The warehouse as the bottleneck of growing e-commerce

A quickly growing webshop often faces challenges typical for webshop warehousing. This happened to Finnish Design Shop, which was having problems with the delivery reliability, balance accuracy and poor picking efficiency of its warehouse. It was the seasonal nature of the operation that finally concretized the need for developing the processes and tools of in-house logistics. Help was sought after the increase of delivery reliability, improvement of picking efficiency and the management of a large number of items and small, fragmented deliveries were set as a goal for the development of warehouse processes.

The requirements of warehousing were broken down in consultation with a Leanware in-house logistics expert. In the first stage, an overview of the current state of material flows and the development of the past few months was created by analyzing the order-delivery data of the customer. Additionally, by looking at the company’s order profile and the number of times items were picked, a general idea of the optimum locations of the items, the operational development potential and the picking strategies used at the warehouse was formed. From the benchmark viewpoint, the order-delivery data was also compared at the same time to the data collected from other operators of the same size and profile. After data crunching, it was time to head for the Finnish Design Shop’s warehouse in Turku to have a look at their current processes and to evaluate the development points of warehouse operations on site, where the requirements set for modern e-commerce’s warehouse operations were clarified further. Based on the visit to Turku and the data analysis, a final written report about the development areas, potential and measures of the warehouse was drawn up, which was then discussed with the customer. Finally, in connection with the consulting, benchmarking visits were made to two other e-commerce companies to view their best practices in warehousing.

“Cooperation went smoothly in all aspects and the study was comprehensive. The report didn’t really come up with any new issues from the viewpoint of warehousing, but confirmed old ideas. The report also included an XYZ analysis of the number of times items were picked, which helps in the design of warehouse operations more than the otherwise used ABC analysis,” comments Finnish Design Shop’s Logistics Manager Lauri Maukonen.

Maukonen continues: “From the XYZ analysis, we received a data-based confirmation about the picking frequency of the warehoused products, which previously would have only been based on the gut feeling of warehouse staff. The analysis makes sales and purchasing teams pay more attention to the picking frequency and the badly circulating class Z products.”

“After visiting several events and comparing various options, Leanware was chosen to be our partner because of their good sales work, reference visits and good feedback. The choice was confirmed by Leanware’s staff’s understanding of current and future in-house logistics problems and the genuine desire to develop in-house logistics processes to be as efficient as possible,” says Maukonen.

Finnish Design Shop Oy is the largest webshop selling Nordic design in the world. The company, which  was founded in 2004, carries a selection of over 150 Nordic lifestyle brands, such as Artek, Vitra, Muuto, Hay, Iittala and Marimekko. The company delivers products to over 180 countries.