The formula for productive warehouse operations comprises the workforce, customer ordering and inventory. However, even with these three elements aligned and steering multiple functions, it’s possible to overlook opportunities for growth and efficiency.
Facility managers must untangle the current procedures and operations to target solutions for optimized warehousing. Here are nine easy ways they can improve warehouse efficiency.
1. Measure Performance
It’s critical to comprehensively understand internal business processes relating to individual warehouses, their competitors and the industry as a whole. Insights enable facility managers to measure labor execution and set criteria for growth and profitability.
Setting and tracking key performance indicators (KPIs) for teams will help determine current efficiency levels and shortcomings. Facility managers can then use these insights to design the right solutions for enhancing procedures.
Additionally, aligning a warehouse business model against competitors — from performance to competitive pricing — is a practical way to assess workflow and find ways to reduce internal and customer costs.
2. Gain Industry Insights
Awareness of the ever-changing landscape and technological advancements within the warehouse industry is crucial for staying ahead. For instance, labor shortages have plagued industries since COVID-19 delivered an onslaught of restrictions and lockdowns.
Recent reports on warehouse labor indicate that 73% of industrial businesses have problems attracting talent amid a 58% increase in fulfillment volume.
Further, whereas a 43% surge in e-commerce sales fueled growth in the warehouse market in 2020, rising inflation and fewer customer purchases have infiltrated a downward market spiral.
Industry trends constantly fluctuate, so facility managers should be aware of potential inventory and supply chain issues and the latest technologies to ease consequent pressures.
3. Maximize Storage Space
Storage is integral to warehouse efficiency. However, facility managers often face challenges regarding maintaining stock-keeping units (SKUs) and inventory flow throughout different areas.
Unfortunately, space is limited for those who wish to expand. According to recent insights by commercial real estate company JLL, the warehouse vacancy rate reached a low of 3.3% in 2022’s third quarter for the seventh consecutive time. The findings suggest another 1 billion feet is needed by 2025 to keep up with the demand.
Therefore, redesigning the layout can maximize storage and access efficiencies. Some considerations might include the following:
- Optimizing single-story storage to save time and effort in selecting items
- Implementing a racking system to store inventory vertically
- Streamlining product flow to be received, stored and shipped from one end of the building to the other
- Improving safety by moving inventory away from hazardous areas
- Integrating proper equipment to enhance productivity and reduce damaged items
Warehouse managers should also consider eliminating “dead” inventory to create additional space and revenue. Experts say that 20%-30% of warehouse stock is obsolete, and holding it could cost facilities 15% or more. By removing outdated goods, warehouses can make room for active inventory, improve operations and reduce costs.
4. Organize the Workplace
Optimizing storage paves the way for greater workplace organization. For example, lean inventory guarantees the bare minimum, such as smaller stock quantities and less disarray.
Maintaining an organized workstation also improves efficiency by ensuring workers have easy access to the necessary tools and equipment. Likewise, renting large equipment might be more conducive to meeting increased seasonal demands while saving space in year-round storage.
Focusing on organization helps reduce clutter and human error while improving worker safety and performance.
5. Integrate a Warehouse Management System
Facility managers can improve efficiency by integrating a warehouse management system (WMS). Although some directors might be wary of the costs, WMS software almost always proves worthy of the investment.
A WMS is a modern business technology tool that increases and measures effective operational processes, from maintaining SKUs to payroll and other daily functions. A WMS might also offer suggestions for inventory replenishment and ensure timely order completion.
Managers can utilize these tools as standalone solutions or integrate them with other innovative management applications for smoother operations and greater warehouse control.
6. Upgrade Technologies
While deciding whether to purchase a WMS, facility managers should upgrade existing technologies.
For example, warehouse robotics use the latest artificial intelligence (AI) to perform everyday inventory management tasks, such as pulling items, examining commodities and moving heavy pallets with minimal human interactions. These complex robotics help pick up the slack in short-staffed facilities.
The adoption of automated warehouse robotics is rising, with research pointing to 4 million installations at 50,000 warehouses by 2025.
Additionally, real-time location systems (RTLSs) have been around for years, but significant advancements have improved their practicality in warehouse settings.
Facility managers should also consider upgrading to radioactive-frequency identification (RFID) for optimal warehouse efficiency. RFID readers use barcodes to track inventory in real-time without needing someone to scan it or move it through a reader portal.
7. Track Inbound and Outbound Freight
Delivery and dispatch procedures are vital to warehousing, but tracking inbound and outbound freight can increase accuracy even more.
Developing a service level agreement (SLA) with suppliers can help managers better schedule deliveries and meet compliance requirements. A similar process can streamline outbound freight for item turnaround.
Freight tracking is an excellent way for warehouse operators to respond to clients, load delays and product issues with the utmost customer service and transparency.
8. Provide Additional Management Training
The ability to increase warehouse efficiency takes specialized skills and expertise. As such, ongoing management training is beneficial to enhancing operatives.
There are numerous components of warehouse management. If one aspect does not meet expected standards of excellence, there’s a greater chance that disruptions will negatively impact fulfillment orders, expenditures and worker morale.
Ensuring managers have the proper tools and resources to manage their teams is conducive to perfecting the business model. Ongoing training might cover the interdepartmental intricacies of warehouse operations, including establishing communication and collaboration and understanding contractual agreements with customers and contractors.
9. Offer Incentives
Incentivizing pay and other benefits positively affects workplace performance — the most effective way to boost productivity and encourage growth.
Offering employees ongoing training will help them perfect their responsibilities and gain greater confidence. Issuing a rewards system or bonus can also foster competence and innovation in employees.
Competitive pay and professional development matter to workers across all industries. Facility managers shouldn’t overlook the needs of those on the ground.
Common Sense Techniques Improve Warehouse Efficiency Best
Many efficiency strategies for optimal warehouse operations are no-brainers. Concentrating on internal business processes and streamlining storage and organization are just as crucial as integrating modern tools.
Emily Newton is an industrial journalist. As Editor-in-Chief of Revolutionized, she regularly covers how technology is changing the industry.