E-commerce Distribution Logistics

E-commerce, as a new way of doing business, is increasingly gaining weight, requiring companies to reconsider warehouse design and operations from a different perspective to adapt to this new trading habit. Meeting e-commerce orders with high performance is a complex task, and doing so cost-effectively is vital. Dijitalis ensures that all your warehouse processes, from product receipt to shelving, picking, packing, and shipping, are e-commerce compatible. In this process, the most accurate answers are found to the following questions:

  • Should e-commerce operations at the distribution center be managed in a separate area from existing operations, or should all activities be carried out in the same areas?
  • Should e-commerce orders be managed with existing processes? Should existing processes be improved for all general activities, or should separate processes be designed specifically for e-commerce?
  • How should inventory management be done for which products? Which products should be stocked in the warehouse, which ones are suitable for cross-shipping, and which ones should be sent directly from the supplier to the customer?
  • What should be done to improve picking speed and handling times?
  • What should be the rules for handling single-item and multiple-item orders? Should orders be picked based on product group, package, or shipping type? How can it be ensured that multiple-item orders are picked, packed, and shipped most efficiently?

And many similar questions need to be answered with precision for an effective e-commerce operation.

Shortening the time from order to delivery!

The biggest expectation of e-commerce customers is to have the product immediately. Regardless of the design of your e-commerce warehouse and automation technologies, if you are not close to the customer, it will be difficult for you to have a competitive advantage. Before deciding on investments to make your existing warehouses e-commerce compatible, it is crucial to review and optimize your distribution network. Remember that the primary task of your warehouse is to bring products closer to the e-commerce customer.

Slotting: Importance of product-shelf assignments

Especially in distribution centers with same-day shipment goals, it is essential that product-stock address assignments are made optimally to increase picking speed. For sustainable allocations that maximize picking efficiency, product feeds to each address must be made on time. If this strategy is implemented, order picking times decrease, service levels improve, and labor is used more efficiently. These optimization efforts should be repeated at regular intervals. The frequency of repetition will be proportional to the seasonality of products in the distribution center, demand fluctuations, and product lifespan.

Through sophisticated optimization algorithms, Dijitalis calculates product-shelf assignments that will shorten picking routes and times, and places heavy products at the beginning and lighter ones at the end to reduce the risk of damage. Factors such as the proximity of jointly ordered products, which can cause picking errors, to each other and the placement of similar products far from each other must also be considered in this process. The benefits observed in Dijitalis' similar projects include:

  • Increased picker efficiency and labor balancing,
  • Reduction in labor for feeding products to shelves,
  • Reduction in picking errors and handling damages.

Capacity Planning

The increasing preference for e-commerce by consumers has significantly increased the activities in the areas of order picking, packing, and shipping, especially. While in the past, a pallet of products was sent to a retailer, now numerous single and partial packages are sent to many customers. Distribution centers must simultaneously conduct traditional operations and e-commerce activities in the same areas. Some online activities require value-added services (VAS). VAS operations may include activities such as special labeling, gift packaging, combining different products for promotional purposes. All of these require more ergonomic line designs in workspaces. Boxes must be quickly opened, order quantities must be taken and checked, and repackaging must be done. A similar activity intensity can also be seen in reverse logistics. The return rate can be up to 50% in e-commerce, and it needs to be managed just as efficiently.

Dijitalis creates a digital twin of your distribution center using sophisticated simulation models. In this model, layout design, standard times, and time studies, product and address locations are found exactly as in real life. By simulating all activities based on the estimated demand, peak times and situations affecting the distribution center, activities that bottleneck the distribution center are identified in advance. Accordingly, the required staffing and temporary staffing planning can be done in advance.

Material Handling and Automation Systems

The e-commerce operations in a distribution center are characterized by a large number of products, low inventory, and many small orders. As the volume of operations increases, the need for automatic handling systems increases, and the return on investment of these investments becomes more attractive. Examples of these systems include:

  • High-density storage racks and narrow aisle equipment,
  • Workstations that offer better ergonomics and shorter handling times,
  • Systems for bringing products to operators,
  • Automatic sorter systems for inbound and outbound operations,
  • Automatic packaging systems,
  • AGVs and robotic systems.

If you want to make your warehouse competent for e-commerce operations, after a certain point, you will encounter complex investment decisions that will have millions of lira impact. Getting design and simulation services from a single expert firm with expertise in supply chain and logistics, method engineering, and automation ensures that the process is organized and completed efficiently. Having completed numerous material handling projects, Dijitalis supports you in completing your project on time and below budget. With this experience, you ensure that the operational benefit of the automation system is always the top priority and that other design tasks are integrated into the main priority.

Warehouse Management Systems and IT Needs

Meeting e-commerce orders requires new terminal interfaces and new functions beyond the capabilities of a standard WMS. An e-commerce warehouse management system must store additional data such as customer delivery addresses, special customer requests (type of gift package, text to be written on the gift card, etc.), and communicate them with the carrier's system for traceability. E-commerce process steps should be modeled to manage warehouse operators, and inventory feeding and picking orders should be derived and published according to these steps.

Dijitalis evaluates your existing WMS software against over 600 criteria, identifies the deficiencies that need to be closed and the points that need to be improved for you to manage your operations with high efficiency. Upon your request, the process continues with the writing of a WMS requirement document and the selection of the correct supplier.

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