As expected, the 2019 holiday season shattered previous sales marks, ushering in nearly $720.3 billion, of which $9.4 billion came solely from Cyber Monday shopping through distribution giants such as Amazon and Walmart. While it will still take time to calculate the precise number of holiday profits, businesses nationwide must also be aware of the potential loss. Although peak season brings in a welcome surplus in profits, it also highlights previously overlooked inefficiencies in the warehouse.
Although there are still 322 days till the next holiday season, automation experts at the Numina Group are already at work to resolve common warehousing issues that could drain your peak season profitability. By deploying leaner processes managed our industry-leading real-time distribution software and warehouse control systems we equip warehouses and distribution centers (DC’s) nationwide with better operational efficiency that streamlines order volume, empowering you to confidently handle volume growth in and out of peak season.
Seven Deadly Warehousing Pitfalls
Whether it be inaccurate order fulfillment or wasted labor efforts, inefficient warehousing can cost as much as $100,000 per hour in downtime, $20 per mis-shipped package, and a lost client loyalty. While every warehouse faces unique challenges, there are a few warehousing issues that seem to resonate with multiple facilities year after year, such as:
- Too much inventory — To avoid costly out-of-stocks during the busiest day of the year, many companies choose to overstock to keep up with surprise demands. However, a lack of an organized inventory management system can lead to overcrowding, creating confusing pick paths, wasted space, lost products, and small packing spaces. These ultimately contribute to elevated worker stress and missed/inaccurate orders.
- Unforgiving drop shipping — When shipping on behalf of other businesses such as Amazon or Walmart, shipping rules must be closely followed lest they turn your business away. Errors such as missed delivery dates or wrong shipping labels can lead to millions of lost revenue as companies may reject you and favor your competitors.
- High seasonal labor costs — Seasonal warehouse salaries average near $11 per hour, yet this does not account for training times, which may take longer than expected if other inefficiencies are present. Furthermore, as expected with the holidays, seasonal labor costs also include overtime, weekend pay, and holiday pay.
- Missed delivery dates — Labor shortage and lack of inventory transparency result in missed delivery dates as your workforce encounters more obstacles to pick, pack, and ship orders. Simply put, a smaller inexperienced workforce cannot handle high order volumes normally attributed with peak season.
- Inadequate picking routes — Longer traveling routes and manual data entry both lead to more inaccurate orders, which drive up costs with return fees.
- Missing paperwork — Every part of your warehouse operation is important, down to the smallest labels. Wrongly printed or illegible labels can greatly impact your workflow since crucial product information -like shipping address or storage instructions- are no longer available. Wrongly printed labels can lead the right package into the wrong hands, creating a nightmare scenario for your customer service team.
- Overwhelmed delivery services — In 2018, the United States Postal Service delivered nearly 900 million packages during the holiday season alone. Because every year brings an overwhelming increase in shipped order, it is important to stay ahead of mailing dates stipulated by your courier service and avoid last-minute shipping at all costs.
If any of these problems sound painfully familiar, do not hesitate to contact our warehousing specialists for an in-depth optimization plan for your current warehouse operations. Be sure to join us here again next week as we uncover how the Numina Group implements specific solutions to address the problems discussed today and how superior processes enforced with the right software and latest technologies drive higher business efficiency and profitability.