Warehousing Operations Guide: Part 7

(11) Orders Consolidation

In this process, individual orders are combined (merged) together that are going to the same place (customer delivery address).

Quick recap: In our previous article "Comprehensive Guide on Warehousing Operations - Part Six (6)" we learned about the following processes:

?— Work in Process (WIP)

?— Value-Added Services (VAS)

?— Order Assembly

?— Order Checking

?— Order Packing

This article is divided into different parts.

For Part 1 — Click?HERE.

For Part 2 — Click?HERE.

For Part 3 — Click?HERE.

For Part 4 — Click?HERE.

For Part 5 — Click?HERE.

For Part 6 — Click?HERE.

What is the point of "Orders Consolidation"?

Some of the reasons, businesses use this process includes:

1. It reduces the number of shipments
2. Lowers the transportation and shipping costs
3. Faster delivery times
4. Reduced speed to market helps lower warehousing storage costs
5. Happy customers through improved customer service
6. Increased efficiency
7. Reduces packaging waste
8. Reduces double handling of products that need to be shipped

etc.

HOW DOES IT WORK?

A) In small warehouses

This is usually done by putting the orders together in one area after they are packed.

Then the order pickers/packers check the delivery address and customer name to ensure they are going to the same place.

Once they confirm that they belong together, they are either put into boxes or palletised if they are heavy and big in quantities.

B) In the medium to large-sized Warehouses

The Enterprise Resource Planning (ERP) or a Warehouse Management System (WMS) have systems and programming in place to take care of this process.

This process may vary from place to place, depending on:

— The type of business

— Operations

— Nature of products and services

— Customer types

— Service Level Agreements (SLA) with the customers

— Delivery timeframes

For certain businesses, they might have dedicated consolidation warehouses. They do it because it is more economical and easier if they are dealing with large orders.

In these warehouses, shipments from different suppliers are grouped into larger loads usually using full truckloads (FTL).

This helps save on transport costs, reduce shipping times, and faster delivery times.

Advantages and disadvantages of "Orders Consolidation"

The advantages and disadvantages of this process are discussed below:

(1) Pros (Advantages)

??Reduction in Shipping Costs

Shipping multiple orders together and using FTL can significantly decrease shipping costs.

? Reduced Risk of Damage to Goods

Reduced handling means less risk of damage to products.

??Better Customer Service

Satisfied customers = Happy customers

AND

Happy customers = More business

? Sustainability

Fewer trips mean:

? Reduced emissions

? Lower environmental impact

? Lower expenditures

This help businesses become more sustainable and reduce their carbon footprint.

? Improved Quality Control

? Faster Delivery Times

Shipping multiple orders together for one business address means fewer trips and faster overall delivery.

? New Technologies brings improvement and time saving

New technologies and improvements in systems like TMS help in organising consolidated shipments.

? Minimised handling & claims

Reduction in material handling reduces the probability of product damage which in turn reduce the likelihood of claims from your customers.

Cons (Disadvantages)

? Requires careful planning

For small warehouses this process can be an easy one, however, it can become challenging for enterprises that have larger operations.

Planning and organising can therefore take more time and resources.

? Complicated scheduling

For consolidated warehouses, the scheduling can become complicated and therefore become a big challenge during busy times.

? Impact of Reverse Logistics

Reverse logistics can bring extra challenges to the mix, especially if the operations and customers base is larger.

? Lead times

For certain products/orders lead time can vary and may not be as fast as the customer/end users want it.

? Not the right option for time-sensitive orders/shipments

If you are doing urgent and time-sensitive deliveries, this won't the right solution for it.

? Does not suit certain categories of goods

For products such as:

— Oils & chemicals

— Hazardous/dangerous goods

— Delicate/fragile items

This might not be suitable or the best option due to WHS laws and regulatory requirements.

? Finding reliable partners

This can become a challenge for certain geographies where the businesses operate from.

(12) Dispatch, Shipping and Delivery

After the products for different orders are picked, packed, and labelled, it is time to send them on their way to the final destination.

HOW DOES THIS PROCESS WORK?

(1) Someone in the warehouse team prints the dispatch manifests, shipping labels, and then attaches them to the orders.

These labels can contain:

— Products Information

— Delivery Tracking Barcode

— Delivery Address

— Delivery Instructions

(2) After the labels are attached to the orders, they are taken to the designated areas in the warehouse for deliveries.

(3) Dispatch team members then load these onto the trucks through the loading docks or other designated delivery areas.

(4) Delivery drivers with vans pick up their deliveries from the designated spots in the warehouse.

Note: These spots are appointed either by the warehouse manager or the operations team.

That marks the end of goods handling for warehousing company.

The Ownership of Goods

It is transferred to the carriers (freight companies) once it is taken off their warehouse or distribution point.

Three different components involved in sending products (shipments) include:

1) Dispatch

2) Shipping

3) Delivery

(1) — DISPATCH

Dispatch refers to the point in time when items leave the distribution point through a third-party courier or postal company (carriers).

NOTES

a) A distribution point can either be a warehouse or a distribution centre.

b) Carriers mean companies who carry your shipments (orders) for a fee.

Some examples of carriers are:

DHL, Toll, Courier Please, Australia Post, UPS etc.

The Dispatch Date

It is recorded in a Warehouse Management System (WMS) or in an Enterprise Resource Planning (ERP) system, whatever your business is using.

This is used to:

1 —?track orders delivery schedules

2 —?update the customers on the estimated arrival times

3 —?record any possible delays that may occur

EXAMPLE:

Two full pallets were dispatched on Tuesday, 16th November 2021 at 2:52 PM (AEST).

As soon as the items are dispatched, ownership is transferred to the carrier.

(2) — SHIPPING

Refers to the point in time when goods are in transit (on their way) to be delivered to the customer.

This means the shipments are loaded onto a truck, van, car, or motorcycle etc. They are on their way towards the final destination.

OWNERSHIP OF GOODS

It is transferred from the warehouse to the shipping/courier company once it leaves the warehouse or distribution point.

SHIPPING DETAILS

These are tracked through the tracking numbers or bar codes provided by the carriers. Carries include couriers and cargo companies.

These details can provide real-time updates on where the delivery is at any given moment.

This is great for:

1) Visibility

2) Keeping track of different deliveries

3) Checking late deliveries

4) Inform your customers of potential delays

SHIPPING DATE

It is different from the dispatch date.

Example:

Two pallets shipped to ABC retail store on Friday, 18th November 2021.

>> For Business to Business (B2B)

A shipment could be for a retail store, an eCommerce store, or any other business.

Example: Myer receiving 12 pallets of products via UPS carrier

>> For Business to Consumer (B2C)

This shipment could be for the end-user where the products were purchased directly through your company website or from another retail/eCommerce website.

Examples:

1. Mr Ali will be receiving a shipment of perfumes he has placed on eBay.

2. Mr Smith will be receiving a shipment of water bottles bought from Myer.

(3) — DELIVERY

This means the shipment(s) have reached the final destination and the goods are dropped off at the customer delivery address.

OWNERSHIP OF GOODS

The ownership is now transferred from the courier/delivery company (carriers) to the customer/end-user.

DELIVERY TIME

This includes the time when products were dispatched from the warehouse until they were dropped off at the customer delivery address.

TRACKING

Delivery drivers update the tracking information and mark shipment as “Delivered” on their devices.

Examples: mobile phone app, tablet app or some other electronic device.

DELIVERY DATE

When the customer receives the shipment, that date is known as the delivery date. This is different from the dispatch date.

EXAMPLE:

The estimated time for delivery is two to four business days. Estimated delivery date 26th November 2021.

NOTES + DEFINITIONS

(1). CUSTOMER

A customer usually refers to another business that you are serving.

Example: A retailer, an eCommerce business etc.

(2). END-USER

Is the person whom you are serving directly or serving them on behalf of another business that you have a contract with.

Examples:

A) Amazon delivers you products via home delivery.

B) Courier Please (courier delivery company) delivering products to the buyer's house purchased via an online retailer website.

(3). FINAL DESTINATION

It refers to the point where the shipment needs to go for the last time.

This is the last place the shipment travels to.

It can be:

? another warehouse

? a distribution centre

? a retail store

? house/unit address of the end-user

This marks the end of the topic "Dispatch, Shipping, and Delivery".

This article is divided into different parts.

For Part 1 — Click?HERE.

For Part 2 — Click?HERE.

For Part 3 — Click?HERE.

For Part 4 — Click?HERE.

For Part 5 — Click?HERE.

For Part 6 — Click?HERE.

Published on 17/11/2021

Last Updated:?02/12/2021 at 12:51 AM