3 Ways Retailers Can Avoid Warehouse Scalability Problems
2. Forecast accurately. Accurate forecasting is critical in a retail environment. It would be detrimental to come into a third-party logistic (3PL) or warehouse environment planning to do 1,000 orders a day when in reality you need to do 10,000. That's a very costly mistake.
The key to scaling effectively is near-accurate forecasting. Calculate your anticipated orders by day, week and month. Make sure to factor in the number of units per order, when goods will arrive at the warehouse and type of product (e.g., apparel, cosmetics, etc.). Once you have this information, you can then determine the equipment, automation, technology and systemic support needed to meet demand.
3. Stay ahead of the curve. Even with accurate forecasting, you need the capital, resources and technology to meet long-term demand and scalability requirements. Be proactive, not reactive, by making investments in advance to keep your business agile. It's much more expensive down the road to make last-minute investments in big-ticket items.
An outsourcing and 3PL partner will have the infrastructure and resources in place to handle high levels of growth, especially if it comes unexpectedly. However, if you're managing your logistics and warehouse internally, you need the capacity, materials and equipment to handle more order volume than you're currently managing.
With proper planning, accurate forecasting and strategic investments to keep your business ahead of the curve, you'll be prepared to meet customer demand while maximizing profitability. By focusing on these three issues, you can ensure long-term scalability success.
Maria Haggerty is CEO and one of the original founders of Dotcom Distribution, a premier provider of B2C and B2B fulfillment and distribution services. She received her Bachelor of Business Administration from University of Houston, C.T. Bauer College of Business with a concentration in Accounting. Maria plays an integral role in developing and defining all aspects of the business, including sales and marketing, operations, finance and IT. As CEO, she is responsible for providing strategic leadership, establishing long range goals, and developing strategies for the senior leadership team. Maria has developed the systemic and procedural infrastructure necessary to provide timely and accurate analysis of budgets, financial reports and financial trends in order to assist the Board, senior executives and clients in performing their responsibilities while achieving favorable results. She works closely with the leadership team to enhance, develop, and enforce procedures that will improve the overall operation and effectiveness of the corporation. During her tenure at the Dotcom, Maria has developed an environment of continual improvement by supporting the Senior Leadership Team and their department managers on continuous process, space labor, automation, and financial best practices. Prior to founding Dotcom, Maria was a CPA at Arthur Andersen and was later the CFO of GoodTimes Home Video where she helped grow the company’s distribution business. When Maria is not in the office, she enjoys traveling around the world and practicing her photography skills.