With so many retailers now branching into eCommerce, it is important to understand how the warehouse operations for each division, retail and eCommerce, differ. Retail warehouses generally handle bulk orders that are shipped to stores while eCommerce warehouses will see a lot of single- and multi-item orders.
Mothercare, a retail client of ours in the parent-and-baby products industry, have started moving into the eCommerce market and they recognised the need for a warehouse management system (WMS) that could handle their eCommerce operations and work alongside existing legacy software.
[Related: Mothercare takes Peoplevox to Asia]
Established retailers will often have a legacy WMS running their retail division and find it painful to run their eCommerce operations with the same software. One potential solution is to implement separate warehouse management software that is designed to handle the intricacies of eCommerce and that will work in harmony with your existing software. Many companies are operating like this, with their eCommerce warehouse setup as a ‘store’. The eCommerce platform’s back-end is then being used for order fulfilment.
With two WMSs running in your retail and eCommerce warehouses, however, the question of when these systems should communicate with each other must be considered. Ideally, the two systems should only need to have one touchpoint and that is concerning the inventory figures of the eCommerce warehouse.
Why is that the case?
In a retail warehouse, you have lots of pallets and boxes. In an eCommerce warehouse you will have lots of items stored in locations so that you can take one at a time instead of larger quantities for retail stores.
The inventory figures in your eCommerce warehouse should be live so that your website and marketplaces always list the correct figures for your customers. As a result, when a customer’s order comes through it goes directly to the eCommerce WMS and not via the retail WMS.
When the order is received, the eCommerce warehouse management system does a check for how much stock is available and how much stock is required to fulfil the order. If you have 10 party hats in your eCommerce warehouse but the order is for 20, this is the point where the retail WMS responds, recognising the need for a replenishment or transfer from the retail warehouse to the eCommerce warehouse.
For this to be efficient, the retail WMS needs to be pulling inventory figures from the eCommerce warehouse constantly, hence why this touchpoint is key.
If you don’t want your warehouse management systems to speak directly, you can have it so that the eCommerce WMS pushes its inventory figures into middleware which then creates the equivalent of an internal purchase order. Since the eCommerce warehouse is often considered a store in these situations, this request would come through as an inter-store transfer from your retail warehouse to your eCommerce warehouse.
In this case, this would not be a replenishment but rather receiving goods into the eCommerce warehouse and reconciled against as the items are scanned in.
Where things start to get really clever is introducing a level of predictive analysis to your warehouses. A common issue in the eCommerce warehouse is that operators are unable to pick an order because the replenishment has not been completed by the retail warehouse. The quicker this action is triggered, ie. as soon as the customer order comes into the eCommerce WMS, the faster it can be completed.
[Related: Data interpretation and segmentation]
Author: Jess Lawrence
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