As customer demand increases, businesses need to offer faster and more accurate order fulfillment. However, a weak and unorganized inbounding and putaway system can delay fulfilling promises.
Efficient warehouse management is critical to a stable supply chain for your e-commerce business. Inaccuracies during inbounding or putaway can cost businesses time, hurt profits, and result in lost customers.
The Impact of Errors in Warehousing Operations
It is no secret that mistakes in warehouse operations can impact the e-commerce fulfillment experience. To optimize operations, it is worth exploring to what extent these mistakes affect your inventory storage, picking, packing, and shipping operations.
Improper or hastily planned inbounding processes can affect inventory management and e-commerce sales through:
- Incorrect documentation, miscounted quantity when you receive an incoming shipment
- Misplaced inventory within the warehouse, either in places outside the designated warehouse space or in quarantine areas
- Discrepancies in the recorded inventory resulting in out-of-stock situations despite having sufficient at hand
- Picking errors that arise due to incorrect labelling or batch information
- Increase in returns due to inaccurate product labeling, description and picking processes
The Hidden Cost of Warehousing Errors in E-commerce
Not having an ideal plan of action can impact processes in warehousing, inventory storage, picking and packing, and order fulfillment. As an online retailer, your brand’s credibility lies in your account’s health score, which is tied to the terms of your service level agreements. Not fulfilling orders on time wouldn’t just cost your business; it would also hurt your profit margin, your store’s visibility on the platform, and consequently, the number of orders you may receive.
Order Mix-ups due to Labeling Errors
Poor labeling affects the pick-and-pack process of your inventory. Warehouse executives may end up choosing products of different make, sizes, and colors. The average cost of picking the wrong item can be between $20 and a staggering $60 and can reduce your profitability by almost 13%.
Customers can grow dissatisfied with a brand when they do not receive the orders they want. This can prompt two actions: They either raise a return or leave a review that could hurt your business. While processing returns could help you diffuse the situation, it also becomes costly. A 2023 report mentions that for every $1 billion in sales, the average retailer incurs $145 million in merchandise returns.
Delayed Dispatch and Order Fulfillment
The average number of days that consumers are ready to wait for their orders fell from 2.36 days in 2022 to 2.15 days in 2023. Nearly 69% of shoppers are less likely to shop with a retailer in the future if an item they purchased isn’t delivered within two days of the date promised. For brands that offer expedited shipments like same-day fulfillment and next-day delivery, increasing efficiency can help warehouse executives pick and pack orders way before the designated cut-off times. For this to work, planning out the inbounding and putaway can help reduce bottlenecks during pick and pack.
Managing Leaner Stock and Faster Supply
In 2023, the total prime warehousing property costs grew by 10.1% compared across 52 global markets. The costs included rent for warehousing, service charges, and taxes, making it challenging for e-commerce brands to store large batches of inventory. E-commerce brands have begun transitioning to a framework that involves leaner stock and flexible infrastructure to decentralize inventory, leading to faster fulfillment. Switching to a more scalable model helps e-commerce brands offset costly overheads, but it also involves meticulous planning, coordination, and timely replenishment of stocks for a healthy supply chain.
As brands rely on optimizing their business operations, inaccuracies occurring in the warehousing operations can hurt sales revenue and end with dissatisfied customers choosing to shop with competitors. In 2023, inventory distortion cost retailers $1.8 trillion. Poor visibility into inventory levels may affect your restocking and replenishment timelines. Nearly 34% of retail businesses shipped an order late because they sold an out-of-stock product unintentionally. That’s why your order management system must be in sync with your warehouse and sales channels for consistent dispatch and fulfillment. With Locad, your business gains a 3PL that offers a powerful cloud-run control tower, giving you real-time visibility into inventory to plan out inbounding and improve operational efficiency.
Improve Warehousing Efficiency with Locad’s Order Management System
E-commerce brands can no longer look at banking on one marketplace or storing inventory at one warehouse. To expand brand reach and maximize sales opportunities, having online stores across multiple marketplaces matters. Distributing inventory across multiple warehouses offers nationwide coverage for your brand and facilitates swift order fulfillment.
With Locad, you no longer have to manage different marketplaces and warehouses with a number of tools or platforms. Here’s how:
Alert Warehouses with Advanced Shipping Notices
Raise Advanced Shipping Notices in Locad’s warehouse to alert your warehouse executives to prepare for any incoming inventory. This will give them the time and heads-up to inbound stock and organize the putaway process efficiently. This helps your warehouse operations executives prepare ahead of time on best practices for processing stock and updating inventory.
Adding Value Added Service Request with ASN
The Locad control tower lets you add more specificity while creating an ASN. Business owners can also specify any value-added services, like labeling, sorting, kitting, and more, for the consignment with a single click while raising the ASN. This lets warehouse executives prep an incoming consignment to simplify and speed up the picking and packing process.
Timely Inventory Replenishment
Unify your inventory levels across different warehouses and marketplaces in one single dashboard. With Locad’s smart out-of-stock indicator, receive notifications that tell you warehouses that are running out of inventory. Proactively work with suppliers to ship a new batch of inventory and avoid any stockouts.
Improve Inventory Dispatch through Expiry Management
Locad lets you customize your dispatch instructions through expiry management. This ensures that inventory within a sellable threshold is dispatched to prevent expired products from being shipped to your customers. It also ensures that the warehouse executives pick the older inventory with considerable shelf life first and then move on to the newer batch of inventory.
Prioritizing Ad-hoc Inbounding
Sometimes, businesses may have to schedule ad-hoc inventory replenishment drives and may require immediate assistance from warehouse executives. Locad lets brands coordinate with the destination warehouse by prioritizing such request without having to wait for customer success teams to intervene. These ad-hoc inbounding requests may carry shorter lead times but will furnish all the necessary information they need to successfully prepare to receive the inventory, process it and record it in a timely manner.
Streamlining Warehousing, Logistics and Fulfillment with Locad
A 3PL like Locad gives your brand flexible infrastructure and a powerful logistics engine to pick, pack, ship and track your e-commerce orders. While warehousing traditionally encompasses human operations, having a powerful OMS can help you increase the efficiency of different warehousing operations. You not only gain a single source of truth about your inventory levels, but the Locad OMS also lets you streamline operations from receiving, processing, and inbounding inventory. It helps your business adapt to changing demands and business requirements seamlessly without disrupting your operations.
