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Key Takeaways One of the best lines of defense against poor warehouse performance and stagnant or declining growth is to take an in-depth look at key warehouse metrics.
To build agile, resilient warehouse operations that can scale and sustain growth, ecommerce businesses may want to consider how labor productivity, mean time-to-ship, mis-ship percentages, inventory count and cancellation rate are shaping their warehouse performance.
Global business-to-consumer (B2C) ecommerce revenue is expected to grow to $5.5 trillion by 2027 at a steady 14.4% compound annual growth rate (CAGR) — and every ecommerce leader worth their salt is determined to increase their share of the profits. Yet when brands think about growth levers, they often focus on customer acquisition, marketing and adding new sales channels, while the behind-the-scenes growth engine of warehouse performance gets overlooked.
Ecommerce leaders with this blinkered view of growth strategy neglect to recognize that warehouse operations are one of the biggest constraints on scalability and profitability. Whether fulfillment bottlenecks, mis-ships or stockouts, these impediments to optimized warehouse performance have a direct (and costly) impact on customer experience, brand reputation and revenue growth.
Unfortunately, normalizing inefficient processes in the warehouse has become a common problem for online merchants. Understandably, warehouse managers are distracted by the complexity of keeping up with peak demand volumes amidst increasing expectations for fast, transparent delivery. Overwhelmed by the day-to-day, they overlook ongoing issues — picking errors, disorganized packing processes, increasing return volumes — as long as orders continue to get out the door.
With fulfillment bottlenecks stifling growth for so many ecommerce businesses, warehouse performance has become a key competitive differentiator (and a hidden growth engine), giving forward-thinking companies a leg up as they contend with demand volatility, rising labor costs and supply chain disruptions.
Looking under the hood
Every business professional has heard the familiar adage, “You can’t manage what you can’t measure,” and, in this case, it rings true. One of the best lines of defense against poor warehouse performance and stagnant or declining growth is to take an in-depth look at key warehouse metrics.
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