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How to create an Omnichannel-ready warehouse

19 February 2020

To a modern consumer, the experience of purchasing an item is frequently more important than the product itself. Therefore, consumers are increasingly demanding the convenience, flexibility and speed that omni-channel retailing offers them, in-turn, forcing retailers to respond.

Shifting to omni-channel is, however, a significant challenge to many businesses, requiring a fundamental redesign of their distribution activities and facilities. At the core of the problem, is the need to create a warehouse that is sophisticated enough to handle the far more complex challenges that omni-channel poses.

Creating fulfilment centre designs that support this strategy is no mean feat, but as warehouse solutions providers, is something we do daily. So in this special edition of H&SS, we’re sharing a five-step SEC guide to successfully creating an omni-channel-ready warehouse.

Step 1 - Map the Strategy

Warehouse design should be around your strategic requirements: not the other way around. Start by defining the service-level you wish to offer and then create a detailed process map for all incoming goods and distribution channels you plan to provide. During this process, identify potential challenges that you will need to overcome to achieve your desired service offering and don't forget about returns!

Step 2 - Embed Data

With the processes mapped, it's now essential to gain a more detailed understanding of the challenges the facility will face, by analysing operational data. In particular, establishing volumetric throughput, as well as picking activity-levels required, will be essential in guiding design. It may be useful at this point to segment your analysis into different channels, where there is a significant difference in how they behave, e.g. retail vs e-commerce.

Step 3 - Determine the Pick-Face/Bulk-Storage Strategy

Generally, 50% of the running costs of a warehouse, and a far higher percentage of the service-level it provides is related to picking activity. Therefore, identifying the correct pick-face and bulk-storage strategy is essential. 

Firstly, familiarise yourself with as many of the vast array of goods-to-picker and picker-to-goods systems available as possible. You'll ordinarily require at least three types of pick-faces: for slow, medium and fast-moving goods. However, in an omni-channel setting, it may be appropriate to introduce multiple pick-faces for the same SKU if one channel behaves differently to another (e.g. Pallet vs Unit-pick). Ultimately though, you need to balance space-utilisation and pick-face size, with the number (and method) of replenishments required, to optimise the ROI.

Step 4 - Internal Movements

Once the storage media has been decided, the next step is to map all movements of stock within the warehouse, selecting appropriate equipment and methodology to carry out the transfer. Mechanical-Handling-Equipment, conveyors or automation may be needed, but in all cases, the warehouse must be designed to handle peak periods. Remember, mechanisation, whilst powerful, also introduces capacity constraints that should be carefully considered.

Step 5 - Digital Strategy 

An omni-channel distribution-centre will be completely reliant on its IT-systems to be successful. You'll already need to have an appropriate order-management system, but integrating the warehouse systems with your processes is critical. 

Don’t let your Warehouse-Management-System (WMS) define your processes. Specify the system requirements in line with the first four steps, and then select a WMS that fits. Often, off-the-shelf products will not carry all the features you require, so consider implementing a bespoke Warehouse-Control-Program that plugs-in to another WMS to offer you required functionality.

Following these five steps will assist in making the transformation to omni-channel all the more smooth and ensure you efficiently manage and meet the growing expectations and demands of your consumers.

 
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