3 Steps to Improve Warehouse Efficiency

Coby Geddes
Updated on April 13, 2021

In the warehouse and supply management game, the more efficient your fulfillment process, theoretically the happier your customers will be with the bonus of lower operating costs for you.

Your original product line(s) have most likely determined your current warehouse layout. With product lines playing a pivotal role in your layout, it isn’t a far stretch to assume your warehouse layout has affected the material handling equipment you have purchased for use in your warehouse.

Changes that can impact your warehouse efficiency include:

  • Products
  • Employees
  • Workstations
  • Square footage

Every change within your warehouse can ultimately impact warehouse efficiency. Lack of efficiency can result in increased operating costs, decreased profits, and lower customer satisfaction. Time often equals money, with the lack of warehouse efficiency being disastrous for warehouses and distribution centers.

Each and every change made in your operation can have a positive or negative impact across the board.

How Lack of Efficiency Impacts Your Warehouse

Peak order fulfillment requires three core components:

  1. Accessibility
  2. Product Flow
  3. Maximized Storage

In most cases, decreased fulfillment efficiency is the result of a core component issue. And any issue or problem with one will directly impact the other two.

  • Limited accessibility will increase picking times and complicate product movement and storage.
  • Inconsistent product flow decreases workers’ productivity and can lead to packaging errors.
  • Unorganized product storage affects workplace accessibility for workers and equipment by taking up valuable floor space.

If these issues sound familiar, you may feel like your warehouse is working against you. While most companies assume that a larger space will solve all their current efficiency issues, increasing square footage often means more space for storage, accessibility, and product flow.

Unfortunately, a larger building also comes with increases in rent, utilities, and insurance. You also have moving costs and a timeline to consider. A larger workplace may require the hiring of additional employees as well.

While it may seem all is lost, there are other options, (besides relocating) to improve your fulfillment process, get your costs in check, and increase productivity.

Analyzing your current operation’s efficiency through hard data is the only way to accurately find areas that need to be improved.

Steps for Improved Warehouse Efficiency

Use the steps for improved warehouse efficiency as a foundational guide for your warehouse. These steps provide you with concrete ways to utilize your warehouse space to your advantage.

Step One: Get Your Data Together

No matter what type of WMS (Warehouse Management System) you currently have in place, it’s important to trust and follow the data. By utilizing data-driven insights, you eliminate opinions and speculation from clouding the decision-making process.

WMS systems come in all shapes, sizes, and varieties. You have basic programs that work with a limited number of SKUs, to advanced technological options like RFID (Radio Frequency Identification). Whether your WMS is a stand-alone or a component of a larger ERP (Enterprise Resource Planning) system, take advantage of the numerous reporting options available.

  • There are countless filters and options for viewing the data and drilling down to find areas for improvement.
  • These reports establish your current production levels and create benchmarks for future performance and cost comparisons.

Step Two: Go Up, Not Out

The next logical step is to maximize usable warehouse space. Factors to consider include the building’s construction, total square footage, and volume to determine the best solution(s) for your warehouse.

A mezzanine can double your square footage and be used for storage, offices and more. (Pictured: top of mezzanine)

Step Two: Go Up, Not Out

Vertical storage systems can free up limited floor space for improved accessibility, flow, and safety.

Vertical benefits include ease of assembly and configuration, providing a fast and economical storage solution for many companies.

  • Vertical storage systems can free up limited floor space for improved accessibility, flow, and safety.

Some racking systems can be stacked (up to a maximum of nearly 40’) to utilize the high roof heights typically found in a warehouse. A vertical solution can make seasonal or excess inventory more manageable and easily accessible.

Add Interior Square Footage

You can effectively double your square footage by installing a mezzanine system in your warehouse. Warehouse mezzanine systems are raised platforms/free-standing structures used to utilize space for inventory or increase storage.

The extra space created can be used to:

  • Create new office space
  • Add workstations and employees
  • Increase inventory storage or organization
  • Improve accessibility for equipment and employees
  • Maximize product flow through the warehouse

Mezzanine projects often have code requirements and building permits. Check with your local ordinances before starting a mezzanine project.

Get the Right Equipment

Maximize product flow with the proper material handling equipment. Using material handling equipment specifically chosen for your warehouse and layout can increase your warehouse efficiency.

Regular cleaning and maintenance will keep your equipment working at peak efficiency.

There are many equipment options to consider when looking to improve the efficiency of your warehouse or distribution center.

Step Three: Warehouse Audits

Unlike WMS “reports,” which provide a snapshot of the last week, month, or quarter, an audit looks at the entire fulfillment process from start to finish.

Maximum accessibility, product flow, and storage should always be the end goal of every warehouse audit. From the moment new inventory arrives until the product leaves the building, every step of the fulfillment process should be analyzed.

Through warehouse audits, you can:

  • Correctly modify your existing process
  • Or develop a new fulfillment process

To minimize costs and increase efficiency. Many companies are hesitant to perform a fulfillment audit because of the time and energy involved.

Why Warehouse Audits Matter for Efficiency

Perhaps the most overlooked benefit of an audit is that the results provide you with a plan to improve your warehouse efficiency. You may not need to make changes immediately, but you can begin to consider the costs and timelines required for future changes and enhances efficiency.

One of the major misconceptions with warehouse audits has to do with new equipment. Not every audit will suggest a warehouse full of new equipment. Often, a series of small changes, or updating a piece of equipment or two, is the only thing necessary to improve efficiency. Regardless, until an audit is enacted, there is no way of knowing what is needed to improve your warehouse efficiency.

Warehouse Efficiency Can Affect Your Bottom Line

Make sure your warehouse runs efficiently by following our 3-step process. Minimize operating costs and maximize profits by utilizing data, utilizing vertical storage, and performing warehouse audits.

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