3 Ways To Optimize Your Warehouse For Micro Markets

February 14, 2019


Joe Hessling, CEO of 365 Retail Markets, has predicted operators will open 9,000 more micro market locations in the U.S. industry in 2019. As the micro market sector of automatic merchandising continues to grow, one critical component of the industry – warehouse management – needs to continue developing as well.

Effectively operating a warehouse requires speed and efficiency to satisfy customers and keep a company profitable. Operators of warehouses that stock micro markets which offer fresh food or other perishable products need to be especially mindful of the art of warehouse management, especially with the extensive variety of products micro market visitors are seeking.

Three ways to tackle warehouse management are using technology to expedite processes, keeping the warehouse organized and engaging in lean inventory management.

Make good use of technology

As the 21st century advances, technology is developing in multiple industries, including automatic merchandising. Warehouse automation and tools that ensure accurate data collection can be very helpful for warehouse management.

According to the “Six Steps to Flawless Fulfillment” a 2014 report from Zebra Technologies and Supply Chain Services, having employees who are completing data warehouse inventory processes use mobile and wireless technology, such as mobile devices, cuts down on errors that can happen when data is first entered manually and then entered into a computer. Double entry of data is less efficient.

The report also explained the benefit of using automation in picking and filling orders at the warehouse using a mobile solution. It helps warehouse workers find the fastest route to the items that he or she needs for the order. It also enhances inventory accuracy by confirming for the worker that he or she has chosen the correct product and deducts it automatically from product inventory records.

LightSpeed Automation, an industry leader in warehouse automation and related technology, offers several products to assist with warehouse efficiency. The company’s product “Mobile,” a mobile warehouse system, directs warehouse employees doing picking to follow an optimized route between the items they want to pick up and provides information about the worker’s progress in easy-to-read reports for management. “FastTrack,” a pick system, uses light signals to direct personnel and enables them to easily find the correct bin location with LED displays instead of paper. “Level,” an inventory management solution, shows operators their on-hand product quantities and generates low stock alerts.

Keep the warehouse and its team organized

Keeping tasks and inventory organized can help operators be successful in the warehouse. There are various ways to keep the warehouse orderly, including designating areas for micro market products and aligning them with software.

For example, Aaron Lawton, founder of Oasis Northwest, said in a December 2018 article “Better Serving The Community” that he has his business’s warehouse set up so each item is alphabetically positioned within its category in the warehouse.

According to the October 2015 article “Get Wiser in the Warehouse,” when Smith Vending expanded to micro markets, president Rod Nester decided to designate a space of his warehouse to products the company sold in that channel. Nester also makes warehouse organization decisions, such as the arrangement of space in the warehouse, by looking at the data his company has collected.

Brad Bachtelle, president of Bachtelle and Associates, a national consulting and research firm for the foodservice industry, said in an October 2014 article that the increase in diversity of micro market products necessitates pre-kitting and giving micro market products a separate area of the warehouse apart from vending products. Having a greater variety of products for micro markets also calls for resources to track data for product sales. Therefore, it is best to have the experts of vending concentrate on vending services and management of products for vending machines while micro market experts focus on micro markets, Bachtelle argues. Allowing people to specialize in each unique market allows for greater success. Organizing the warehouse therefore also extends to effective organizational management of the people who work in the warehouse.

Engage in effective inventory control

With the greater variety of products and the ease of providing perishables in micro markets comes another challenge: how many SKUs of a given product should an operator purchase in order to please customers but also not waste perishables?

Randy Smith, former operator and CEO of LightSpeed Automation, recommended in “Get Wiser in the Warehouse” that operators starting out in micro markets launch with staple items and add new products over time.

“I’ve seen some operators offering more than 500 SKUs and then they end up with multiple products that go stale. The products just sit in the warehouse and don’t move and take up room,” Smith said. “Operators don’t necessarily have to order by the pallet anymore and that comes into play with customizing the machines and markets — you know what’s coming in and going out.”

Operators can also pay careful attention to trends in food to discover what customers will be more likely to enjoy.

According to the 2018 State of the Micro Market and Vending Industry report, the snacks, candy and confections categories made up about one-third of micro market sales in 2017, Mondelēz International offers several products in these categories, ranging from the better-for-you breakfast favorite of belVita Breakfast Biscuits to the wholesome and irresistible TEDDY GRAHAMS Honey GO-PAKS!

Buying items customers will gravitate toward and paying attention to clients’ needs can help operators make sensible purchasing decisions and limit product waste. By making smart inventory decisions, staying organized and staying up-to-date with technology, operators can make warehouse operations one of their strengths.