How best to use a small urban warehouse for eCommerce

Always one to start a trend, Amazon began making use of small urban warehouse in London back in 2013, but they recently introduced the idea over in the US earlier this year. The logic behind taking on these smaller warehouses situated closer to towns than the traditional large distribution centres is to give eCommerce companies like Amazon the capability of fulfiling orders for one-hour or same-day delivery. Utilised well, these small urban warehouses could be the start of a major trend in eCommerce, and several companies will likely start leaping at the available real estate in urban areas.

But how can you get the best use out of such a warehouse? Well, first you'll have to take into consideration these key points:

1. Space

It's in the name: small urban warehouses. You're not going to have 400k square feet of space in which to store many thousands of stock keeping units (SKUs). Space is suddenly going to become your worst enemy as you figure out what items you'd like to store there compared to how much you can actually fit on the shelves. Doing everything you can to save warehouse space is going to have to be top of your list if you're considering snapping up a small urban warehouse for your eCommerce operations.

2. Multiple warehouse management

If you're using a warehouse management system (WMS) for your eCommerce operations then you're going to have to ensure that it can handle the fulfilment of orders from and between multiple locations.

3. Cross-docking

For those unfamiliar with the term, cross-docking refers to the process of assigning items to an order as soon as they are reconciled at Goods In. The only way you're going to successfully fulfil orders for same-day delivery in urban warehousing is to have a WMS that can identify which items are required for an order immediately. Not only will this speed up your process, it will also mean you don't waste space putting an item away that is later going to be picked - essential for a small warehouse and working to tight deadlines.

4. picking to deadline

1-hour delivery (like Amazon have just launched in Central London) allows for an average of 5-15 minutes for an order to be picked, packed and despatched, depending on how far from the urban warehouse the final destination is. Being able to dynamically sort and prioritise orders to meet daily challenges is essential, and only the most suitable warehouse management software will be capable of doing this.

[Related: 12 smart ways to sort your eCommerce warehouse orders]

5. Innovative carrier options

Delivery in urban areas is already seeing a disruption with services like Deliveroo, Collect+, and Doddle redefining how your order travels that last mile to your hands. It is necessary to not only be aware of these services but to integrate with them if you wish to cope with the struggles of on-demand delivery.

6. Temporary setup

The unique thing about eCommerce warehouses is that their workforce flexes up and down to meet the variances in demand. Small urban warehouses are likely to follow this same trend and will extend to being temporary fulfilment units designed to handle specific package types or products through peak. To cater for this, the warehouse management system used will need to be implemented quickly, and requiring as little technical knowledge as possible. As such, a web-based software-as-a-service system is likely to be the preferred choice for such urban warehouses.

7. The right level of automation

It's all well and good for Amazon to roll out heavy automation in their larger distribution centres but smaller urban warehouses for eCommerce need to remain flexible for whatever the demand may require. You don't want to put a very sophisticated, heavily-automated warehouse management process into your urban warehouse only for demand to dry up temporarily, leaving your techies with nothing to do. Likewise, you don't want a system that is fantastic at one picking method but unable to adapt to another method that would better suit the demand of the day.

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