Improving Warehouse Efficiency

It is a challenge confronting warehouse managers everywhere: How can you improve your warehouse efficiency?

Some of you may wish that someone can come with a checklist to streamline warehouse operations and achieve better results. I haven’t seen any checklist; neither do I think it is a good idea. A checklist may be just the thing for aircraft maintenance to ensure the safety and integrity of an aircraft, but for a warehouse, where operations differ from company to company, it probably is not the most appropriate.
Instead, I like to suggest possible areas for warehouse managers to consider.

Reorganise bin locations

The Pareto principle, also known as the 80-20 rule, applies to most things in life, including the warehouse, i.e., 80% of the inventory turnover is derived from 20% of the total number of SKUs. As the hot items change over time, it is necessary to review and reorganise your bin locations. A well organised warehouse always outperforms one that isn’t properly organised.

The general rule – higher volume items should be stored in easily accessible locations, as close as possible to the shipping area to reduce traveling time.

Analyse picking methodology

Of all warehouse processes, order picking receives the most attention – and for good reasons.  It’s one of the most time consuming activities within the warehouse, but getting it right is vital to ensure customer satisfaction. Investing time and resources into improving it will reap immediate results.

So evaluate your picking methods. Ensure that your picking methods, whether it is single order, multi-order, batch picking or zone picking, is still appropriate for your present requirements, reduce walking within the warehouse, cluster slow moving sku’s in the same area

Invest in technology

While not everyone requires a top-notched facility, incorporating some level of automation in warehouse operation can do wonders to efficiency. Barcodes and RFID can bring about a quantum leap in inventory control and materials tracking; pick-by-voice and pick-by-light can speed up the pick process and reduce error rates; while conveyors can be integrated into zone picking areas for improved order picking with added throughput and efficiency.

Evaluate storage equipment

As storage systems evolve with a facility’s needs over time, evaluate your storage equipment to ensure proper application. New systems improving warehouse efficiency are being introduced and will quickly repay capex investment. If you are uncertain on how to go about this, seek expert advice. They can help you to identify areas within your warehouse that are underused or poorly organised.

Install enabling software

Warehouse Management System (WMS) and Enterprise Resource Planning (ERP) are the backbones of modern distribution and those who have not installed them, should seriously consider doing so.

A WMS manages the movement and storage of inventory within the warehouse. A well-designed system can help optimise your order fulfillment, enabling you to save time, effort and labour costs, and provide real-time visibility of your operations 24-7.

An ERP automates business processes across all departments, including accounting, inventory management and customer relationship management, and facilitate the flow of information between all functional areas.

Using a WMS that integrates with an ERP in real-time can ensure that inventory numbers are up to date and accurate across all systems. It also improves all aspects of the business operations, resulting in reduced inventory, improved customer service, fewer data entry errors and better compliance.

Optimise labour productivity

Since manpower is a major cost factor in warehouse operation, optimising your available workforce should be integral to any warehouse improvement effort. Cross train employees so that they can fill in for other workers during busy times or stand in for someone who is absent.

Set up performance metrics

Is it often said that you can’t improve what you haven’t measured? As metrics varies by company, managers should identify and focus on what are the most useful metrics they need to gather and apply. Pick 3 to5 clear and easily accessible metrics rather than have 10 to 20, lest you should be bogged down by the details and lose sight of the intent of the data collection.

Focus on continuous improvement

Above all undertake periodic reviews of your operation. Only through continuous process improvement can you drive productivity and efficiency in the warehouse.