5 Warehouse Operations Improvement Strategies That Drive ROI
Warehouse operations sit at the heart of your company's growth and reputation. Efficient warehouse operations keep:
- Your costs low
- Your customer happy
- Your brand strong
Unfortunately, when operations lack efficiency, it can affect the business dramatically. It can discredit your reputation, increase costs, and put unnecessary pressure on your teams. Therefore, it makes sense for warehouse professionals to know how to maximize operations and support business growth.
We've turned to warehouse experts for advice, and we've compiled their tips and best practice recommendations in the following articles. We've categorized their warehouse improvement strategies in 5 different areas:
- Warehousing layout and organization
- Warehousing safety
- Warehousing productivity
- Warehousing efficiency
- Tech improvements to warehousing operations
Warehousing layout and organization
Mixing different SKUs in the same location will affect productivity and cause delays. Workers are likely to struggle at the picking station when companies mix multiple SKUs in one bin location.
According to @SupplyChain247 on Twitter, the shelving layout should never contain more than one SKU per unique bin location. Indeed, when a warehouse worker faces a location with multiple SKUs, it can cause a delay of over 15 seconds per unique pick transaction. Yet, 15 seconds per item picked can cost significant delays at the end of the day when you consider that the average order will require multiple picks. Therefore, Supply Chain 24/7 recommends having a discrete pick location for every SKU.
Warehousing experts address the SKU pick location through a dedicated shelving layout. As warehouse space is expensive, it is essential to focus on arrangements that will maximize square footage, such as making the most of the vertical space—going up rather than out presents two significant advantages. Firstly, the business can keep warehousing space costs low. Secondly, SKUs pick locations move vertically, which reduces the risk of sharing the same bin location. Instead, they are in the same area in the warehouse, reducing trips during picking.
Unfortunately, warehouse unit standards can vary greatly, which is why businesses must consider the custom layout and shelving designs, http://www.biltindustries.com/custom-design-engineering/. Expert warehouse engineering and shelving designer, BILT, provides premium solutions that meet their individual clients' needs. As a result, businesses can maximize their floor plan and utilize the vertical space with shelving systems that are fit for the unique premises and requirements. Additionally, bespoke designs will also consider the space required for safety, mobility, technology, and team productivity, ensuring the warehouse can support the business goal effectively.
Warehousing safety
Warehouse accidents are frequent. While the cause is not clearly identifiable, many accidents appear to be preventable. They tend to occur in the form of:
- Trips
- Slips
- Injuries sustained while lifting heavy items
- Falls
Unfortunately, these accidents are prone to occur when warehouse workers hurry, which can contribute to ignoring basic safety procedures. It is, therefore, crucial to make safety training a priority. Warehouse employees must receive rigorous training to prevent injuries and accidents that occur through inattention and lack of care.
As Inbound Logistics notes on Twitter, https://twitter.com/ILMagazine, training is not the sole solution to reduce accidents. Creating a safe warehouse culture is instrumental in preventing injuries and incidents. The first step toward building better safety practices includes making warehouse operators and managers accountable for safety. Indeed, according to Inbound Logistics, "companies cannot accomplish a culture of safety with one or two yearly meetings." Safety must be a common effort throughout the company.
Warehouses that focus on safety must also introduce dedicated safety equipment and technology. Forklifts and hydraulic dollies are typically listed among the necessary safety equipment as they reduce risks of self-harm during lifting. Additionally, protective equipment should also include appropriate hard hats and eyewear when necessary. Yet, the warehouse safety strategy isn't complete without introducing an effective solution to handle accidents, such as a real-time location system. Indeed, with a dedicated location system using RFID technology, workers can wear a tag enabling accurate real-time location. The tag can inform the team when an employee needs immediate assistance. Combined with tags attached to items and objects inside the warehouse, the responders can easily find their way to an injured employee and understand the unique challenges of their position within the warehouse.
Warehousing productivity
The warehouse lies at the core of a complex freight network. Inbound and outbound freight can lead to significant changes in the slotting system within the warehouse. Therefore, it is essential for the business to make communication a priority. Indeed, workers can also share valuable insights about the challenges and obstacles they face as part of their jobs. Taking the time to listen through anonymous surveys, 1-2-1 meetings, and feedback collection can prove highly effective. The process will show warehouse employees that the business cares about their opinions and problems, driving motivation and engagement. Besides, the company is in a better position to organize slots and communication for optimal time management.
Warehouse professionals face challenges in an unpleasant work environment. While health and safety standards prevent warehouses from building a hazardous work environment, workers are often uncomfortable as a result of lighting, temperature, and air quality features. Indeed, keeping stock in good condition often requires working in dark, cold, or dry environments. As a result, finding ways to improve warehouse workers' comfort without affecting the unit stored can significantly affect overall productivity. Air conditioning in communal areas and away from temperature-sensitive goods can improve the experience. Soft flooring will also reduce foot soreness for workers who stand up all day. Treating the warehouse with the same care as the office can create a welcoming environment for workers. This could also include the addition of a kitchen area, a break room, and even snacks and entertainment.
Lastly, productivity requires metrics. You can't improve something you don't measure. Consequently, warehouse experts recommend defining relevant KPIs for the business, such as :
- cost per box shipped
- cost per line shipped
- cost on shipped orders
- critical productivity
- Etc.
Gaining an understanding of your KPIs and how different variables can affect the productivity in the warehouse provides businesses with the key to improvements. Indeed, incentives and communication are not sufficient to drive warehouse ROI. You need to identify issues and eliminate them to create value.
Warehousing efficiency
According to warehouse management consulting experts, warehousing has evolved dramatically from its initial purpose as good storage. Nowadays, in a globalized marketplace, lean warehouse operation practices have become indispensable to maintaining a long-term and sustainable ROI. Indeed, the warehouse operations must focus on:
- fast receiving and shipping dock management
- accurate and flexible pick and pack system
- high-level, reliable inventory management
Warehouse efficiency is crucial to cut down handling time, loading and unloading times, while increasing flexibility, adaptability to changing marketing conditions, reliability, and information sharing.
Inventory management lies at the heart of warehouse efficiency. Indeed, pick and pack methods work better with intuitive and logical inventory organization. For instance, if the warehouse organizes items by color rather than color and size, a customer may receive their item in the right color but the wrong size. Optimizing inventory organization can serve a double purpose. Firstly, it speeds up the pick and pack process, and secondly, it reduces the risks of errors, which means that customers are happy. Warehouse experts recommend running dedicated experiments in a controlled environment to monitor and introduce new inventory management strategies.
Dedicated training is instrumental in maintaining warehouse efficiency. As the business approaches new markets or stores new items, warehouse workers face significant changes in:
- Warehouse strategy
- Warehouse operations
- Warehouse technology
Yet, failure to introduce appropriate training and adoption times are likely to affect efficiency negatively.
Tech improvements to warehousing operations
According to Boston Consultant Group, 1.2 million robots will be deployed across manufacturing and warehousing operations in the United States by 2025. Indeed, robots contribute to the automation of time-consuming, repetitive processes, ensuring high productivity within the warehouse. Therefore, it can be a good idea to consider automation solutions as part of your warehousing operations.
More often than not, technology can provide a simple answer to tasks that require complex calculations. For instance, warehouse workers are faced with deciding on a picking order process. Traditionally, warehouses rely on voice-controlled systems for order picking. Unfortunately, conventional methods can affect warehouse efficiency during peaks, as there are not enough employees to catch up with the picking order instructions. Expert consultants recommend utilizing software-guiding sequential order picking processes to support the continuous workflow to employees, hence avoiding peaks and walls.
RFID tags are an essential part of the warehouse system. They can be used for safety issues, as explained earlier. But they are also integral to warehousing operations, as they enable quick and accurate localization. For instance, tracking technology can also help identify efficiency issues at different stages of the picking, packing, and shipping processes as orders move through different teams and areas. Businesses that implement RFID tracking can rapidly improve inventory, safety, efficiency, and productivity to increase their performance and ROI.
In conclusion, warehouse operations improvement is the result of tailored and strictly monitored strategies. For businesses, the key to improvement is understanding the current situation and identifying time- and cost-damaging issues that prevent return. Therefore, performance audits and metrics must become the first step of your warehouse strategy. Only then can the business move through the motion with efficiency, tech additions to the operations, productivity, safety, and organization transformations.
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