Optimising FMCG warehouse operations: 9 key strategies

Are you looking for ways to optimise your FMCG warehousing operations? Explore 9 strategies in our industry guide.



From one perspective, all warehouses are pretty much the same – four walls filled with stuff.

Fulfilment operations, too, tend to follow the same pattern: pick, pack, dispatch, now and then deal with a return.

Nevertheless, warehouses are far from a one-size-fits-all affair. Different sectors have different requirements. A warehouse shipping out subscription boxes, say, will have markedly different priorities from one storing medical supplies.

The same goes for fast-moving consumer goods (FMCG) – high-demand, low-cost items such as toothpaste, soap, laundry detergent, over-the-counter medicines, soft drinks and snacks.

FMCG have a high turnover rate and a short shelf life. This means FMCG facilities focus on different aspects of warehousing than other sectors.

In the fast-moving world of fast-moving goods, warehouse leaders must fulfil orders at a clip, oversee tight inventory controls and rotate stock according to strict rules and timelines.

Not all warehouses rise to the challenge. They have suboptimal procedures that lead to fulfilment errors and disgruntled customers.

In this article, we consider nine key strategies for optimising FMCG warehouse operations. But before we do, let's take a look at the challenges these kinds of operations face.

What challenges do FMCG warehouses face?

The FEFO formula

In FMCG warehouses, stock is managed according to FEFO – first-expired, first-out.

This means items with expiration dates closest to the shipping date are shipped out first. Done right, this prevents overspending on waste and spoilage. Done wrong, it can leave you with mountains of unusable, unsaleable stock.

 Storage considerations

As the name suggests, fast-moving consumer goods move fast – and they're replaced equally as fast.

That means high-density pallet racking systems, automated retrieval systems and warehouse management systems must be used to keep on top of the chaos.

Perishable items like dairy, fresh food and some cosmetics need to be kept in controlled climates. This involves monitoring and maintaining temperatures and humidity levels. This is a consideration that doesn't apply to many other kinds of warehousing operations.

Compliance

Last but not least, FMCG warehouses must keep abreast of quality recalls and compliance audits. One key aspect of this is batch traceability – the capacity to track recalled products so they can be promptly isolated.

These are a few of the main challenges faced by FMCG warehouse operations. So, how can operations be optimised? Here are nine key strategies used by FMCG warehouses globally.

9 ways to optimise FMCG warehouse operations

1. ABC analysis

This is a technique for inventory categorisation that divides inventory into three classes (A, B and C) based on their consumption value.

By ranking inventory from A (high-value) to C (low-value), warehouse leaders are better positioned to allocate storage slots based on demand. Under this system, class A inventory would be the easiest for pickers to find and retrieve.

2. Automated replenishment

One of the main reasons FMCG warehouses lose money is through having too much or too little of their inventory – overstocking and stockouts, respectively.

This can be avoided by using a warehouse management system (WMS) to forecast when purchase orders should be made. These forecasts will be based on highly accurate, highly accessible data.

3. FEFO

FEFO is both a challenge and a solution for FMCG warehouse leaders. If the warehouse stores and ships perishables and time-sensitive goods, racking layouts can be optimised to ensure that older stock is always used first.

4. Vertical storage

FMCG warehouses handle lots of goods. But warehouse managers are wasting money if they don't optimise their storage.

The key way to do this is to install high-density racking systems such as pallet shuttles or drive-in racking. This maximises the use of space – and stretches the budget that bit further.

5. Strategic slotting

Are your goods meant to be fast-moving but your pickers are moving too slowly? You may want to consider strategic slotting – the practice of putting A-grade goods close to shipping zones and loading docks.

6. Narrow aisle configurations

Instead of – or as well as – increasing vertical storage, you could consider narrowing your aisles.

This is another way of maximising space. The only drawback – at least initially – is that you'll need to invest in specialised very narrow aisle (VNA) forklifts.

7. Deploying a WMS

A cloud-based WMS can make a huge difference to FMCG warehouse operations. Functionalities as diverse as order sequencing, put-away optimisation and end-to-end real-time inventory visibility all help things run more smoothly and more profitably.

8. Voice picking and barcode scanners

If your FMCGs are being picked by staff pushing trolleys and carrying pen and paper, you may find that inventory and order inaccuracy is adversely affected.

It's far better to use a WMS integrated with voice-picking headsets or barcode scanners. These bring human error down to near zero and picking accuracy up to near perfection.

9. Key performance indicators

Every business has a plan. But how do you know if you're sticking to it? The answer is key performance indicators (KPIs): measurable, objective standards that monitor everything from your stock turnover ratio to your order fulfilment rate. These increase both accountability and outcomes.

How we can help

In many ways, the best thing you can do to optimise your FMCG warehouse operations is invest in a cutting-edge WMS like ours.

This will give you real-time visibility, streamlined picking, expiry management, optimised slotting, batch traceability and more.

And by integrating your WMS with a voice-picking system, you can increase picking accuracy to 99.97%.

So, if you're looking for an FMCG warehouse management solution that moves as fast as you do, book a demo with our UK experts today.