Hi guys, In this blog, we are going to understand another key aspect of Retail Warehousing which is the Complexity of Operations. A warehouse can be more than just a place to store products. The competition in Commerce is growing more intense with each passing year. There is a need for something extra that your Retail warehouse offers. You call it special functions or special operations such as Catalogs with special product requirements–product personalization and/or customization, special sizing, etc. These special functions create an opportunity which appears to be significant:

A Bain survey of more than 1,000 shoppers found that while less than 10% have tried customization options, 25% to 30% are interested in doing so. While it is hard to gauge the overall potential of customization, if 25% of online sales of footwear were customized, that would equate to a market of $2 billion per year.

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Providing the product customizations and personalization may help brands boost their sales but it also involves adding complex functions to their Retail warehouse activity. Let us have a look at such a special function in a Retail warehouse: Garment On Hanger (GOH) (also known in certain circles as Hangtainer). Many Retail warehouses dealing with apparel industries have such kinds of services and they usually benefit in terms of labor, time, and cost by utilizing such operations as they can move the garments from the container to the shop floor DIRECTLY and in a good condition. These are standard/dry containers that are converted/outfitted to be able to safely and conveniently carry garments on hangers – the same way you see them hanging in all the major retail stores.

It’s not just the process complexity but the product complexity as well. One more way in which retail’s really unique relative to manufacturing or wholesale distribution is personalization. Personalization allows retailers to customize products for consumers to their specific needs. So you can order a shirt and get your name written on it or glassware and get it monogrammed.

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All of them are complex if you think of them from a software perspective because you have to get the information about what needs to be personalized down to the floor, so this operator can actually get it into the shirt.

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You also have to think about the situation where you might have an order that doesn’t need personalization but few items in the same order that needs personalization. And so you have to get the items that need personalization married together with the items that don’t. And that creates complexity. All this complexity shows how personalization in retail makes retail more complex than, manufacturing or wholesale. The process complexity of retail can be seen, in each of these different kinds of unique areas that you have inside retail warehouses that you don’t have in wholesale and manufacturing like the personalization area or the prep area.

Inbound and Outbound process complexity

Another part of the process complexity that you have to deal with when you set up D365 F&O is how do you just get the stuff there? The logic that’s necessary to route things either on the inbound side or the outbound side to these different little areas of specialization is complex. In fact, If you take a look at the more traditional manufacturing or wholesale warehouse when you pull it off the truck, the decision about what needs to happen to it next is pretty simple. But in a retail warehouse, there could be lots of places that the product that’s newly received goes before it’s really ready for sale and ready to be put away.

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  • It could go to a quality control desk.
  • or a sample of it could go to that quality control desk.
  • or maybe it needs to go to a prep center, where someone can bag it or put price tickets on it or remove price tickets.
  • it could go to the forward pick area.
  • or the new SKU area.
  • or it’s a flow-thru item that has to go to the flow thru area for Cross-docking.
  • or the return area.

By all this, what the warehouse manager is looking for is the right WMS system that could automatically direct the products to the configured location or another option for the warehouse person that’s receiving to decide where to move them. Whether to send it to prep, or this is something that he needs to move to quality control so he can manually force it to go there. Configuring that logic may be very challenging.

So the process complexity of a retail warehouse will lead you into questions from the warehouse manager that look like this:

  • What functionality do you have for a particular area like QC or prep?
  • How sophisticated your putaway rules are for guiding product to all these new inbound destinations or the outbound trying to get products or orders to personalization area or the gift-wrapped area. So you need to be able to demonstrate that you have rules in the system that can direct things to go where they need to go.
  • Can I divert straight from the dock into the forward pick location so that I can save the labor?
  • Can I save the labor of doing the replenishment task?
  • There can be outbound places that orders need to go before they get loaded, like gift wrap, and can you support gift wrap?

Product variety and complexity

The complexity of retail warehouses is not just the process and routing things but also the products that it has to store and ship. In most manufacturing warehouses, when something comes in, it really doesn’t matter to the guy working on the floor what’s in that box.

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But in retail, that’s not so true. You really need to know what’s in that stuff, because it’s going to influence where it needs to go, or at least the system needs to know. And so you need to be able to identify on the product master what kind of stuff this is.

Here are a couple of examples,

  • You could get pre-packs or packages (in D365 terminology) that come in from a vendor that has mixed SKU’s in a box and are destined for a particular store. By grouping, multiple units of one or more SKU, distribution and handling costs can be reduced.
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Pre-pack products
  • Then you can have things that are really big like non-conveyable which may need to get picked and loaded on to the truck first and then you squeeze in the smaller things around them to hold them in place inside the vehicle while it transports to the store.
Small Moves - Lugg
Non-conveyable product
  • You can have personalized items. These are products that the consumer can buy, but they can specify some way in which they can be tailored to their specific needs. You know, if they’re pants, they can be hemmed to a particular length. Or if they’re shirts or towels, they can be monogrammed with your initials or name.
Shoe Embroidery is a Fast Growing Way to Make Money
Personalized product
  • Then there’s also the ship-alone which are products that come in really large boxes and are sturdy and the product can literally ship out the door directly to a consumer in that box without having to be packed. All you need is the Shipping label to slap on the side and here it goes. They’re also too big to be mixed with other things in a box as well.
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Ship alone product
  • Then you also have shipping restriction rules in few countries like, you can’t put lithium batteries in a box that’s going to go overnight because that’s illegal. That means it would probably have to go on a plane and you can’t ship lithium batteries on a plane in some countries. The shipping and handling of lithium batteries have become a highly challenging and regulated endeavor. Given the fire risk associated with this hazardous material, heavy restrictions on transport and storage, from commercial aircraft bans to state-of-charge rules, have been imposed. As a result, organizations often struggle to cope with the impact of these requirements on the supply chain and find a safe, compliant, and cost-effective approach to packaging these materials.
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Hazardous product
  • Then there’s also the high-value merchandise things, like the diamond rings and the iPhones that only certain people can pick from that cage in which they are kept. They also sometimes can only be put into certain kinds of boxes that don’t identify what the merchandise is inside them.
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High-value merchandise
  • And another one that comes up all the time that relates to products in the retail segment is apparel and it is a bane in the side of many warehouse managers that work in the retail segment that they want their system to support the concept of style/size/color product variants because that’s what the merchants think and not in terms of specific SKUs. They think in terms of styles or sizes, and they’ll tell the warehouse manager from time to time, I want you to pull all the stuff associated with Style A.  The Style A has five different sizes and it has three different colors. So it’s nice to be able, as a warehouse manager, to go into the database and find those SKUs very quickly and say extract them or bring them down to the quality control desk. Supporting style/size/color is one of those litmus tests, I think that warehouse managers often use to ask that is this warehouse management package capable of supporting the complexity of the retail business.
product-variants
Different variants SKU’s
  • Finally, as we talked above, they have Garments On Hanger (GOH), and these products need to be stored in certain places. They also need to have a special type of pick cart. So you need to be able to wave orders that involve these items separately from, say, orders that don’t involve this type of product.
Garment Rack System - Concept Storage Solutions Warehouse Storage ...
Garments on Hanger

All of these are examples of how, the product diversity is immense in lots of retailers, and that creates the need for system support to tell the guy what kind of stuff is in this box that I’m moving so that it can get to the right place, or the right thing can be done to it.

So as a result of all these diverse nature of the operation and the different types of products that a retailer might offer to the consumers or their stores, you are sure to get questions that test you on your understanding of how D365 F&O can address this many different types such as.

  • How can I limit who can pick the items that are in the high-value cage? I have a select group of people only that I trust. I want to make sure they are the only ones that can make those picks.
  • How do I handle the personalization of products? How do I get that information down into D365 F&O Warehouse Management and to that person working in that personalization area so they get the right name on the shirt?
  • How do I set the cartonization rules so that the hazardous stuff, as well as the ship-alone, never get mixed together with other items going to a consumer when that consumer may order them with those other items.
  • Do you support style/size/color? which is a very common question you may have to deal with from the retail warehouse manager.

Fortunately, most of these can be dealt with D365 F&O Warehouse Management that fills the Gap of being the right WMS solution for the Retailers. D365 for Commerce and Advance Warehouse management goes hand in hand to provide the best solution for Retail warehousing.

I hope this blog helps you in some or the other way in this Retail Journey.

Feel free to reach out for any clarifications. If you like my blog posts then comment and subscribe to the blogs.

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Disclaimer: The information in the weblog is provided “AS IS”; with no warranties, and confers no rights. All blog entries and editorial comments are the opinions of the author.
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