Accurate, fast and cost-effective e-fulfillment depends upon knowing where all SKUs are located, what their individual velocities are, and then finding the best means to pick them while minimizing labor and time spent.

There is great value in e-fulfillment operations in profiling SKUs by their levels of activity – fast, medium, slow movers – and then using that data to more precisely configure and zone (or slot) the warehouse. Profiling helps to determine where and how best to store products, and can make a significant difference in turnaround time and throughput.

Hume of eSYNC points out that improperly slotted products may result in excessive traffic on conveyor lanes and worse yet, blockages on them. "You also risk starving the picking operation from replenishment."

Indeed, there can be a "ripple effect throughout the facility," adds Hume, in reduced productivity and excessive use of labor for picking.

"These kinds of problems can be addressed very easily with a software package for slotting," Hume continues. But, as he admits, "slotting software has historically been a hard sell to the end user." It's a challenge to get the user to buy into the process. And it can be difficult for the user to get demand data from customers. Yet there's nothing like "getting it right the first time before product comes into the building," Hume adds.

Short of using slotting software, says eSync's Hill, the e-fulfillment manager can use a relatively simple, computerized spreadsheet for profiling. That approach works well when there are only a few hundred SKUs to slot, says Hill.

DCs with more SKUs, however, are encouraged to try one of the more sophisticated software tools. They not only handle significant volumes of data, but also provide output that simplifies the analysis of slotting alternatives.

Managing and optimizing SKU storage locations for efficient picking is a key e-fulfillment strategy at LEGO (see sidebar below - How LEGO goes about e-commerce ). The firm uses a spreadsheet to do so, even though the SKUs for its on-line business number around 900, says Eric Elman, director, LEGO Direct Fulfillment Americas.

Similarly, profiling the top 75 fast movers at Norm Thompson Outfitters enables its distribution facility to organize these SKUs into slots along a 40-foot-long pickface for greater order selection efficiency (see sidebar far below - Designing a pure, online grocery that works )

Consultants we spoke with generally advocate selecting or picking orders in batches or waves, then sorting out the single orders from the group downstream from the picking process. Even relatively manual systems can profit from this approach.

For example, "as a step up from single order picking," says consultant Drew Hale, The Progress Group, one client picks orders in small batches. A batch for this on-line sports-oriented retailer contains six to 20 orders that can be selected in a single pass as the picker places items in a cart, and tags them for a final sort. Because this retailer's relatively small volumes of orders don't justify heavy mechanization or automation, says Hale, sorting of batched orders is done manually.

Shipping orders – the final step in e-fulfillment – is the manager's last chance to get things right and satisfy customers' high expectations. Some fall short here, however.

"One of the first places I look for cost savings that will drop down to the bottom line in e-commerce," says consultant Sedlak, "is in managing outbound carrier services." Too many startup e-fulfillment companies, he argues, "take the easy route. They commit to a single carrier." Instead, he encourages them to contract with multiple package delivery services to lower expenses.

At the very least, the e-fulfillment operation needs a good parcel manifest system to manage these multiple carrier accounts. And manifest to the right outbound carrier, Sedlak adds. More sophisticated software to oversee outbound traffic and especially to provide customers with real-time order status will likely be required as well.

Click here to read about an online grocery system. (Designing a pure, online grocery that works)