Distribution is going through a dramatic change due to ecommerce order fulfillment. This is affecting manufacturers, distributors and retailers. Manufacturers that used to ship pallet quantities are now becoming single item parcel shippers because their big-box retail customers are asking them to serve as online order fulfillment extensions of their warehouses and stores. Distributors that used to sell to retailers are opening up their own ecommerce stores, either on Amazon/EBay/Alibaba, or setting up their own web sites. Retailers that used to focus on their brick-and-mortar stores are extending their ability to sell via the internet. In every case, abilities are stretched, often to the breaking point, causing disappointed customers or unprofitable growth. (We worked with one manufacturer/distributor that tripled their shipments due to an increase in ecommerce orders but had zero-unit growth overall.)

The efulfillment warehouse must be efficient at picking multiple orders with very few items per order.

Online order fulfillment usually happens via parcel shipping (UPS, FedEx) and can include as few as one item on the order. For a manufacturer or distributor that is used to shipping pallet loads, this business can be very unprofitable. For a retailer operating a brick-and-mortar store, they eventually have to grow beyond shipping out of their store’s backroom to a warehouse.

Distributors and manufacturers will often have to create three warehouses in one, an efulfillment warehouse, the mixed-item pallet quantity warehouse and the full pallet warehouse.

The efulfillment warehouse must be efficient at picking multiple orders with very few items per order. This is best achieved through wave or batch picking, where the order-selector will pick multiple orders in a single trip through the warehouse. Usually this requires a system to determine how to batch orders (how many orders to include in the single batch given to one order-selector). In addition, the technology must allow them to see item locations for the batch so they can efficiently pick all items in a single trip.