7 Quick Ways to Instantly Boost Warehouse Efficiency
The success of a company does not rest solely on how well the front-end operates. In fact, the storefront relies on back-end processes for the resources and labor required to complete tasks and transactions. Therefore, if operations behind-the-scenes are inefficient, businesses can lose time and money.
By improving warehouse efficiency, companies can enhance workflow, streamline processes, improve productivity, and enhance supply chain management. However, there are several approaches warehouse management can take, requiring companies to determine which best suits their operations.
7 Ways to Promote Warehouse Efficiency
A business does not need a large budget to improve warehouse efficiency. Management just needs to understand how to maximize the usage of their existing resources. Companies can lower warehouse costs and improve efficiency by-
1. Optimizing Warehouse Storage Space
As businesses expand their sales channels to online platforms, warehouses need to discover how to optimize storage space to house larger volumes of inventory. In addition to serving more customers, studies show consumers demand more item options. This means warehouse managers also need to determine where to store product variances, such as different colors and sizes.
While enterprises with money to spare can purchase additional warehouses, some facilities can cost over $300,000. This is not feasible for small businesses with restricted budgets.
Therefore, management should focus their efforts on maximizing the storage that they have by taking advantage of vertical space in the warehouse layout. Implementing shelving units adds a significant amount of extra space to store goods while clearing aisleways.
By maximizing space and creating an organized work area-
- Employees can streamline stocking and order fulfillment.
- Machine operators can easily navigate equipment through aisles.
- Employees can minimize travel time within the warehouse.
- Companies can improve warehouse safety.
Optimizing warehouse space not only enables businesses to hold more inventory but improves workflow and productivity as well.
2. Offering Customer Pickup and Delivery Options
Much of the burden of housing inventory falls on warehouses. However, companies can disperse products by shifting the load to retailers and warehouse distribution centers by offering in-store pickup and delivery options. Target offers these options to customers and revealed 15% of their online purchases are now pick-up orders.
Even retailers that do not have brick-and-mortar storefronts can offer products through online platforms that handle delivery. Amazon, for example, allows retailers to sell, store, and deliver their goods through its fulfillment centers. Amazon has even introduced lockers where customers can pick up their orders at a distribution center instead of waiting on delivery.
By offering the option for customer pickup and delivery, warehouses can significantly reduce their operation costs and filter in more products.
3. Improving Picking and Stocking Routes Within the Warehouse
One of the most significant drains of time and resources within warehouses is the picking and stocking process. If employees are unable to quickly locate where to stock or find a product, order fulfillment and sequential warehouse operations are delayed. A study shows that order picking accounts for approximately 60% of all warehouse labor costs.
However, businesses can reduce costs by improving their warehouse picking and stocking routes. With proper management systems, the locations of each product and its variances are recorded for employee reference to streamline order fulfillment and unloading deliveries. This minimizes the travel time between locating and retrieving items, saving time and labor costs.
4. Upgrading Warehouse Mobile Technology
By implementing a warehouse management system and utilizing mobile technology, warehouse employees can streamline repetitive processes, such as cycle counts, access real-time data, and measure warehouse performance. While most workers assume mobile technology refers to barcode scanners, companies can also utilize portable devices, including tablets and smartphones, to optimize inventory control.
Handheld devices allow employees to connect wirelessly to the internet so they can move about the warehouse freely and increase warehouse efficiency. With portable scanners, management can register products from their barcodes, reducing picking errors by up to 67% and optimizing inventory accuracy. This minimizes the consequences of inaccurate order fulfillment, such as refunds, product returns, and decreased customer satisfaction.
5. Creating an Inventory Management Process
Even though companies have increased their sales by innovating their customer reach, many warehouses still hold excessive amounts of products on hand.
A study shows that the number of goods stored on-site based on daily sales has increased by 8.3% over the last five years. Storing items with low turnover rates takes up valuable warehouse space, increasing storage costs and restricting a business's ability to store high-profit inventory.
By establishing an inventory management process, warehouses can access key performance indicators (KPIs), which determines each product's performance level. These metrics also define-
- Average Daily Sales
- Inventory Turnover Rate
- Return on Investment (ROI)
- Profit Margins
- Bottom Line
- Average Days to Sell
By identifying and purging items that take up space and drain profits, warehouses can introduce newer products with higher customer demand.
6. Regularly Auditing Workflows
Product activity should be monitored from the time an item enters a warehouse to the final delivery, establishing a standardized workflow. This enables management to track all inventory to ensure all supply chain phases are completed accurately and efficiently. Otherwise, substandard systems can disrupt proceeding operations, costing time and resources.
Establishing standard processes and management software allows managers to audit employee performance to determine if they are reaching optimal productivity. Regular audits also define inefficiencies within the warehouse so management can quickly correct the issue. Once changes are implemented, additional audits can determine if the workflow has improved or remained constant.
7. Automating the Picking Process
Enterprises with multiple warehouses may need to find better means to optimize the picking process beyond manual methods. By automating the picking process, companies can increase their warehouse performance to nearly 300 pieces per hour. This more than triples the amount manual picking yields.
Automation can entail conveyor belts, sorters, and even warehouse robots that transport, group, and retrieve items. However, warehouse automation often requires a complete digital transformation, which can be costly. Therefore, organizations should determine if their expansion efforts and budget call for this update.
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