Right place for fashion storage

A proper positioning of a warehouse will not only facilitate easy and efficient transportation of products from the production centre to the customers with the least possible cost but also without compromising on the quality of the product.

“To ensure timely stock to shelf process, the location should be selected accordingly. A warehouse should be located in a safe and convenient place with quick transport abilities and easy access to different areas. This allows companies to have fewer problems of products regarding on-time, safe delivery. The location of a warehouse helps in driving business profitability in the terms it helps in cost saving and resource optimization,” opines Nihar Parida, COO – Logistics and Marketing, Uniworld Logistics. But do Indian retailers look up to this seriously? Mohit Kumar Kasinwar, Manager – Logistics, 3PL Operations, Indo Arya, is of the opinion that very few Indian retailers are actually serious about this issue. “Every company thinks about the costing and rent before hiring any property and seldom thinks about connectivity or other related things in this matter,” he says.

Parameters for selecting a warehouse

Change in fashion demand is not always predictable and could give rise to hassles in the supply chain if not carefully looked into. On this backdrop, selecting a warehouse location could be termed as a strategic decision for any apparel retailer. Factors like operational costs, labour cost and rentals of a particular area need to be assessed before finalising any location for building a warehouse. “Also proximity to consumption and production centers as well as connectivity by road, air, rail, sea, power, water and telecommunications should also be analysed. Besides, if the warehouse is located in a major warehousing hub, it will make it accessible from main highways and also help in building industrial relations in the area,” Parida explains.

Then there are government policies and regulations like tax benefits, regulatory benefits that need to be taken care of too. Kasinwar points out that availability of skilled manpower and factors like warehouse/building condition, the kind of locality and the availability of essential amenities, if checked, can help in choosing the best location for a warehouse.

State-of-the-art warehouses need of the hour

Warehouses constitute nearly three per cent of the total supply chain cost. But in spite of occupying an important place in the supply chain, the state of these warehouses is no less than conventional store houses, with little or no infrastructural facilities. Most of the buildings are old, have poor flooring and very little storage space and lack even the basic equipment. Also, automation of warehouses and use of modern equipments, which have been neglected so far, is very important. The availability of inexpensive labor in India has blinded many warehouse owners to the fact that automation can help in bringing quality to the work.

“Warehouse location is an important concern in a fashion supply chain. For a fast changing fashion industry, dynamism is what is required. Modern warehouses and equipments happen to save time and operational costs and will, in turn, result in more business efficiency,” Kasinwar comments.

But Parida is quite optimistic about the way things are changing. “Warehouses, of late, are witnessing a revolution in India in terms of adopting newer models and technologies. The demand for high-tech warehouses with ultra-modern facilities in place will rise exponentially, if not now, then in the coming years.”

Challenges in a fashion supply chain

Lack of proper warehousing infrastructure and poorly planned distribution network has always limited the scope for an effective SCM. Proper designing is what is required for a smooth fashion supply chain in today’s time. To ensure a supply chain that is fast and effective at the same time, it should be fully automated that could be responsive to the needs of the consumers and adaptive to the frequent changes that occur. Continuous improvements are required in the chain in order to be able to get the best desired output in the least possible time, without much of a hassle.

The problem of shrinkage has also plagued the fashion supply chain, resulting in the retailer to incur heavy losses and his margins getting largely impacted.  “Shrinkage can be the result of flawed receiving processes, mislabelling of products or even theft.  It can be tempting to focus only on accuracy, but productivity must be considered as well,” says Parida. He, on his part, recommends three simple steps that, if implemented, will help in increasing both accuracy and productivity while eliminating any kind of glitches – “As items are received into your ERP, it is easy to assume that the product has been put away in its default put-away location.  But, what if the warehouse staff puts the product in another bin?  Recording your put-away location can give you greater visibility into the placement of your inventory and may lead to unexpected productivity improvements. For example, your fastest selling items can be stored near the back and should be brought closer to your shipping dock.  Knowing what you have and where you have it can be beneficial. Secondly, once you know where your items are stored, you can begin counting them more frequently.  Counting more frequently and systematically will give you real-time visibility into your inventory levels and warn you of a possible shrinkage issue before it becomes a huge problem.” The third step, as he says, is to print the pick list with one order or a group of orders and then delivering that to the pickers via paper or handheld computer.  The picker will be directed through the warehouse in the most efficient path and is asked to pick from specific bins.  This type of picking helps orders ship quickly and tracks the inventory levels closely. “It is easy to create a pick list by order but the true productivity and accuracy improvements come from picking by bin.  Most ERP systems have the ability to print a pick list in bin location order,” Parida reiterates.

In the new role

Parida suggests that a consultant’s help can also be taken in determining a warehouse location. There are property consultants who can offer a lot of options in terms of choosing a property as per the retailer’s requirement. As more and more competition builds up and business environments get even more complex, logistics and warehouses now have got a bigger role to play in the interests of the larger good of the economy. There has also been a growing consensus on how warehouses that have until now been only receiving, storing and despatching products can redefine their roles. In other words, warehouses should start enacting the role of that of an extended arm of customers.