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Is my warehouse system ready for an omnichannel strategy?

An expert outlines key factors to consider when readying your warehouse system for an omnichannel strategy.

When it comes to an omnichannel strategy, many major warehouse management providers are going through the omnichannel...

learning process along with their customers. There are so many aspects to consider that even the most progressive product management professional can't think of them all. However, there are some important elements to consider when evaluating enhancements to an existing warehouse management system (WMS) or exploring a new software purchase.

Warehouse network location and optimization

Today, designing a distribution network takes more than just inventory optimization. Because warehouses can be designated as e-fulfillment or multi-purpose, as a third-party facility or even as a stockroom, the optimization algorithm has to consider all options. It also needs to consider the fulfillment models: bulk or pallet, cross dock or consolidations, along with the outbound transportation methods. In essence, multiple flows must be considered in the model.

Warehouse design and layout

Not all WMS applications create warehouse layout designs. With an omnichannel strategy, especially if the strategy has multi-purpose warehouses designed to support consumer sales and B2B functions, a warehouse optimization module may be helpful.

Understanding workflow patterns and product turnover are considerations for designing warehouse space today. Several design options can optimize time and maintain safety. For example, an omnichannel strategy may require segmenting the warehouse or allocating special shipping docks for parcels. Designs also need to consider the type of products. For example, food may be destined for home delivery rather than shipment to a store. The products may be cold, perishable and require special handling -- or they may be heavy products that need their own shelving, picking and so on, and require specialized bins for home delivery versus case and pallet for delivery to a store. Thus the design may need to consider new warehouse automation, the inclusion of robotics or new voice systems. All these need to be integrated into the WMS software.


Most warehouse systems use scanning, bar codes and lasers, for example. Readers may be fixed or mobile to support put away, pick, pack and ship. Today, as more organizations consider an omnichannel strategy that includes fulfillment across their logistics network, the idea of item level logistics with RFID is gaining traction. For example, RFID is used in warehouses to locate equipment -- carts, bins and so on -- so workers have the equipment they need to fulfill their tasks.

Labor management

Often a separate module from the core WMS, labor systems are selling swiftly in the market. With an omnichannel strategy, tasks often change. The hours of operations may change. Peak hours and loads may change. There may be more overtime to meet late-night cut-offs to meet next-day delivery promises.

Parcel vs. pallet

Transportation methods often change, or at least the volume by mode may change. A parcel module may be included in the WMS or users can buy these modules separately. But determining the best shipping methods should happen earlier in the process than at the shipping dock. Parcel carriers all have different rules on the cost by dimension and weight. Thus, one parcel carrier may be better for one type of shipment than another. Or less-than-truckload (LTL) may work better for slightly larger items (e.g., office supplies, furniture and electronics) than the parcel carriers' ground service. Many regional carriers and third-party logistics providers have so much volume with LTL carriers that today these become an option for home delivery, too.

Multi-site visibility and fulfillment optimization

A warehouse may actually be multiple warehouses or locations. The WMS should consider what is the best way and location from which to fulfill a particular order. Progressive omnichannel WMSes consider only stocking location -- a store shelf, showrooms and stock rooms as part of the multi-site foundation of their systems. The WMS should integrate transportation.

There are WMS providers who also have TMS. But, interestingly, only a few companies buy WMS and TMS as suites, because transportation management unto itself presents unique challenges.

Fundamental questions must be asked: When considering an omnichannel strategy, what is a warehouse? Is it a traditional warehouse model, a store, a showroom or stockroom? Is it co-located with channel partner?  Is it a third-party logistics provider or a van, trunk or container in motion? When considering a WMS and automation, the foremost question that needs to be asked is from where and to whom will we be fulfilling?

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This was last published in July 2015

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What challenges have you encountered when planning an omnichannel strategy?