In developing an ecommerce fulfillment center move plan, it may be helpful to understand some common problems other multichannel companies encounter:
- Lack of sufficiently detail planning and budgeting
- Construction and permitting delays
- Inaccurate fulfillment center inventories, before and after the move
- Underestimating time required to install and test new systems (WMS, conveyance, sortation, material handling)
- Insufficient manpower planning to remain operational
Here are 10 key aspects to planning that will make your fulfillment center move successful:
Opening a new ecommerce fulfillment center location is a major undertaking. For an existing building, it often takes at takes up to 12 months from the time the lease is signed. If you’re implementing a new WMS, conveyance and sortation systems or other technology components, this could push the project timeline out at least six more months for implementation and testing.
Often, operations are less productive for the first couple months in a new facility, which causes budget and customer service issues. Determine early on who is going to take responsibility for planning, budgeting, task management and weekly progress reports.
Fulfillment Center Space Planning
As you plan out how you will use the fulfillment center, here are the major considerations:
- What are your space needs by department? For example, how much space is needed for receiving and staging for put away, pick carts, packing stations and materials and returns processing?
- What kind of layout for inbound product flow and outbound order processing?
- How will your space needs change during peak periods?
- What types of storage media should be considered, i.e. floor stack, pallet rack, shelving or vertical lift modules?
- What aisle width and rack designs are options?
- What material handling, automated sortation and conveyance systems will be used?
Determine Your Labor Plan
Have a realistic estimate of the amount of time required to plan and open the new ecommerce fulfillment center while remaining operational. Often this means planning overtime for both locations maybe for a number of months.
For the physical inventory transfer, plan out the time required for counting, shrink wrapping and transportation. Then at the new facility, how much time will be needed to receive into new stock locations and set up operations for inbound and order processing?
If the new facility is in the same metropolitan area, how many employees are going to be making the move, and how many new hires will be needed to cover for those who aren’t?
If your existing facility is being closed, how long will it take to pack up equipment and office items? If it’s staying open, how much time will be required to return it to its original condition? How much trash hauling is required?
Understand Local Planning, Permits, Codes
If you’re planning to make changes to the new facility, make sure you have a resource that understands all the applicable building codes in the new area. They need to determine what information and at what level of detail is required to obtain the necessary permits to outfit and occupy the fulfillment center.
Know Your Inventory Considerations
As part of the move plan, review all products and liquidate aged or dead inventory. Don’t move it to the new facility.
One of the major problems in ecommerce fulfillment center moves is inaccurate inventory, which slows down order picking in the new facility. The move can make the existing fulfillment center inventory inaccurate also.
We have found the best way to start the new facility with accurate inventory is to do a physical count at the SKU level, shrink wrap pallets and mark each with a license plate, i.e. an ID number for tracking. Map out the new facility’s locations and determine the exact stock location for each pallet. This helps both facilities to start with accurate inventory and will also help speed up truck loading and unloading times.
Reroute Deliveries and Returns
Determine what product and quantities need to be rerouted to the new facility. Change where returns will be sent. What customer notifications and vendor compliance website changes are needed?
Plan Your Racking and Material Handling
In closing one ecommerce fulfillment center and opening another, management often wants to know why you can’t use the existing racking and material handling equipment. Think through what needs to happen to exit part of the existing fulfillment center, including uninstalling and reinstalling racking while staying operational. Also, material handling equipment will need to be available in both locations.
Planning and Scheduling Transportation
After you have planned out what inventory you’re going to move, determine how many trailers it’s going to take, their costs and contract schedule.
Installation and Testing of WMS, Automation, Etc.
There needs to be sufficient time to test existing and new technologies and systems. These tasks have to be planned and shouldn’t be minimized, or you risk missing your opening.
Keep Up Communication with Employees
Depending on their level of involvement, communicate any pertinent information to them regularly. Some supervisors and managers will be involved in the planning, inventory moving, transportation and execution. Hourly workers will need new written procedures for various tasks (i.e. physical inventory and prep for truck loading).
In summary, define the detailed steps to be performed, assign responsibility and establish realistic estimates and timelines to complete the move plan. Remember that many steps will be dependent on others being completed first. Update and communicate the plan weekly to all stakeholders.
Brian Barry is President of F. Curtis Barry & Company