrastructure many years ago. Commercial WMS providers often have large development teams and have experienced hundreds of those integrations before.

This is especially important to consider if you are providing warehousing and order fulfillment services to online retailers. This is because you will have to connect to hundreds of sales channels such as marketplaces, shopping carts and also shipment carriers, and balance them all. Commercial WMS companies make huge investments to build strong connections with all these parties and continuously maintain these integrations. If you want to build your own in-house WMS, however, you will have to build these from scratch.

Is It Worth Your Time?
As a 3PL, your main priority is selling the idea of “outsourcing” to your clients. Your key pitch usually sounds something like, “Let us handle your warehousing and logistics so that you can focus on your business”. Why wouldn’t you apply the same logic to your software needs? If you are not a software company and developing software is not your core business, why spend the time and money developing something that already exists? Before venturing into software development, be sure to ask yourself the questions above. After all, the key is to focus on your business and sell more — not less.

How a Warehouse Management System Helps Growth in E-commerce?

E-commerce is a highly competitive space for most of the products. They have to focus on sales and marketing and they should spend. If they don’t have enough capital to spend on sales and marketing, they stay behind the competition and they are for sure having hard times growing and selling more. The other option would be to support sales and marketing through high margins. However, the competition won’t allow them to set high product prices to gain high margins. E-commerce businesses have a few main cost components. One of them is inventory holding and operations costs. By cutting their operations costs, they achieve price elasticity and higher margins. Through higher margins, they have more funds to spend on sales and marketing and they start growing in e-commerce at a steady level.

 

Accurate Warehouse Management is the Key to Success

Accurate Warehouse Management is the Key to Success

Warehouse management system for e-commerce helps companies firstly to have access to real-time and accurate data such as inventory, order, shipment. When the accurate inventory data is pushed back to marketplaces and shopping carts, the companies start avoiding overselling and missing sales opportunities. With the accurate inventory and order data, the companies can create the base for demand forecasting and optimize their inventory. They can hold the right inventory mix and quantity by minimizing their inventory holding costs.

Also, the customers are provided with on-time and accurate data of their orders and shipments. So the customer service level is improved drastically and customers become returning customers.

Lastly, the e-commerce businesses start saving costs from their operational resources and manpower that they use for warehousing and order fulfillment. This is one of the real gains of a warehouse management system for an e-commerce business. The businesses should not be satisfied with only scanning barcodes and monitoring inventory in and out. The warehouse management system should add value to the business by the real means of automation.

 

What Makes A Good Warehouse Management System?

What Makes A Good Warehouse Management System?

Choosing a good warehouse management system is not easy, especially if you don’t know your options for picking the warehouse system that is right for you. How do you know what to look for in a warehouse software, or how to tell the difference between one or the other? The answer does not necessarily lie in the price of the product; just because the warehouse management system is more expensive, it doesn’t mean it is the best for you. However, there ARE ways of finding the perfect system for you. Here are a few key traits to look for in a good warehouse management system:

Accurate

A warehouse system that works accurately from start to finish with the minimal amount of errors per order line is a good warehouse management system for retailers. This ensures that your inventory transactions will be recorded properly, with the smallest amount of mishaps. By checking this key component, you will save yourself damage-control time in the long run.

Cost-Effective

You can ensure that a good warehouse management system is cost-effective by checking whether you will have to make an investment in an on-premise system or subscribe to a cloud-based system. Cloud-based warehouse systems are much more cost-effective than licensing an on-premise system because the investment and implementation is far cheaper, and often you have more tools at your disposal without worrying about the hardware costs. Cloud warehouse management system can also be constantly updated with the latest and greatest tools, giving you a more recent version of the system with no reinstallation hassle.

Integration Ready

Whether you are a retailer or supplier, a good warehouse system should be adaptable to any customer need and be ready to integrate with various shipping platforms, such as UPS, USPS, DHL and FedEx. Every online retailer has a different shipping carrier, so make sure that your warehouse management system is flexible enough to integrate with that, as well as your inventory, purchase order and order processing systems.

Transparent

Finally, the most important thing to look for in a good warehouse management system is one that is transparent and provides information on-demand. It should allow you to see what is going on with your inventory in real time. Look for a warehouse system that provides real-time reporting, as well as a clear view of the date and time of warehouse and fulfillment activities. This ensures that if there is a problem, you can easily find the source of the issue.

The ultimate purpose of a good warehouse management system is to make warehouse management worry-free—does your system do that for you? Logiwa’s multi-channel inventory management system checks all these boxes and more. Our B2B and B2C cloud warehouse management system is one of the most advanced systems around. Check out what we can do for you here.

 

Increase Your Margins with Warehouse Management System

E-commerce companies, by being agile and responsive to sales and marketing in their supply chains, are able to sell more products.

E-commerce is a very dynamic business environment. The sales and marketing policies and market conditions are changing fast. When the sales and marketing departments change their policies, the e-commerce supply chains should be responding to these changes very fast. Because most of the sales and marketing campaigns and policies show the real effect in supply chain and logistics transactions and eventually the products and services that are delivered to the customer. Most advanced warehouse management systems(WMS) that are flexible and agile enough, provide the agility and responsiveness to e-commerce supply chains.

E-commerce companies have 2 groups of costs that have the highest portion. Marketing costs and logistics costs. Their margins get directly affected by these costs. The competition for e-commerce companies is mostly based on pricing. The logistics management systems, especially warehouse management and order fulfillment systems are able to achieve 15-20% logistics cost savings in e-commerce operations. When an e-commerce company achieves these savings, there are 2 ways that they will go one step ahead in the competition.

Since their margins are increased by lowering logistics costs, either they can be more flexible with their pricing or they can spend more on marketing. Either way, they are able to sell more.

 

Scale up your Retail Business with the right Solution

Scale up your Retail Business with the right Solution

Reduced operational costs increase your margins that end up either in price elasticity or increased marketing budget. Logiwa leverages retailers’ sales through optimized margins by harmonizing all sales channels within the same supply chain and allowing you to scale your supply chain.

Cycle time

Cycle time is the new KPI of retail and e-commerce. It represents the frequency of order shipment. The lower the cycle time, the faster the fulfillment operation is. Logiwa reduces your cycle time with adaptive and smart logistics systems.

Logiwa balances your supply chain by unblocking your bottlenecks and planning your resources. Logiwa offers “Bottleneck Solver” functionality, a state-of-the-art technology, to monitor, plan and manage your order fulfillment processes. By unblocking bottlenecks of the processes, reduce your cycle time. We allow you to ship more.

Productivity

Seamless processes play a key role in fulfillment productivity. Logiwa also brings productivity to fulfillment. Although the workforce is crucial for accomplishing the customer experience, smart logistics systems play a key role to enhance customer service and reduce costs by guiding the workforce efficiently.

Logiwa‘s order fulfillment functionality is designed to improve retail and e-commerce operations. Logiwa provides smart process designs with cutting-edge technology to make it seamless. Logiwa helps you complete more transactions with fewer resources.

Accuracy

Inaccurate transactions end up in higher costs in supply chain operations. When an inventory transaction is completed inaccurately, it means that it will be done twice if noticed right away. If not noticed, it will have bigger losses for the company such as shipping a wrong item to the customer, locking down a location for counting. Doing transactions accurately in the first time definitely brings cost efficiency to the supply chain transactions and obviously increases margins.

Feel the power of control in your logistics operations. Logiwa can be configured to grant users the required privileges. Within these grants, the system won’t let users do mistakes. Logiwa benefits from various technologies to achieve accuracy such as a barcode, voice recognition, pick-to-light, automated material handling, conveyor and sorter systems.

Logiwa Streamlines Cosmetics Inventory Management

Inventory management is one of the challenges in the cosmetics online retail business. Constantly changing market conditions and competitive environment is forcing cosmetics industry into a more responsive warehouse management model. Consumers have a certain level of brand loyalty. However, it is very likely that they will go for another brand if they can’t get a good customer service level such as accurate and on-time delivery. Else, they can find the same brand at another vendor in the market. Competition is between the supply chains of the cosmetics brands as it happens in most of the consumer packaged goods industry. Logiwa easily responds to the needs and challenges in the cosmetics retail. You can enjoy the demand-driven order fulfillment strategies to access your consumers.

Logiwa provides the following improvements to the cosmetics retail;

  • Accurate and real-time inventory management
  • Commitment to accurate and on-time shipments.
  • Effective tracking of lot/batch number information
  • Inventory visibility and accuracy
  • Applying the most feasible order picking strategies in the warehouse
  • Faster packing, labeling, and pre-packing processes.
  • Tight shopping cart integration
  • Traceability along the supply chain.


Logiwa WMS Fits Perfectly in your E-Commerce Warehouse

Logiwa WMS is a cloud warehouse and inventory management software that focuses on the inventory management and order fulfillment needs of retail and e-commerce businesses overall. We have been helping hundreds of retailers around the world for more than a decade. We help retailers in apparel and fashion, furniture, consumer packaged goods, electronics and household items as well as Cosmetics. Please feel free to contact us at info@logiwa.com to learn about our expertise in all retail segments and to see how we are connected to dozens of different sales channels..


 Want to find out more about how an inventory management system can work for you? Schedule a free demo with Logiwa today!

Boost Your Business with Logiwa WMS and SquareSpace Integration

We’re excited to announce that we are now fully integrated with Squarespace, SAAS-based content management system, which allows online business owners to create and maintain their websites, blogs, and online stores.

Our customers can manage their shipping and inventory efficiently with Logiwa WMSSquarespace integration.

Through integration with Squarespace, Logiwa WMS allows you to easily start selling on various sales channels, share inventory and synchronize orders across different sales channels, prevent overselling and missing sales opportunities.

What can our customers do with Squarespace and Logiwa WMS integration?

With seamless integration with Squarespace, our customers can;

  • Capture orders from their connected sales channels such as Amazon, eBay, Shopify, and Walmart
  • Process orders within Logiwa
  • Connect to major shipping carriers like USPS, FedEx, UPS, Canada Post, and DHL to deliver orders to the customer
  • Calculate shipping rates before printing carrier labels
  • Generate and print shipping labels
  • Get tracking number and shipping information automatically updated on the originated sales channel

Connect your business to Logiwa WMS

Logiwa WMS is the most connected inventory management system that connects all parties and offers seamless supply chain management. Logiwa WMS provides:

  • Shopping cart integrations ( Shopify, Magento, BigCommerce etc.)
  • Marketplace integrations (Amazon, eBay, Walmart, Jet.com, Houzz.com, Groupon, Sears etc.)
  • Shipment carrier integrations (FedEx, UPS, USPS, DHL etc.)
  • Accounting system integrations( QuickBooks, Xero etc.)
  • Open Restful APIs

About Squarespace

Squarespace is a service-based content management system, integrated website builder, blogging platform, hosting service, commerce platform, and domain name registrar. The system allows individuals and businesses to create and maintain websites, blogs, and online stores. (*) (from Wikipedia)

Squarespace allows their users to;

  • Select and create their original website from hundreds of customizable templates
  • Open and manage their online stores
  • Create their blogs to share their thoughts and experiences in a professional platform
  • Connect their domain to G Suite and create custom emails for their personal brands or businesses

Logiwa is Integrated Seamlessly with Groupon

Logiwa is fully integrated with Groupon. When an order is processed on Groupon, Logiwa automatically updates the inventory and shipment data in the system. Thanks to our inventory management integration, sellers can easily know the status of their orders and even optimize their operation process. Groupon integration includes:

  • Pull orders from Groupon
  • Pull product data from Groupon
  • Push real-time inventory quantities
  • Push order & shipment status & tracking number back to Groupon
  • Create pick list and shipment labels

 

To learn more about our integrations or other benefits of Logiwa, sign up for a product tour below!

Meet one of our industry experts to see our product’s free live demo.

5 reasons why you need Inventory Management Software for your online retail business

It is more important than ever as an online retailer to manage logistics to account for sudden influxes of orders. Managing your inventory can take a lot of calculation, endless spreadsheets, and missing or misplaced inventory.  An inventory management system can help you to run your online retail business in new and exciting ways. By investing in a quality inventory management solution, you can easily streamline your processes and improve control over your business. Here are the top 5 reasons why Inventory Management Software can completely change your online retail game:

 

5 reason why inventory management system

It Saves Money and Time

A WMS can help save both money and time by optimizing your warehouse. However, one of the biggest ways that a WMS can save you money is by completing all your administrative tasks, such as entering and updating, for you. Instead of having to input inventory into an excel spreadsheet and keep track of it all manually, your WMS can manage it all with just a quick scan. This can save you hours of tedious work, allowing you to spend your valuable time elsewhere!  Additionally, a cloud-based WMS system can be used by your remote workforce as well as employees who need to access the system from home or in the field, meaning you don’t need to buy special devices or waste time syncing and updating spreadsheets to manage your inventory.

It Automates Your Warehouse

Logging inventory manually is always risky, especially since the margin of error is way higher than a simple barcode scan. You could misplace or lose a piece of inventory or worse — log it twice. With all these inconsistencies, it can be difficult to know exactly how much inventory you have! An inventory management system makes sure that you know where your product is at all times. Additionally, it automates and optimizes your picking and scanning process, choosing the types of picking that are best suited to your needs. This increases efficiency and also helps save your pickers valuable walking time.  

It Minimizes Human Error

Logging inventory manually can be a chore, and can result in many human errors. When doing bookkeeping manually, you run the risk of misplacing inventory, or worse — inventory is lost, accidentally not logged or left un-updated. It can even cause errors when trying to calculate your safety stock levels or ATP, which could cause you to miss a sale and ultimately lose money. With a WMS, your bookkeeping is guaranteed to be accurate and is always easily accessible, which means you’re always able to keep up with it in real-time.

It Gathers Data For You

Analyzing data from your warehouse can help you understand a lot of trends in the industry and with your business as well. Data provides insights into your future threats and opportunities, and summarizes this into a report that can help you predict future trends. This makes statistics more significant and the results more important than ever. While data analysis is incredibly important, making sure the data is accurate and valid is crucial. You should make sure to have the proper systems and tools in place so you can collect data in a manageable and accurate way. A WMS, for example, can create data reports and analyses for you.

It Keeps Customers Updated

Your customers rely on tracking their purchases now more than ever, and creating a reliable tracking and return system can be difficult to handle on your own. It can be even more difficult to ensure that shipping information gets sent out on time to the right customer, or provide confirmation that their return is being processed. Additionally, your customers will be disappointed if the product they order is not available immediately. Inventory software helps to keep them informed by automatically updating stock status across all your sales channels.

 

Do you need an Inventory Management System?

Meet one of our industry experts to see our product’s free live demo.

How Inventory Management Contributes to Online Sales

 

Nowadays, online retail is king. It’s more important than ever to manage your inventory for e-commerce businesses and make the sales process efficient and smooth. Manual inventory management may seem manageable now, but as your business scales, so does the amount of orders that need to be fulfilled, and it can get even more difficult to track your inventory. An inventory management system, or WMS, is a great way to solve these small human errors that can cost you major sales. By using an automated inventory management system, you can not only be more efficient, but convert single sales into repeat customers. Here are five ways to increase sales with the right inventory management:

 

It Minimizes Errors

Each small misstep due to human error can cost you a huge amount of money in lost sales. One example of this is in managing selling across multiple channels. Balancing inventory can be difficult for multi-channel e-commerce stores, because often the same pool of inventory is rapidly depleting at different rates. This can mean that you might sell out of the product and restock, but other channels might not get updated to reflect this, which results in a false “sold out” sign and lost sales. An inventory management system can ensure that you haven’t lost any potential customers by making sure you have enough stock supplies to minimize sales loss. Manual inventory management can be slower and take longer than automated systems. Inventory management softwares automatically generates your pick list, ensuring the right order is picked each time.Good inventory management tells you where your inventory is at all times, what you are running out of, and what you should reorder, ensuring that your company is never sold out when it shouldn’t be.  

 

It Improves Customer Service Levels

Your customers will be disappointed if the product they order is not available immediately, or shipped to them as soon as possible. Returns can be even trickier to handle, especially when competing against retail kings like Amazon. Inventory management software can help keep your customers informed about their orders and returns by automatically updating them every step of the way across all your sales channels.

Additionally, an inventory management system makes sure that the right items get shipped with the right order, minimizing unnecessary errors that could otherwise make you lose a potential customer or a high rate of returns. By shipping the right product every time, your customers know that they are getting what they asked and waited for, and that they can trust your store in the future. It also reduces the chances that your store gets a low rating on Amazon, which helps with future sales. Additionally, having tracking information helps prevent missing packages and makes sure that the customer knows where their product is at all times, giving them peace of mind and assurance that their money was well spent!

 

It Saves You Money

As your company begins to scale, it can be harder and harder to know what’s going on with your inventory within the warehouse. Inventory management software can help boost insight by giving you access to every process that is happening in your warehouse in real-time. The automatic updates and alerts for slow or surplus stock saves you money that you could have tied up in unnecessary inventory, freeing up resources for potential sales.  

Since the stock is a huge biggest asset for businesses, it is essential to be able to forecast and streamline inventory levels to improve sales. By having a system measure your inventory levels, you ensure that a popular product is never sold out again, and that your store can be relied on to provide the goods your customers love.

 

Make Your Operations More Efficient and Productive

Inventory management is great for thinking ahead for your company, too. An Inventory Management System helps you measure what your best and worst performing products are, and what might sell better in the future. This helps make your future operations more efficient and productive because you can now market the trends your software recognized, resulting in more sales.

Inventory management also ensures that your warehouse can ship its products seamlessly and easily, ensuring your customer gets your products at the correct time. By completely automating your processes in the warehouse, you can optimize picking routes and save time in the packing process, which helps not only your employees fulfill an order faster, but make sure it’s less tedious to do so. You can not only ship faster with an inventory management system, but also focus your efforts on what the data shows is going to help boost your business most.

 

They Do The Data Crunching For You

As a retailer, it can be a nightmare to calculate KPI’s and inventory benchmarks, especially as the buying and selling seasons fluctuate.  An inventory management system calculates benchmark numbers such as ATP, Reorder Points, and Safety Stock by crunching the data for you. The system can even adjust to minor fluctuations and patterns over time that a human might miss!

Safety stock,  or buffer stock, is a set amount of extra stock that mitigates risk during lead time. Your safety stock level is usually below the reorder point level, but just enough to account for fluctuations in demand. A good safety stock level makes sure that your stock will never dip below 0. This means that, should sales suddenly increase, you still have some inventory in the bank while you’re waiting for a purchase order restock.  

Unlike safety stock, which is used as a buffer if demand fluctuates or unforeseen delays arise, ATP  is what you have available in the near future.  ATP is the projected amount of inventory you have left available to sell, not including allocated inventory. It is like promise that you will always have a specific amount of inventory available to sell. WMS systems help calculate Available to Promise inventory, or ATP. ATP tells you the amount of inventory you have available to sell, making sure you don’t risk selling inventory you don’t have. Knowing these numbers ensure that you will never miss a sale just because of bad bookkeeping!

 

Do you need an Inventory Management System?

Meet one of our industry experts to see our product’s free live demo.

 

5 Reasons Why You Need to be Using SKU Barcodes, Now!

Using SKU barcodes to help manage your e-commerce business might seem like an unnecessary step. After all, keeping track of your inventory hasn’t been too difficult so far, and there haven’t been any problems yet, right?

SKU barcodes are more important than you might think.

Barcodes use item numbers or stock keeping units (SKUs) for your Amazon store. Barcodes help you reach your full sales potential, regardless of the size of your inventory, by keeping track of and managing your inventory in your warehouse. Many professional companies use SKU barcodes to manage their goods and sell them across multiple marketplaces, but why is it so beneficial? Here are five reasons why you should use barcodes with your business:

 

 

1. It’s Easy

Barcodes helps in many different ways, such as categorizing products easily, measuring inventory levels, purchasing accurate items, and helping make communication between you, the vendors and your customers smooth and efficient. Barcodes are easy to implement and keep track of; instead of having to input unique individual numbers for each product,  you can easily scan in or out a piece of inventory and have it register automatically in your inventory management system. The data on that item can then be recalled at any time with a simple scan, and be accessible from all devices.

2. It’s Accurate

Barcode implementation helps ensure that an item is never double counted, lost, or mislabeled. By attaching a barcode to each product in your inventory, you can also easily keep track of how much of a particular type of product you have. This can be beneficial when measuring inventory levels and deciding on numbers like safety stock. Additionally, if you want to sell your product across multiple sales channels such as Amazon, eBay, Walmart, or Shopify, these channels require an SKU or UPC to list your product. If you already have SKUs assigned to your products, it will be easier for you to match different listings of the same product amongst all your online channels. If you use an inventory management software, it will act as a sort of hub for all your sales channels by connecting to other sales channels and feeding them the correct inventory quantity for the right product.

3. It’s Cost-Effective

Implementing barcodes in your warehouse is very cost-effective! Each barcode label only costs a few cents, and all will be compatible with an inventory management system, ensuring that they work every time. Additionally, barcode implementation cuts down on work and training time, which will improve overhead costs and save you money by increasing productivity. Finally, implementing SKU barcodes ensures that you do not tie up money in accidentally ordering excess inventory, which can save you money in the long run.

4. It’s Accessible

Barcode technology is simple and accessible to implement and can be used in a variety of ways. Additionally, the technology is everywhere and internationally recognized, which helps when selling overseas. Every experienced merchant knows that the best way to search and find a product is the SKU code or the UPC code. Barcodes also help other retailers search for your product and find your store. WMS systems like Logiwa help manage barcode data and provide access to it in real-time.

5. It’s Secure

Barcodes not only streamline the sales process but also leave less room for errors. Without a barcode, it is impossible to tell whether a returned item truly came from your store. For example, if you sell dish soap and someone returns it to your store, you have no way of telling whether the dish soap being returned is truly from your store, or if it is from somewhere else. Barcodes make sure your inventory is secure and free from fraud situations like this. It also keeps track of all your inventory and allows your system to pool data from a quick scan, which can help when having to report exact numbers for taxes or other purposes. Barcodes provide the security of knowing that your inventory is accurate and error-free, and that you have data for it always.

 

Do you need an Inventory Management System?

Meet one of our industry experts to see our product’s free live demo.

Is Your Warehouse Ready for Automation?

We’ve been writing a lot about warehouse automation lately on our blog, and it’s easy to see why. Automation is modernizing faster than ever before, with robots that can open doors and automatic sorters becoming common place in larger warehouses. Companies like Amazon use small robots to help speed up the picking process, and soon enough, humanoid robots may even become a thing.

Ready for Warehouse Automation?

But how do you know if your warehouse ready for automation, or if the investment is worth the money? Here are a few key metrics to look at:

 

Warehouse Automation 1

 

Data is incredibly important when deciding whether or not your warehouse is ready for automation, and whether you’ll make more bang for your buck. The best way to fetch data on your warehouse is by pulling it from a warehouse management system (WMS) you’ve been using.  For example, let’s assume we’ve fetched data from Warehouse X using Logiwa. By looking at X’s data, we can use the following metrics to measure viability:

Median number of shipments or shipment orders = 388/hour.

Average # shipments: 416/hr

Median # products shipped: 1328/hr

Average # products shipped: 1376/hr

These metrics are very important to analyze your data because it indicates the amount of work an automated system would have to do to complete the same amount of orders and remain a profitable asset to Company X. If these numbers are too low and the rate of orders doesn’t increase, the automation used will go through these orders too quickly, which could result in a disrupted order flow. Worse, the investment in this automation might not pay off within a year and could end up taking longer to return true value. However, if these metrics are high, this means that installing automation such as an automatic sorter will return its value quickly because it will be constantly utilized and bring efficiency to the warehouse.

 

Warehouse Automation 2

 

Another key metric we looked at is the pattern of shipments over time. As you can see, the # of shipments over time for Company X was erratic but should have been more constant like the graph on the right. If your number of shipments over time fluctuates dramatically from week to week, automation will not be able to return much value because it will be underutilized during the slow days. In order to properly implement automation, you should constantly have a smooth pattern for shipments over time.

Finally, a last key metric to look at is your company’s service level. In this case, that means a company’s commitment to shipping and delivery speed. The service terms, such as same-day delivery or next day delivery, will drastically affect your decision. In an erratic demand environment, if the service level is just 24 hours, it would be very difficult to implement an automated sorter.This is because, during the low volume days, you can not use your sorter efficiently. However, if the service terms are longer such as 4 days, then you can take advantage of your delivery terms to smoothen the shipments. A high volume days shipment can then be scheduled over the next four days rather than in one single day. This way, you can have a smooth shipment pattern, which you can utilize your automation investment.

Overall, some key questions to ask yourself when considering investing in warehouse automation are:

  1. Will it be in constant use?
  2. Will it return value quickly?
  3. Does your company handle enough orders to justify automation?

 

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What KPI’s Should I Use To Measure My Picking Process?

I recently visited a client last week who had a dilemma with his online retail business; something they were willing to pay hundreds and thousands of dollars to fix. They needed help with their picking efficiency. 

My customer came to me and asked me whether their picking process was efficient or not. They asked for a benchmark to compare themselves with, but the simple truth is that it’s very difficult to find one. After taking a look at their historical data, we analyzed their data and fetched their report from their system.

I came up with two KPI’s that I think are great benchmarks for measuring picking efficiency:

The first KPI should be as high as possible, and the second should be as low as possible for an e-commerce warehouse. Why?

First, let’s take a look at what types of picking they were using in their warehouse, and what types of orders they were fulfilling.

They were using cluster or batch picking in their warehouse, picking around 15 orders per trip. Our system was directing them to specific locations, wherein they would simply pick what was there. The client hadn’t considered other methods of picking, or what types of orders were being fulfilled.  

Let’s take a more in-depth look the types of picking methods they were using for picking efficiency:

Cluster Picking

Cluster picking is the process of picking multiple orders in the same picking trip into distinct totes or bins. Generally, multi-tote or multi-bin car/carts are used to execute a cluster pick batch. In a cluster picking batch, each order is assigned to a distinct tote or bin. This is useful for orders with multiple different items, because it minimizes the amount of walking required for each picker, thus increasing picking efficiency.

Batch Picking

Batch picking is the process of picking multiple orders in the same picking trip into same car/cart. Generally, a batch picking trip is followed by a sorting or consolidation process which you sort or consolidate batch picked products into distinct totes. The only exception to this process is single item orders. Single items orders are directly transferred to packing stations to be packed.  Batch picking is handy for picking multiple single orders at once.


Warehouse-batch-picking-trip-01

 

So How Do You Measure Picking Efficiency?

To create the two KPI’s, I analyzed data produced from jobs. For each job, I checked the start and finish time, the number of ORDERS and SKUS the picker picked, the total quantity picked, and  the number of locations visited.

From these numbers, I found that their average quantity picked/location  was around 2, but it should have been 4. I also determined that their locations visited/ job or trip was around 17, and it should be around  8 or 10 for their warehouse.

We also determined that 35% of their orders are single item orders, meaning they had 1 product in each order. They were picking these orders with a cluster picking approach, which results in a lower number of items picked per trip.  

From a productivity point of view, visiting less locations per trip means your trip will be shorter, increasing picking efficiency. Additionally, picking more products per location means you have aligned orders correctly so that most orders that have the same SKUs are in the same batch/trip. This number should always be high.

Solutions

My first overall solution for picking efficiency was to split or separate their single item order base to a different job. That way, we could create one big batch trip for all single items, and the customer would not need to sort or split those items, since there is only one SKU per order. This will help increase the first KPI because 80% of their orders are single item orders using the same 10 SKU’s. Because of this, one job dedicated to single item orders will take care of 80% all the orders at once.

My second solution was to analyze the data further, and see if any orders are much larger than others. I determined that 5% of their orders have more than 15 products in each order, which would be more efficiently handled with order based picking. I then suggested that they use order-based picking for the 5% of these orders, since this will increase the picking efficiency and productivity in their warehouse. It is difficult to pick larger orders in to small totes in a cluster pick trip.

Visiting less warehouse locations or bins per picking trip means that your picking process will be shorter, and therefore more efficient. Picking more items per warehouse location or bin means that you have aligned and batched your orders correctly, ensuring that most orders that have similar products are in the same batch.  Additionally, changing the way you pick your orders can save the number of locations/bins visited per trip, thus saving time and promoting efficiency. The customer loved using these two KPIs as a benchmark to measure their picking process — and now you know how to create your own, too!

 

 

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