Your Guide to Warehouse Layouts and Storage Systems for Hybrid Order Fulfillment Operations
Originally published on December 6, 2022 by Logiwa Marketing, Updated on March 3, 2023
Like many of today’s top warehouse operations, you may be considering pivoting to a hybrid fulfillment model, one that oversees multiple types of order management. Whether you are seeking to add direct-to-consumer (DTC) capabilities to your well-oiled business-to-business (B2B) warehouse, or you are trying to improve the efficiency of your established B2B-DTC hybrid fulfillment center—you’ve come to the right place.
Becoming a hybrid fulfillment operation is one of the best ways to expand your market reach, grow your business, and broaden the types of services you can offer your customers. While the concepts behind these two fulfillment types both involve accurate inventory management and efficient shipping strategies, executing both services the same way in the same warehouse can be challenging.
In order to succeed, truly efficient facility layouts, storage methods, and warehouse technologies are needed to ensure the success of hybrid fulfillment environments.
In This Guide, We’ll Cover:
- DTC vs B2B Warehouse Layouts
- B2B Warehouses
- DTC Warehouses
- Laying Out Your B2B-DTC Hybrid Warehouse
- Warehouse Management Software in Hybrid Warehouse Facilities
- Hybrid Fulfillment and the Future of Logistics
DTC vs. B2B Warehouse Layouts
When thinking about managing a B2B-DTC hybrid warehouse, it is important to remember the key differences between these two service models and how those differences impact the layout requirements within a given facility. The processes involved in carrying out B2B and DTC operations could not be more different, and therefore require careful warehouse planning to function successfully under one roof.
In a B2B service model, orders are shipped directly to other businesses. Regardless of the types of inventory you have, you can expect to sell items in bulk, store mostly unopened boxes, ship pallets rather than individualized orders, and oversee a relatively small workforce. Aside from leaving ample room for forklifts, pallet jacks and warehouse robots, or including an area for cross-docking operations, laying out an effective B2B facility is generally easier than DTC operations. There are less shelves, less fulfillment tasks to plan for, order retrieval is more straight-forward, and shipping docks act as your primary sorting stations.
For DTC service models, however, there are more processes to plan for. Because you are preparing orders to send directly to customers, you are managing high volumes of loose inventory items, all of which need to be organized and retrieved efficiently to execute accurate fulfillment. That means you need to have dedicated mechanisms in place for order picking, strategize areas for sorting and packing, and make room for broken items and returns. DTC warehouses tend to have more foot traffic (whether that be humans, robots, or both!), so walking path optimization will also be a factor to consider when laying out your hybrid facility.
Laying out Your B2B-DTC Hybrid Warehouse
When it comes to managing B2B-DTC hybrid fulfillment operations, it helps to start by asking yourself the following questions:
- How will you segment your facility?
- What is your ratio of B2B to DTC business?
- Do you need better racking systems?
- Are you prepared to try a put-light or mobile scanning system?
- Where should your packing stations be to prevent bottlenecks?
- What types of picking methods are you going to designate for both sides of your operations?
- How will you need to establish different zones for B2B and DTC inventory?
When considering an expansion into DTC fulfillment services, optimizing your warehouse layout must be top of mind. A few things to consider include:
- Establishing put walls
- Adopting different picking methods based on your new layout
- Setting up and managing packing stations nearer to your DTC sorting stations
- Integrating with shipping companies for printing labels and finding the best shipping rates for all outbound shipments with ease
- Conducting an inventory audit to establish the optimum arrangement of inventory in your hybrid warehouse
One storage system that works well in hybrid warehouses is the ABC method, where you classify and rank your inventory by turnover rates. This method uses the 80/20 model of inventory management, where Category A represents 20% of your stock, which generates 80% of your sales. As such, you’ll want to focus on placing Category A products as close to your fulfillment and shipping areas as possible.
For help with this, download Logiwa’s “ABC Inventory Analysis” template.
Warehouse Management Software in Hybrid Warehouse Facilities
Conducting B2B and DTC fulfillment in the same warehouse is possible, it just requires dedicated planning and the help of technology. A cloud-based fulfillment platform streamlines warehouse management processes for end-to-end management of both B2B and DTC operations, making it the perfect solution for managing both types simultaneously.
For both B2B and DTC warehouses, warehouse management solutions provide the visibility and control needed to lay out successful hybrid operations. Custom algorithms and AI-powered software ensure your inventory is moving as smoothly as possible and alert you when it is not. Leading ecommerce solutions even let you specify different picking processes for the various areas of your business (ex. mass picking for DTC orders and first-come first-leave picking for B2B clients), so neither your B2B or DTC processes become strained or limited by the other.
Establishing effective storage systems and placement of B2B and DTC items is just easier using functionalities of the WMS software. Using features like directed putaway, smart order allocation, automated picking and packing algorithms, mobile scanning, and live reporting all help you set up a facility for optimum efficiency and maintain a hybrid warehouse that works.
Hybrid Fulfillment and the Future of Logistics
B2B fulfillment operations are, of course, here to stay. But to stay competitive in the ever-growing world of ecommerce, it’s essential to consider the possibilities of including DTC and hybrid fulfillment. Logiwa’s CEO recently spoke with the Point of Sale podcast about hybrid warehouses and the significant role that technology will play in the days to come.
Cloud-based fulfillment software can easily integrate with your current systems and help make conducting B2B and DTC operations a breeze. It can allow you to scale your operations to meet the demands of today’s customers by optimizing and streamlining your processes to manage high-volume order processing successfully.
Implementing software tools and integrating them quickly will be key in building out a high-efficiency hybrid warehousing network. Learn how Badger Fulfillment Group maintained their B2B fulfillment operations while scaling DTC services using Logiwa’s robust WMS platform.
What are some considerations to think about for hybrid warehouses?
When thinking about your layout for a hybrid warehouse, consider the three main processes:
Can WMS software help design a practical warehouse layout for hybrid warehousing?
Yes! Using historical data on how inventory moves around your warehouse, WMS software can help you find the best layout for your hybrid warehouse that reduces bottlenecks and uses your space more efficiently.