Using Cloud Technology in the Warehouse

Written by Michael Gandy on 15 June 2015

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Warehousing and order fulfilment are hot topics in the ecommerce industry. Customer experience is king and offering the best services possible is key to success with the ever increasing demand of consumers who are a whole new level of ‘picky’. Cloud technology is now starting to play a big role in warehouse operations, enabling retailers to integrate their warehouse seamlessly with their online shops, couriers and with other online information services. It's a good thing, here’s why.

The Online Shopping Experience

Shopping online for the consumer is very two sided. On the consumer facing side we benefit from incredible, integrated and easy-to-use ecommerce systems which guide us through the process of buying with lots of relevant information and little friction. It’s effortless.

What happens next is a mystery to most consumers. The average warehousing and fulfillment services that despatch these orders use some form of technology, however they are very different from the technological sophistication of the average online sales process. On one hand you have a web of linked cloud services e.g. your Gmail, AdWords, Magento, eBay, PayPal etc. Which are all real-time; which are always available; which save information you can go back and read or edit; which share this information between themselves; and each of which do a very well defined task - and in turn do their task very well.

Warehouse Technology Now

By contrast warehouses tend to use older technology systems that rely on complex and insecure local servers, EDI, manual file uploads and downloads. All of which cause bottlenecks and delays in the fulfilment process which ultimately impacts on the customer experience. Nobody wants a delay in despatch, and a mistake such as sending the wrong products causes a huge amount of pain for consumers. Using cloud software (technology that runs over the internet) in the warehouse is a fundamentally different approach.

Warehouse Cloud Technology

Cloud technology allows warehouse operations to process everything online live. It enables the warehouse to integrate seamlessly with online shops, with couriers and with other online information services; reducing errors, reducing costs and improving efficiency and information availability.

Most warehouses don't use cloud systems to pull through orders automatically as they are placed. They instead use legacy systems that rely on batch uploads/downloads. While these systems use the technology of the internet, it is old and inelegant compared to the live integration offered by the cloud.

Warehouse team members do have quick access to data, it is often not live but uploaded every 30 minutes. Which is fine until that 30 minute delay manifests itself as a problem with, for example, order import. If files containing orders are uploaded every 30 minutes it is entirely possible that the last transfer of the day could contain an unpredicted spike in orders. This can lead to the warehouse running out of time to process them and delay dispatch until the next day. In a world where the consumer expects fast delivery such a delay can have a huge impact on retailers, where the customer service cost of a delayed delivery can be greater than the profit of ten orders.

Carrier Integration

Another example is carrier integration. Some carriers do not use cloud technology and require a file upload at the end of the working day with the details of all the orders packed and their addresses. This is after the orders have all been packed and are being loaded on to the lorry. The carrier then returns a file detailing any errors in addressing, tracking numbers, formatting etc. The warehouse would then have to repack all the orders with errors, that is if the lorry has not already left. Even if it hasn't the driver will be unlikely to want to hang around while the warehouse staff unload and look for the problem orders; they will have other collections to make and can’t be late.

Many carriers sensibly offer high-grade cloud systems built on the same architecture of the best-in-class ecommerce services. These services can be linked in real time to cloud warehouse software. As the orders are packed their addresses are submitted to the carrier live. The carrier then responds with live acceptance. If there is an error it is notified immediately, not at the end of the day, ensuring staff can correct any errors straight away, not tomorrow.

Summary

These may seem like small problems and 90% of the time these older systems will work without a hitch. However, in the increasingly competitive world of ecommerce, using cloud technology to increase warehouse accuracy to 99.998% is a competitive advantage retailers cannot afford to ignore. There's more complexity than just this, but hopefully this gives you an idea of why live, web-based services have many benefits over old fashioned local systems.

Author

Michael Gandy is Marketing and Business Development Manager at James and James Fulfilment. James and James store, pick, pack and despatch products on behalf of eCommerce retailers. James and James empower their clients by using technology as a vehicle for improvement and change.

Michael Gandy
About the author
Michael Gandy

Michael Gandy is Marketing and Business Development Manager at James and James Fulfilment. James and James store, pick, pack and despatch products on behalf of eCommerce retailers. James and James empower their clients by using technology as a vehicle for improvement and change.