Logistics activities in warehouses: what each means and what you get if you digitize them
Many managers and specialists in different economic fields are interested in the way in which they should organize a warehouse to make work more efficient and increase profitability. Here’s a look at the main logistics activities in warehouses and what you can achieve if you manage them automatically, using WMS software solutions.
The storage and delivery activities that need to be managed vary according to the size of the warehouse, the range and characteristics of the items stored, the type of owner and customer, etc. We will present, in general, the activities carried out in warehouses, with the note that not all of them can be found in every type of warehouse.
Receiving goods
The first step is to receive the goods from the suppliers (or from the production department in the case of a manufacturing company). Receiving involves the allocation of trucks to docks, planning and execution of unloading operations, followed by the quantitative and qualitative inspection of incoming goods.
Receiving goods into the warehouse is done on the basis of a Goods Receipt Note (GRN) and requires the preparation of places for the storage of each new batch of goods. After the GRN has been completed and signed for each load, the goods received are moved from the unloading area into the warehouse to the locations established for each item.
Cross Docking
Cross docking is a logistics process that allows the direct distribution of goods received from a supplier to an end customer or to another company (retail chain/store, etc.). In other words, received goods are no longer placed on racks/shelves, but delivered directly to customers without any intermediate storage in a warehouse.
Cross docking is used when there are already orders for some (or all) of the products received and longer-term storage is not necessary. Goods are moved either to an easily accessible area outside the warehouse, directly to the loading dock, or from one ‘inbound’ truck to another ‘outbound’ truck for immediate same-day delivery or for delivery within a fairly short period of time (a few days at the most) after receiving. This is done without unnecessarily tying up the existing workforce and without blocking up some of the available storage space in the short term.
And when you consider that storing such goods involves extra operations and costs, cross docking makes perfect logistical and economic sense.
Putaway
If cross docking is not always a necessary step, the next logistics activity, which goes by the specialised name of putaway, refers to moving the products from the receiving area and actually placing them on the shelves/racks.
For high efficiency in the subsequent work processes, shelf placement should be based on the rule of ABC classes. Placing the best-selling items in accessible areas and on accessible shelves/racks directly contributes to a much faster pace of the next activity, picking.
At the putaway stage, recording and maintaining an accurate record of where items are placed are also of great importance, as quick and correct identification of items during the subsequent picking process leads to a drastic reduction in returns.
Collection of goods for delivery (Picking)
The most complex warehouse logistics activity is picking – collecting stored goods for delivery of customer orders.
Picking is categorized as the activity that requires the largest part of the labour and material resources (machinery) in a warehouse, and it involves considerable physical and logistical effort compared to other activities. It marks the initial stage of order processing for delivery to customers.
There are a variety of picking methods, from which warehouse managers select those that best meet the requirements of the frequently received order profile.
Splitting and grouping by order
Checking refers to the comparison of picking lists with the products physically picked from the shelf (number and items) in order to identify possible discrepancies and correct errors that may have occurred before packing, and splitting is the activity of grouping items picked from the shelf/rack by order.
Checking may or may not be coupled with splitting, depending on the picking method used. For example, in the case of single order picking, splitting is not necessary, as orders are picked separately from the start. In the case of another method such as batch picking, checking is accompanied by splitting, as items of the same kind from several orders are collected in one trolley and require separation by order before packing.
Replenishment
Replenishment is the activity of “resupplying” the picking areas with goods. It involves the transfer of items from the area intended for the storage of “reserves” of goods to specially arranged picking areas in warehouses.
Replenishment is an internal activity that plays an important role in the picking process, as it ensures that the necessary stocks are available at all times for the order picking to proceed without delay. Therefore, continuous monitoring of available stocks both in picking locations and in “reserve” areas is essential to determine in advance when replenishment and new stocks are needed in the warehouse.
Packing
Packing refers to the activity of placing products already grouped on orders into separate boxes for delivery to customers. This stage involves selecting suitable packaging according to the volume (size, weight) of the products on the customer order to be delivered, as well as the actual packing and labelling of the packages (applying the customer’s address, etc.).
Value-Added Services
Value-added services generally refer to warehouse activities provided by 3PL providers for the benefit of their customers. An example is the creation of kits – sets of products that are generally sold as separate units. Such activities are occasioned, for example, by various seasonal promotions, or simply by the owners’ decision to temporarily bundle in sets several products that many customers often buy together.
Loading and delivery
Logistics activities in warehouses do not end when packing has been completed. Other warehouse operations include organizing deliveries to customers by allocating and scheduling trucks at loading docks, and the actual loading of parcels according to transport orders.
Reverse Logistics
Reverse logistics refers to the process of retrieving and bringing back to the warehouse delivered products that customers return because, for example, they have manufacturing defects or they are damaged or they are simply not what they ordered.
Picking is the activity that mainly generates the most frequent returns because errors at this stage and subsequent failure to check goods correctly before packing lead to the delivery of products that customers did not order.
Reverse logistics requires additional handling of the returned products in the warehouse and possibly the separation of products with manufacturing defects to be sent to the manufacturer or supplier. Therefore, rigorous picking and checking control is necessary to minimize the number of returns and the costs of transporting and subsequently storing returned products.
Stocktaking
Another important logistics activity in a warehouse is stocktaking. Inventory management involves the periodic (usually annual), partial or total stocktaking of available stocks, i.e. the actual counting of the items in the stocks in the warehouse at the time. Stocktaking is the moment when managers are clear about the stock situation.
Ideally, the available stocks should be known at all times, and this is possible thanks to the digitization of data flows related to warehouse work processes. However, the human factor cannot be completely taken out of the equation, and theft, although it can be drastically reduced by strict control through automation, is not eliminated, but the perpetrators can be identified much more easily.
How does xTrack WMS help you manage your warehouse logistics activities?
When we talk about digitalization in logistics, we mean the implementation of various specialized applications designed for the management of the supply chain components.
In the case of warehouses, the main software solution is the Warehouse Management System (WMS), which is used to manage warehouses and stocks. In addition, there are hardware components: handheld terminals, printers and other devices that make it possible to use new digital technologies. Technologies such as pick by voice, pick by light and RFID (radio-frequency identification), for example, allow paperless picking.
All the warehouse activities can be digitized by implementing the xTrack WMS solution, and the system’s flexibility ensures that all necessary data is collected. Centralization and automatic processing ensures traceability of goods and operations and accuracy of the data collected.
Moreover, using the application reduces order processing time and makes rational use of warehouse space, products are easily identified or inventoried, and work processes are synchronized and strictly controlled.
Automated warehouse management involves not only the management of storage spaces and goods, but also the coordination of human and material resources (their allocation to activities and work areas), including document management.
The xTrack WMS is flexible and easy to integrate with other TMS and POD (Proof of Delivery) applications to optimize routing in a warehouse network and vehicle loading, as well as real-time monitoring of deliveries to customers.
The present and future of warehouse logistics management is digital and mobile friendly. Axes Software meets the demands imposed by this trend and provides interested companies with various cloud-based logistics applications that ensure portability and efficiency.
Our specialists have created software applications for use in all types of warehouses, including the warehouses of online shops, being also dedicated to the specific needs of e-commerce companies.
We’re here, ready for any questions you may have about our solutions. Fill in the form below and we’ll get back to you.
