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~ Descartes pixi ~

incoming product that requires storage is assigned a bar- Best-in-class players are using solutions that can help them
code that tracks where it is to be stored. classify and organise stock according to the rules of this
ABC Analysis. They have optimised picking and walk time
The chaotic storage warehousing model increases flexibil- according to the importance of their items and use technol-
ity by organising space more efficiently. It also reduces the ogy that can not only identify which items belong in which
risk of falsely picked items, as pickers can better see that category, but subsequently optimise warehouse performance.
they are selecting the correct item. Also, since the cha-
otic storage model is barcode-driven, there are automated 5. Optimised Returns Handling
checks and balances against picking errors. Furthermore, Returns are a fact of life in e-commerce, and a stream-
employees don’t need to spend time organising locations; lined return process is often essential for consumers.
on the contrary, new and seasonal workers become produc- Market leaders know that to deliver a “perfect” return, the
tive more rapidly since there is no need to memorise the warehouse, accounting, carrier systems, and e-commerce
platforms must work in lockstep.

A significant consideration is also the understanding
that only articles available in the inventory can gener-
ate revenue. Successful businesses are using solutions that
can quickly receive inventory not just back into stock but
directly communicate availability to online shops and sales
channels. Because of the volume of returns, synchronising
carrier platforms with powerful ERPs is critical for many
businesses.

Conclusion
Graphic: Chaotic storage is an organic shelving system using a barcode for each product without permanently E-commerce warehouses are complex operations with
defined storage areas. (© Descartes Systems) many moving parts and functions happening simultane-
ously. In this environment, it can be challenging to know
warehouse’s layout. Finally, all processes in the warehouse where to focus on productivity improvements and deter-
are optimised, since chaotic storage eliminates redundant mine where optimisation efforts will pay off. It makes
movements to fulfil and order by guiding the employees sense then that any competitive advantage is best derived
along an optimal picking path through the warehouse. from focusing on the elements of the fulfilment process
that affect the customer directly, i.e. pick, pack and ship
4. ABC Analysis processes.
ABC Analysis is based, in part, on the “80-20” rule. Build-
ing upon the Pareto principle, the 80-20 rule essentially While perhaps no e-commerce retailer or warehouse op-
states that 80 per cent of the overall benefit or profit origi- erator has realised the perfect operation, industry leaders
nate from 20 per cent of the total items. To put it another are searching for solutions that ultimately benefit the end
away, not all inventory has the same value, moves as quickly customer by optimising processes. Solutions with intel-
(has the same velocity), or has the same impact on the bot- ligent functionalities specifically designed for e-commerce
tom line. and built upon proven, metrics-driven results are critical to
realising a competitive advantage. ••
ABC Analysis is a simple way to classify items to bet- to know more about how to counter the
ter optimise layout or stock flow. The system also allows costs of e-commerce returns? Download the
companies to organise products and reduce the time that the Descartes pixi whitepaper:
workers require to store, pick, locate, or move items in the
warehouse.

This generally means: “A”-category items represent ap-
proximately 15% - 20% of the inventory, but represent 80% THERE IS MORE!
of its value, as they are the most used, “best sellers”, etc. “B”- WOULD YOU LIKE TO RECEIVE MORE DETAILS ABOUT THE ASPECTS DESCRIBED
category items represent 30% - 35% of the inventory and ABOVE? ARE YOU INTERESTED IN DISCOVERING FIVE OTHER TACTICS?
about 15% of its value. These items are often used/sold less
or have been assigned secondary importance. Items in the DOWNLOAD THE WHITEPAPER
“C”-category represent 50% of the inventory, but only 5% of “THE ULTIMATE GUIDE TO PICK, PICK & SHIP LIKE A TOP PLAYER IN E-COMMERCE”:
its value. In some cases, these items cost more to store than HTTPS://LP.DESCARTES.COM/ULITMATE-PICK-PACK-SHIP-GUIDE/
they are worth.

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