How to Optimize Warehouse Operations

A stable and viable warehouse operation lies at the heart of any successful retail business. It has a huge impact on the future of a company. Warehousing is essentially an inventory storage process. The main goals are to make sure that the items placed in storage remain in good condition and that they can be easily found and accessed by the warehouse workers so they can send them to stores, smaller warehouses or customers.

Companies with a limited budget such as startups or small retailers will usually use a storeroom instead a warehouse but larger companies, due to the size of their inventory, will typically rent buildings with ample space designed specifically for this purpose. Opportunities for warehouse optimization begin when the inventory is brought in for storage and continue to the last stage when the inventory leaves the warehouse.

Warehouse management requires:

• Organizing the warehouse layout

• Organizing the inventory

• Buying the necessary equipment

• Maintaining the equipment

• Picking, packing and sending out the orders

• Monitoring operational performance

• Addressing areas that could be improved

Warehouse managers are chiefly concerned with maximizing safety and productivity. To achieve this goal, they make use of automation, optimal workflows and efficient distribution of resources (space, time, and workforce).  

Because warehouses are such large and complex operation, it can be difficult to know what initiatives will yield the highest return on investment.

Warehouse Layout

Having a functional layout is a key aspect of warehouse optimization. The goal is to make the most of the space you have by allocating enough room both for the inventory and the workers who need to perform their daily tasks.

Warehouses are organized in different areas with different functions such as receiving inventory, processing the new items by unpacking and booking them. Warehouses also have offices, the main storage area and another area for excess or obsolete inventory. Lastly, you will need a place where the workers pack the items that will be shipped out and a shipping station.

The best way to find the most efficient layout is to sketch several options to scale using a grid system. Once again, note that the goals are to find a balance between storing as much inventory as possible, while also leaving enough free room so that the workers can pick out the items from the aisles quickly and easily in order to maintain safety and productivity.

Warehouse Labelling

Without proper labelling, you can't have an efficient warehouse. The lever of productivity depends largely on how long it takes your pickers to find items on the shelves. To reduce this time, they'll need to receive a precise location.

The easiest and also the most intuitive way of labelling locations in a warehouse is though alphanumeric combinations. The complexity of the labelling system will depend on the size of the warehouse. For instance, for a small to medium-sized warehouse, you label the rows shelves and bins so that X item can be found on row A, shelf B, bin 3. For bigger warehouses, an item's location could sound something like area 1, row C2, row area RA3, shelf B, bin 2.

Arranging and Rearranging Warehouse Inventory  

Once you've sorted out the optimal layout and labelling system, you can move on to arranging your inventory. At any given time, a small percentage of the product you store will cover the highest number of shipment requests so, to increase productivity, you'll want to place those items closer to the packing desk.

There are many software programs you can use that will analyze which items get the most requests so you can plan the inventory arrangement accordingly. There will also be items that are often shipped together, so it makes sense to place them in close proximity.

You'll have to rearrange the inventory on a regular basis which might sound like a hassle, but it saves you time in the long run. For example, the requests for items will differ according to the season or according to special offers.

Handling New Inventory

Another stage of the process that you should pay attention to is how you handle new inventory. This stage involves several steps: receiving the inventory, unpacking it, booking it and putting it away on the shelves. The faster you can go through these steps, the faster the inventory will become available for shipments. But speed has to be balanced with accuracy because any mistakes will propagate through the supply chain.

You'll need to optimize the area where you can receive and store the new inventory temporarily without it getting damaged. After this step, the new inventory has to be recorded and inspector for packaging issues and damage. You'll need to allocate some of your team members to perform these tasks.

After the new inventory has been checked, it can be labelled and stored at the optimal location according to the predicted priority in terms of requests. Once this is done, you just have to make sure that the inventory is updated so the pickers can find the new items and take them to the packing desk.

Staff Training

Hiring the right people is always important, but it's just one piece of the puzzle. To maintain efficiency and avoid safety issues, you'll need to make sure your staff members get regular training sessions. You could invest in the best equipment and brainstorm until you come up with the most exemplary protocols. You won't get the results you're hoping for if your employees don't know how to work with them.

Ideally, training sessions should take place on-site and last between 45 and 60 minutes. A conversational approach has been shown to lead to better understanding and retention than lectures.

When it comes to safety, there are a number of risks you should be mindful of such as trips, slips and falls. Your employees can also get injured while lifting. These accidents usually happen because speed is prioritized over safety procedures.

Forklift training is also extremely important. Even though forklift accidents constitute only a small fraction of total warehouse accidents, they're responsible for around 10% of serious injuries. Though forklift training sessions, your staff members can learn how to safely operate the vehicle and what visibility limitations they should anticipate. Furthermore, they'll learn techniques to keep the forklift stable and handle damaged pallets, liquids, loose materials, low weight or bulky items.

Last but now least, we recommend cross-training. The warehouse market is very competitive, considering the labour shortage and high turnover rate. Cross-training will allow you to avoid productivity issues caused by workers taking time off or quitting.