The Ultimate guide to Warehouse management

THE ULTIMATE GUIDE TO
WAREHOUSE
MANAGEMENT
Get expert advice on:
• Logistics as a competitive advantage
• How to reduce warehousing costs
• Shipping KPIs you must know
• Healthy warehouse routines
• Warehouse optimization
• In- and outsourcing
• Delivery excellence
• How to save time
and much more...

7 TIPS:
How to optimize your warehouse
Use these tips to optimize your warehouse and save hours as well as offer your
customers a faster and more accurate delivery. You can use the 7 tips again and
again to ensure that your warehouse is always optimized for your customers’,
employees’ and the future’s requirements.
1.
2.
3.
4.
5.
6.
7.
Use the space in the warehouse wisely
Take advantage of the height of the warehouse by installing a
mezzanine or take advantage of floor areas by using mobile
shelving in order to fit more items on the same surface.
Clean up your product range
Do not let items that you cannot sell, occupy the space in the warehouse
for other more popular items. Goods must always be shortest
possible time at the warehouse, so you do not lose money.
Know your goods
Place the goods in the warehouse in relation to whether they
are high or low frequency goods.
Pick orders faster
Pick several orders at once (batch picking) and organize the warehouse,
so the employee does not have to walk long distances.
Check your goods
Keep track of loss, expiration date, manufacturing defects and
returns through routines and custom software solutions.
Prioritize good ergonomic working postures
High tables, assembly lines and changing working postures help
to reduce sickness absence among warehouse employees and
increase productivity.
Make your warehouse processes scalable
With a scalable logistics solution, you can easily up- and downgrade
in relation to high and low season. You do not need to invest in
expensive and oversized logistics solutions, if you do not need it.
Sindre Landevåg, CEO
Get Inspired
”
A larger warehouse, new WMS and Delivery
Management software and more racks, plastic
boxes and picking carts create better working
conditions for our warehouse employees, and
makes our logistics scalable and foreseeable
as well as enables us to offer our customers a
faster and more accurate delivery.
Do you want to learn more about Get Inspired’s
successful warehouse management?
Click here!
80% of the world’s warehouses
are managed without any
automated systems or robot
technology at all.
Source: Universe of Delivery

INSOURCING VS.
OUTSOURCING
Get the experts’ advice here...
Strategy
When you outsource your warehouse, you also outsource logistics
competencies instead of building them yourself. If you have good
logistics at the warehouse, favorable carrier agreements and a desire
to actively use logistics as your competitive advantage, you write
off this possibility to affect how you work with logistics as a competitive
factor, if you outsource your warehouse to a 3PL player.
Benefits:
Build logistics competencies in-house and directly affect how you
make logistics work as a competitive advantage for your business.
When should you insource your warehouse?
What factors should you consider if you want to run your warehouse yourself
rather than outsourcing? And what are the benefits of insourcing your warehouse?
Steffen Larvoll gives you the answer here.
First of all, it is vital that you pre-calculate the costs and include your business strategy
and future, before you decide whether to in- or outsource your warehouse.
This decision-process can be split into three areas.
Practicalities
An insourced warehouse is practical if you want the possibility to:
• Check inventory
• Process orders
• Adjust orders
• Change deliveries
• Offer pick-up of online orders
Benefits:
You are able to offer a more flexible delivery as well as several
delivery options. This increases customer satisfaction. Insourcing is
also beneficial, if your product range is constantly changing, as you
do not have to coordinate the changes with an external 3PL player.
Economy
Calculate the costs of running your own warehouse, and compare
these with the price of a 3PL player.
Start-up costs: premises, equipment, trucks,
packaging, WMS and EDI systems and staffing
Daily operation costs: wages, power consumption,
repairs and software licenses
Buffer costs: new inventory, seasonal variations
and unpredictable costs
Benefits:
The costs of insourcing may seem heavy at startup, but in return
you have full control, and you are able to reduce costs through
warehouse optimization. 3PL players have a fixed price, which you
cannot control. If you just can do it marginally cheaper than a 3PL
player, this is of great importance in the long term.
Steffen Larvoll, Market Manager
Lager- og Industrisystemer
”
The e-commerce industry is an industry where
insourcing can be beneficial. E-commerce is volatile
with rapidly changing trends and rigorous
demands from online consumers on flexible
delivery.
E-tailers must be dynamic and adaptable, and
here insourcing of the warehouse can be particularly
beneficial.

In average companies use
2.8 different carriers
for their shipments
Source: Consignor
RFID technology
is increasingly used to
identify and track shipments
Source: Consignor
When should you outsource your warehouse?
What are the benefits of outsourcing your warehouse? And when should
you consider outsourcing rather than run your warehouse yourself? Fredrik
Krysén from Aditro Logistics gives you the answer here.
The biggest advantage of an outsourced warehouse is that it allows for companies
to focus on their core business in a greater degree, because they do not have to
spend time managing warehouse and transport.
The main financial benefits of outsourcing are:
• Lower costs thanks to economies of scale in warehouse and transport
• More efficient logistics processes
• Reduced capital tie
• Reducing the administrative burden
Outsourcing is a good idea, if you...
...consider new markets or products.
New markets, products or just seasonal fluctuations are easier to
manage through a third party who handles the storage and transport
of your goods.
Benefit: Reduce the otherwise higher costs associated with new
carrier agreements and varying inventories. This way your logistics
becomes scalable and flexible.
”
...want more efficient transport.
A 3PL operator consolidates multiple companies’ shipments. Benefit:
This makes shipping of your orders cheaper and more effective
than sporadic shipments.
...want logistical experience and expertise.
Many companies don’t have logistics as their core business.
Benefit: By utilizing 3PL players’ industry knowledge and logistical
expertise, the company will stand stronger.
Fredrik Krysén, Transport Director
Aditro
For many companies, logistics are not part of their core
business, and not prioritized by the management. If
they choose to insource their warehouse this can be
both costly and time-consuming.
Outsourcing logistics allows for savings for up to
10-20%, and release time and opportunity for
a company to focus on its core competencies.

6
KPIs
every warehouse
manager should know
What are the key factors to optimize and measure on when sending parcels
from your warehouse? We have asked experts in the field and gathered a
number of KPIs that every logistics and warehouse manager should know.
The process behind a shipment can be split into several parts, each of which can
be measured and optimized. KPIs (Key Performance Indicators) are objectives
which an employee or a department can work towards in order to optimize a
company’s processes.
We have asked experts about which KPIs are most valuable to measure when you
want to optimize shipment and delivery processes in your business. Here are their
answers.
2.
Label print
You can increase the speed in several ways, when your parcel has to be labelled
with the correct transport label. Firstly, integration and reuse of data
from backend systems is important, as you save time compared to manual
typing of information. You’ll also save time by automating the choice of
shipping method through a system of rules.
Once everything is correctly set up, it must not take more than 1 second
from the order number being scanned and retrieved from another system
to the label being produced. This is not the case for all warehouses, which
is why many would achieve significant optimization by automating this.
– Vice President, Steffen Pasgaard, Consignor.
1. Picking
The process of picking of goods can be divided. You can affect the overall
speed by optimizing every single part. Therefore, picking speed depends
on several factors: how the order list is designed in relation to the location
of the products in the warehouse, time devoted to picking of goods, the
size of the products to be picked, and whether picking is done by robots or
humans.
A KPI for picking speed can therefore vary a lot. A concrete example of a
KPI for a warehouse with 250,000 different small items may be picking 30-
60 order lines per man per hour.
– Transport Director, Fredrik Krysén, Aditro Logistics.
3. Packing
It is faster to pack a shipment when the package has the correct size for the
specific product. Therefore, it is often worth the effort to choose a slightly
more expensive cardboard box if it means faster packing and thus time
and resource savings.
In general, it is important to optimize your packaging as
best as possible. If you use stretch film for your shipments,
you can often choose a lower thickness of stretch film,
which adds several meters to the roll. This means fewer
roll changes on the machine and faster packaging
speed, so you can use your time on other tasks.
– Sales Director, Michael Simonsen, STOK Emballage.
7 out of 10
companies use too
much packaging
Source: Universe Of Delivery

4. Tracking
80-90% of the customer experience depends on
the delivery, and transparency and on-time delivery
is essential. Therefore, it is important that you are
able to quickly and easily track shipments when
customers call wanting to know the shipping status
of their parcels.
73% of online consumers think that
track & trace and knowledge about the
delivery time will make them shop
even more online
Source: Universe of Delivery
We have reduced the customer processing time from 70
seconds to 15 seconds when customer service track parcels
for customers, as we now do it in an online portal, which is regularly updated
with status on the shipments we produce. Thereby, we are able to
immediately track parcels by logging on to the portal online without disturbing
the different carriers, as all shipment numbers are captured in one
complete system. Customers can also track parcels by themselves in the
portal.
– CEO, Jesper Hvejsel, Firtal.
5.
Delivery time
Geography and service affect the time of delivery of
your shipments. Day-to-day delivery is widespread in
small geographies; great distances take 2-7 days while
one-hour delivery is gradually becoming an offer in urban
areas where the location of the warehouse allows this.
Delivery time is a parameter that is increasingly focused on
– and several carriers position themselves with new services particularly related
to; delivery time delivery in the evening, on the weekend or next day
to e.g. the Middle East can mean the difference between getting the order
or not.
When using delivery as a competitive tool, it is important to
measure the effect of your choice: On-time delivery is an
important KPI for all senders – especially when you have
made a commitment to the receiver to deliver within a
certain time frame. KPI for on-time delivery must
therefore naturally be as close to 100% as possible.
– Vice President, Steffen Pasgaard, Consignor.
Consumers are willing to
pay up to 6 times more for a
convenient delivery option.
Source: Bringg
6.
54% of online shoppers think
about returning an item before
they have even purchased it!
Source: eDelivery
Return time
Attractive return options as well as simple and
efficient returns management at the warehouse
is important. When we receive returns at the warehouse,
we register the product with a few clicks and use the invoice
number to identify the order in a return portal. Both customers and customer
service are able to track returns in the portal. When customers print
return labels from our site, they fill out a form as to why they want to return
the item e.g. wrong size, credit or repair.
That way we can more quickly handle the return, and the customer gets a
faster processing. It maximum takes two days from when we have received
the return at the warehouse to the customer receiving a refund. Generally,
it is important to keep the number of returns at a minimum by using good
product descriptions, product videos, size guides and FAQs.
– E-commerce Manager, Jonas Larsen, Friluftsmagasinet.