Oh Ship!
The Multi-Warehouse Fulfillment Dilemma
12 March, 2024 by
Oh Ship!
Kaylie Kipe

This is an SMB (Small to Midsize Business).

But this small business has big needs!

They sell physical inventory and have invested in multiple warehouses to disperse the shipping workload and deliver products to customers faster.

However, they don't know what warehouse is optimal. So how did this business just go from delivering products faster to similar (or worse) delivery times with wildly fluctuating shipping bills?

Perhaps more importantly, though: How can they reclaim their sanity and achieve their original multi-warehouse goals?

Tale as Old as Time

This is actually a very common problem that occurs for small, medium, and large businesses alike -- and it's easy to see why. If you are in a physical goods business that delivers goods directly to customers (as opposed to drop shipping), the primary way to increase speed-to-doorstep and reduce costs on one of your biggest expenses - shipping - is to place warehouses in strategic locations.

If done well, this indeed achieves both goals and can be a profit generating machine.

If done poorly, it can quickly become an expensive drain on the business, which now has the same speed-to-doorstep and shipping expenses but with the added expense of more real estate and additional employees.

Ideal Outcomes

So let's talk about how multi-warehouse fulfillment can be done well.

We'll set the stage:

  • Warehouse A is on the west coast
  • Warehouse B is on the east cost
  • Warehouse A has stock on products X, Y, and Z
  • Warehouse B has stock on products X and Y only

When a customer on the west coast purchases products X and Y, the product should come from Warehouse A.

They have stock on both items and are the closest warehouse, so the products will get there quickly and ship together (reducing shipping costs from a warehouse split).

When a customer on the east coast purchases products X and Y, their products should - for the same reason as above - come from Warehouse B.

But what if a customer on the east coast purchases products X and Z?

Well, those should come from Warehouse A.

"But it's not the closest warehouse", I hear you lament!

Agreed, but it is capable of our goals:

  • Speed-to-Doorstep: Delivering from Warehouse A is the fastest and best experience for the customer because they do not need to wait for stock to be transferred to Warehouse B before it can be shipped.
  • Lowering Shipping Costs: Warehouse A is cheapest because...
    • They (or the company overall) does not need to send the inventory to Warehouse B
    • Also Warehouse B does not need to send product X now and product Z later (two separate shipments increases shipping costs)
    • Warehouse A is not only going to deliver product Z and have Warehouse B send product X because that would be two separate shipments (which increases costs)

But Wait, There's More!

I mean, of course there is (because multi-warehouse fulfillment is multi-faceted!) but also because this should happen automatically and not involve a person clicking through each order to decide where the order should be fulfilled from. Because that's not only not how procurements in Odoo work but also because that defeats the purpose of saving time and money.

So I won't go through all permutations in this article, but rest assured that Hibou has seen and addressed many scenarios related to multi-warehouse fulfillment automation within Odoo -- and across more than two warehouses, to boot.

Some of these scenarios have been covered in Hibou's prior Odoo talks - one of which is below if you'd like to give it a gander - but each business is unique and the best way to know how your specific fulfillment needs can be addressed is a good old fashioned (Zoom) call.

With that in mind, fill out the contact form at the bottom of the page so Hibou can take you from "Oh Ship" to "Oh Sweet!"


Oh Ship!
Kaylie Kipe 12 March, 2024
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