Warehouse Optimization in Action: Let’s imagine a customer orders a laptop table from a retailer via an eCommerce platform, which hosts the retailer’s products. The order is delivered in a day, but the customer receives a damaged piece and requests an exchange, promised to be done in four days. However, when the customer gets an update after two days, the parcel will be delayed further; he connects with customer care. Within seconds, the executive informs him that delivery is delayed since the other piece is damaged. This scenario, which could have led to a dissatisfied customer, is averted with warehouse optimization at the retailer’s 3PL service provider. With a well-optimized warehouse, the customer is not only informed about the situation but also feels privileged and not cheated due to the transparency in the system.

Implementing a Warehouse Management System (WMS) and leveraging real-time information sharing with all stakeholders is not just about improving the order fulfillment process. It’s about enhancing customer relationships. By increasing customer loyalty and transparency in the order fulfillment process, the WMS technology significantly makes customers feel more informed and valued. This, in turn, underlines the crucial role of WMS in operations and its direct impact on a business’s success.

Supply chain integration takes eCommerce to the next level, ensuring end-to-end connectivity in operations management. But it’s not just about that. Lean warehouse design is an added advantage, reducing the time required to locate inventory and share information. This resultant workflow optimization enhances 3PL efficiency, as the entire system is streamlined, and there’s inventory accuracy. Hence, 3PL businesses should consider warehouse ergonomics to gain a competitive edge. This can bring significant results and set the business apart, highlighting the potential benefits for the business.

How to Improve 3PL Efficiency?

The major challenge for a 3PL service provider is managing space; they often find themselves overloaded and struggling to adjust. The work of the warehouse is to receive, provide storage, pick and pack, ship, and manage space for returns and exchanges. A well-layout warehouse makes the process easy and improves productivity and efficiency. They address three essential features of 3PL—

• Streamline operations,
• Enhance productivity, and
• Reduce operational costs

Optimizing Warehouse Layout for 3PL Efficiency

A well-planned warehouse can increase profit margin; it adds to security and improves inventory accuracy. Some of the best storage solutions for designing efficient warehouse spaces that minimize travel time and improve order fulfillment speed are—

• Purpose of Warehouse Layout—It is vital to consider the need and purpose of a warehouse and how it benefits the business. Layout design should comply with those purposes.
• Inventory Flow—Inventory management provides data about product flow, that is, the volume, type, and reason for the product flow. It also shares information related to peak demand periods. Based on this information, warehouse layout can be designed for quick access to inventory as and when required without wasting time.
• Slotting—Grouping items of a similar kind reduces travel time, brings more efficiency in picking products without any chance of errors or wasting time in searching for the product’s location, and increases accuracy in the accomplishment of work.
• Vertical Space Utilization—Items can be stored vertically when there is not much floor space. With automation and IoT sensors, items can be located even when vertically stacked. This maximizes space utilization and enhances 3PL efficiency.
• Automation in Warehousing—Automated warehouse technology, such as robots, AR, and VR, can change the working landscape of a warehouse. Repetitive and manual tasks can be assigned to them. If a warehouse uses robots, space should be designed so that they have space to move around and can be maneuvered.
• SKU Organization—SKUs with high demand can be located in an area from where they are convenient to pick and pack, and those with low demand can be placed at the remotest corner. This again reduces travel time and increases the efficiency of 3PL service providers. Space utilization is amplified.
• RFID Technology—Sensors allow tracking and tracing of items in warehouses. This also optimizes inventory management. The technology speeds up the work of locating items; even in less space, products can be stacked and stored on neat, recognizable shelves.
• Pick and Pack Strategy—This strategy promotes picking, packing, and directly taking into shipping cartons without holding them for scanning or completing other formalities. The items are directly scanned and shipped out. This saves time and space.
• Cross-docking Logistics—It is the finest methodology for warehouse space optimization. A logistics technique that accelerates the order fulfillment process. In cross-docking, goods unloaded from vehicles are directly uploaded to vehicles that will take them to the next destination. There is no hold time, so it requires no storage space. It is an automated process, and RFID technology helps efficiently carry out the cross-docking logistics by continuously monitoring the items.