For the average consumer, the fading heat of Summer and the slow creep of Autumn signals the start of the festive season — right from Halloween to Thanksgiving, and culminating in the end-of-year festivities. On the other hand, for retailers, the coming of Autumn means the intense build-up toward the holiday peak demand season. This means the need to build inventory and bracing for the ensuing logistics challenges. Additionally, managing individual peak demand during these periods is crucial for optimizing energy consumption and reducing operational costs.
Smart retailers have been taking on a different approach to inventory building in recent years. Rather than accepting an overstuffed warehouse that creates a bottleneck to logistics, ecommerce businesses are embracing a multi warehouse management strategy. This approach not only helps in managing inventories across different sites but also enhances order fulfillment by positioning inventory effectively. While shipping from multiple locations comes with its own set of challenges — such as managing inventories across different sites — it offers a significant advantage. By distributing stock across various warehouses, retailers can streamline fulfillment and distribution, making it a game changer, especially during the peak demand season.
What Does the 2024 Peak Season Have in Store?
Retailers are expected to feel the pressure in this year’s peak season, thanks to prevailing headwinds from the consumer base and supply chain complexities. This includes not only finished goods but also raw materials, which are essential for production and must be managed effectively to avoid disruptions. Maintaining optimal inventory levels will be crucial to minimize issues like overstocking and stockouts.
Strategic placement of warehouse locations can enhance order fulfillment speed and reduce shipping costs. Continuing geopolitical tensions and high inflation rates have cooled consumer spending. That said, Deloitte predicts the 2024 peak season will see decent momentum with projected sales totaling somewhere between $1.58 trillion to $1.59 trillion, with ecommerce being a key driver for retail sales growth.
“Although the pace of increase in holiday sales will be slower than last year, we expect that healthy growth in disposable personal income (DPI), combined with a steady labor market, will support a solid holiday sales season,” said Deloitte economist Akrur Barua.
The Advantages of a Multi-Warehouse Inventory Strategy
With the promise of growth during the peak season, getting logistics in top shape is priority one. Depending on the size of the logistics network, some companies inevitably struggle with distribution and fulfillment, given that freight has to travel a longer distance to reach the end customer. This means higher logistics, transportation, and freight costs and an overall drop in operational efficiency (a warehouse only has so many loading bays after all). Add in peak season demand spikes, and the challenges can quickly become daunting, if not unmanageable.
Shipping from multiple warehouses or stores changes the equation, especially when managing surges in demand during peak season spikes. Multiple shipment locations allow for a decidedly more flexible logistics network with better operating costs, higher throughput, and overall more reliable and consistent delivery times to customers. Storage facilities play a crucial role in this strategy. Systems that can track inventory across these facilities are essential for maintaining accuracy and efficiency.
- Close the Distance to the Customer: Customer density plays a big part in logistics. The closer a warehouse or distribution center is to high-density areas, the shorter it is to fulfill and ship orders. This means timely deliveries when and where they are needed most.
- Reducing Logistics Cost: There is a bit of a trade-off here, of course. Multi-warehouse management can increase overhead costs, but with peak season demand comes peak season freight rates. Shortening the distance inventory needs to travel significantly reduces transportation costs.
- Reduce the Carbon Footprint: Carbon emissions have been a hot topic in recent years, and consumer awareness is higher than ever. A multi-warehouse inventory strategy reduces the overall transportation distance even while increasing the size of a company’s logistical reach.
Regularly analyzing warehouse data provides insights into trends, bottlenecks, and opportunities for improvement in warehouse management strategies. That said, this requires everything to be working in perfect harmony. Achieving this is no small feat for many SMEs, which often rely on disparate systems and lack the purchasing power and infrastructure of their larger counterparts.
Challenges of Managing Multiple Warehouses
Managing multiple warehouses presents a unique set of challenges for ecommerce businesses striving to ensure timely and efficient order fulfillment. One of the primary hurdles is inventory management. Keeping track of inventory levels across various locations can be daunting, and ensuring that the right products are available at the right place and time requires meticulous planning and coordination. Additionally, warehouse operations, including receiving, storing, and shipping products, become increasingly complex and labor-intensive as the number of warehouses grows.
Another significant challenge is the collection and analysis of warehouse data. With multiple warehouses, gathering accurate data and making sense of it to inform business decisions can be a logistical nightmare. Effective multi-warehouse management demands a high degree of coordination and communication between different teams and stakeholders, which can be difficult to achieve without the right systems in place. These challenges underscore the importance of having robust strategies and tools to manage inventory levels, streamline warehouse operations, and leverage data for informed decision-making.
Seamless Multi Warehouse Management With Metapack
Managing warehouse operations across multiple warehouses or distribution centers can be challenging, as it requires tracking and maintaining the inbound/outbound flow across different inventories. Fortunately, that can be mitigated easily by utilizing a multi-warehouse inventory management system like Metapack.
Metapack allows merchants to manage shipments from any number of locations seamlessly, which is a must-have for e-commerce fulfillment and peak season preparation. Metapack helps companies perform at top efficiency in the following ways:
Delivery Management: Metapack supports various shipping methods and shipping across complex multi-warehouse processes, with the ability to consolidate orders to maximize efficiency and cost savings.
Carrier Management: Metapack’s integration with a vast number of carriers provides a more flexible shipping solution. With powerful and dynamic rules, businesses can ensure that parcels are assigned to the best-fit carrier to meet the customer delivery promise.
Returns Management: Reverse logistics can be a massive headache, especially during the holiday season. Returns on Demand API makes handling returns easier with the ability to build a self-serve experience, supported by several carriers and carrier services to send returns via the most cost-efficient method.
Reduced Shipping Costs: Metapack makes it easier to shop for different carriers for better rates, lowering shipping costs while increasing fulfillment speed.
Track Performance: Metapack delivers insights into shipping performance, meaning companies can make data-driven decisions to improve operations and control costs.
International Shipping Simplified: Metapack offers cross-border logistics solutions, making it easier than ever before to reach global markets with the same speed and efficiency of local operations.
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