How to Design an Efficient eCommerce Warehouse Layout

eCommerce warehouse layout

Order speed and accuracy have an influence on customer satisfaction and determine the business’ bottom line. This means efficiency in storage and putaway needs to be ensured and has a positive effect on how much space you need to rent, insure, and maintain.

But if your eCommerce warehouse layout was not initially set up properly, everything above can end badly.

With the rise of omnichannel, even setting up a productive eCommerce warehouse and fulfillment center is becoming much more difficult. If you expect your business to run more efficiently, some planning is needed.

That’s why we’re here to help you identify the critical steps to design an efficient eCommerce warehouse layout, maximizing your productivity and profits.

What is eCommerce warehousing?

Ecommerce warehousing can be defined as the process of storing physical products that will be sold online.

eCommerce warehousing
eCommerce warehousing

eCommerce warehousing, however, is more than just a way of storing your inventory.

It also involves keeping track of the availability of your whole store’s inventory, tracking the movement of the commodities, and ensuring that they are stored in a safe and secure environment.

It’s important to note before moving on that the eCommerce warehouse layout should be taken into account at all levels of eCommerce management, not just in the beginning.

It makes sense and is typical for a company’s processing and storage area to expand as demand increases. Implement an effective warehouse setup by making some adjustments to ensure that you make the most of all your resources.

Ultimately, designing a warehouse plan should become an integral part of your daily eCommerce operations.

Why is a warehouse layout plan important?

For any eCommerce retailer, warehousing is an essential part of your business.

The warehouse design is crucial to the success of your company since it will help you enhance traffic flow, which will reduce inventory losses and boost warehouse efficiency.

eCommerce warehouse layout
eCommerce warehouse layout

The best way to organize the available inventory and internal systems should be represented by an effective plan for an eCommerce warehouse layout.

The warehouse layout design essentially serves as a visual picture of the warehouse, including all of its many locations and the operations performed in each of them.

In order to quickly determine the optimal supply chain strategies, the eCommerce warehouse layout will provide you with a thorough overview of the whole warehouse.

As an accurate depiction of the warehouse can be used to improve quickly processes as well as storage capacity, a warehouse plan is one of the most effective tools for designing warehouse layouts.

How to create an efficient eCommerce warehouse layout

What to consider before setting up an eCommerce warehouse layout

Whether you are setting up a big eCommerce warehouse or a small warehouse layout, planning is key. However, given the high standards and demands placed on eCommerce customer service, the successful deployment of well-thought-out workflows, tools, and procedures will be essential.

First, make a priority list of the operation’s most key parts. The fundamentals should include how much inventory and commodities you want to sell, how often, and what you’ll need in your warehouse—equipment, space, staff, etc.—to handle those things.

Once the fundamentals are established, you should focus on providing information that is more unique to your facilities and goods. For instance:

  • What products are you selling?
  • Exists a range of SKUs?
  • Is your inventory perishable or date-sensitive?
  • Do they require protection?
  • Do you have a high-value stock? (Is further security necessary?)
  • Do you have seasonal inventory? (Do you have to, or at least have the choice to, alter your warehouse layout periodically during the year?)

By thoroughly considering these issues up front, you can be sure that you are set up to provide the best possible customer service and to be the most efficient in your business right away, using the greatest tools and procedures for the job.

10 Steps For Setting Up an eCommerce Warehouse

Now you’ve got some considerations. Let us share with you 10 steps on how to set up a warehouse.

Find the ideal warehouse management system

Manual warehouse optimization is an option. But it’s one thing for a warehouse to maintain its spreadsheets, papers, and other outdated practices.

But what about building a new warehouse? There is no reason not to utilize a cutting-edge warehouse management system to free up your valuable time.

warehouse management system
warehouse management system

Additionally, it can tell you everything you need to know about your warehouse and the projected stock increase, freeing up your time to focus on more important tasks.

Optimize warehouse layout and storage

The process of choosing the best storage place for each item in your inventory is known as warehouse slotting.

Slotting optimization makes it possible for warehouse employees to pick orders more quickly, which facilitates next-day or even same-day shipment, a great choice in eCommerce.

Making the most of your warehouse storage space is another benefit of this style of eCommerce warehouse layout.

Make a list of all the equipment your warehouse needs

Depending on your commodities, your size, and your business model, warehouse equipment is either necessary or not.

Despite this, the majority of eCommerce warehouses and fulfillment centers share the same fundamental objectives: maximize available space, streamline the flow of goods efficiently, boost visibility, and do all of these tasks in a way that is secure for both employees and your products.

how to set up a warehouse
warehouse equipment

This brings us, depending on warehouse functions, to four fundamental types of warehouse equipment:

  • Storage equipment. Everything from big warehouse shelves and racks to little drawers and bins is considered storage equipment.
  • Material handling equipment. Transport, storage, unit load, and positioning equipment all fall under the broad topic of material handling equipment.
  • Shipping and packing equipment. This contains everything required to put together, package, and label orders in order to get them ready for shipping.
  • Inventory management software. These devices warrant their own category in the contemporary warehouse. Inevitably, barcode equipment also comprises printers, readers, labels, and any necessary eCommerce software.

Make a list of the items you expect to require under each heading. Next, include in your plan the locations where these items of equipment will be set up, put to use, or stored.

Automate tasks

Efficiency can be raised with certainty by using automation.

warehouse automation
warehouse automation

It makes sense to keep the process of picking products and shipping as efficient as possible given that eCommerce has already improved the browsing and purchasing processes considerably more effectively through automation.

The good news is that automating your warehouse doesn’t have to involve a major overhaul. In general, the most effective automation focuses on modest expenditures in machines that do a specific activity.

Barcode scanners can increase accuracy while streamlining picking and doing away with cycle counts.

Conveyor belts can reliably move heavy containers from one location to another, removing the need for people to transport stock and reducing workload. Lift trucks and pallet jacks, on the other hand, can complete tasks swiftly, efficiently, and safely.

A laser DIM-weight scanner can quickly and accurately compute the dimensions of packages, increasing shipping efficiency.

These devices as well as many others feature a break-even threshold that happens quickly rather than gradually over time. Therefore, investing in this kind of technology in pieces from the start might gradually increase the rate of interest.

Better traffic flows and picks paths

Optimizing the flow and pick paths in your warehouse might have seemed trivial, but it has a significant impact on productivity.

First off, it’s much more convenient for workers to perform manual picking.  Not mention to, if the pick route is effective and makes sense, things are less likely to be knocked off shelves, dropped, or damaged.

traffic flows and picks paths
traffic flows and picks paths

And there is safety. Fire danger and safety should be taken into consideration when planning the layout of your warehouse. For example, make sure manual pickers do not need to pass by forklifts and cherry pickers.

The workflow will include signage, arrows, one-way systems, and other techniques to lessen bottlenecking and be reflective of the products to be picked as well as the path they take from picking to packaging and loading.

It is essential to map this out prior to any items being loaded onto racks or placed in storage; doing so would take a lot of time and be wasteful.

Train your employees

Training your staff with the critical skills they’ll need to operate fast and effectively throughout training goes beyond simply teaching knowledge. Training expenses will eventually pay for themselves through increased productivity, efficiency, reduced errors, and a safer working environment.

Besides, you can avoid being caught short-staffed or overstaffed by optimizing your workforce and using analytics to foresee seasonal swings.

Integrate the systems in your eCommerce warehouse

Data sharing and transfer are made simple through integration in a business network, which significantly influences cost reduction and mistakes and hence greatly boosts efficiency.

The following systems should be turned on to complete the integration:

  • Systems arrangement
  • Accounting systems
  • Shopping cart software

Set KPIs and data-gathering procedures for your warehouse

The perfect warehouse metrics and KPIs will assist in identifying bottlenecks, mapping out warehouse operations, as well as gauge overall customer happiness. This is a wonderful signal for optimization.

warehouse metrics and KPIs
warehouse metrics and KPIs

For the best warehouse management, there are numerous KPIs to take into account, and a quality warehouse management system should be able to collect all of them quickly.

You can start with these four key warehouse KPIs:

  • Inventory turnover is the frequency with which you exhaust all of your stock (or a given stock quantity).
  • Order lead time is the total amount of time required for picking, packing, and shipping an order.
  • Transportation cost per package is the total cost of moving a single item lot (SKU) or order, including the cost of labor, handling supplies, equipment, and so on. The significance of an effective warehouse layout with a solid pick path is made clear by this measure.
  • The rate of return is the frequency with which products are returned. The reasons for returns should be noted by customer service as well because they can be used to identify potential problem areas such as receiving, picking, quality control, and other aspects.

Make your reverse logistics process more effective

Many businesses showed little interest in streamlining their reverse logistics procedure before, which made it challenging for them to handle returns effectively and economically in the current eCommerce era.

Giving customers a hassle-free return experience is now essential to gaining their loyalty. It is crucial to streamline the reverse logistics process as a result.

Keep up your technological savvy

What functioned a few years ago may not be ideal today due to new goods, technologies, and business strategies.

smart warehouse technologies
smart warehouse technologies

It is a serious error to not only fall behind your target audience but also to foresee their needs and make proactive adjustments in response.

The ability to adapt to abrupt changes in demand and interact with new technologies as they emerge to optimize your workflow requires a flexible warehouse management system that can combine and offer alternatives for future solutions like machine learning and automation.

The Bottom Line

In a nutshell, the eCommerce warehouse layout is a highly important aspect of the supply chain.

If the eCommerce warehouse layout is ineffective or does not produce the best results, it will have a serious impact on your warehouse production. For example, it will result in workflow bottlenecks, double work on processes, an increase in the number of workers, process miscommunication, a need for more space, a decline in safety, and other issues.

As a result, when planning the warehouse, you should take great care.

It’s time to put the steps above into practice and cut your logistics errors and costs to the absolute lowest.

If you have any other suggestions for setting up a warehouse, please let us know in the comments section below.

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