12 Ways to Improve Warehouse Efficiency

An efficient warehouse saves money, space, and more. For today’s warehouse operators, capacity and quality top the list of priorities, according to Material Handling & Logistics. They’re prioritizing their top five metrics as follows:

  1. Order Picking Accuracy (percent by order)
  2. Average Warehouse Capacity Used
  3. Peak Warehouse Capacity Used
  4. On-time Shipments
  5. Inventory Count Accuracy by Location

By creating and maintaining an efficient warehouse, warehouse operators can hit their goals for these metrics and keep their customers and employees happy.

12 Ways to Improve Warehouse Efficiency

The importance of warehouse efficiency – and its impact on your bottom line – cannot be stressed. Here are 12 ways you can begin improving warehouse efficiency and productivity. Some are easy to implement, and some can cost money, but all can help get your operation running like a well-oiled machine.

1. Choose the Right Containers

The right containers are key to housing your products so you should always research and assess your needs before selecting them. You want them to be easy to load your products into, fitting well without any wasted space. Of course, different types of inventory often require different containers. For example, if you’re shipping food products, you’ll need an appropriate container that meets specific regulations.

2. Choose the Right Pallets

Different pallets have different strengths and weaknesses. Selecting the right type of pallets can make the transportation and storage of goods a lot easier. Here’s three common types of pallets:

  • Metal pallets. Highly durable and long lasting, and able to withstand high heat and corrosive materials. This makes them ideal for pharmaceutical warehouses.
  • Plastic pallets. Light, durable, and very affordable.
  • Wooden pallets. Recyclable and very versatile, with many shapes and designs.

You’ll also want to consider how you’re going to be using the pallets. Will that be moved by a pallet jack or forklift? Will they be housed on the ground or up in the racking? Can they accommodate the weight of your inventory?

3. Optimize Racking

Are you making the most of your warehouse space? How about vertical space? Instead of expanding your square footage, you might consider adding taller storage units and the right equipment to pick and store material can help you keep more in the same square footage, rather than adding expansion costs. 

When choosing racking, size, strength, and accessibility all need to be taken into consideration so it’s important to understand the different types of racking available. If you move a lot of small items, use flow racks; for larger items, try cantilever or pallet racks. Of course, you also want your racking to be scalable, so there should be options for enlargements as your business grows. This is much more efficient and cost-effective than replacing the entire racking system when you outgrow it.

4. Keep Up With Technology

Even if you’re not very tech savvy, the latest equipment can transform your business into a high efficiency warehouse. For example, a quality warehouse management system (WMS) can really streamline operations by helping ensure that goods and materials move along in the most efficient and cost-effective way. It does this by keeping an eye on warehouse design, inventory tracking, picking and packing goods, receiving and put-away, shipping, labor management, yard and dock management, and reporting. 

Using an on-premise legacy program, or “standalone WMS software”? These systems often require a lot more manual work and are prone to problems. Cloud-based solutions are considered the best type of WMS for just about any business so it’s worth looking into one.

There are many other cool warehouse technologies available. For example, you could implement voice-enabled technology. Using headphones, these systems direct order pickers where to go, what to pick, and where to deliver it; it’s much more efficient than having them spend time reading order sheets or taking verbal direction from a manager. 

5. Get Automated

Smaller operations can function well enough with manual pickers, but as your warehouse grows, this approach can impact productivity. Consider this: The average order picker can pick 60-80 products per hour when routes are optimized; this rate can be increased to about 300 pieces per hour when using automation, such as sorters and conveyors.

While there are costs associated with adding automation, the order picking productivity will eventually pay for itself. In fact, according to Robotics Business Review, automated and efficient warehouses are 76% more likely to boost inventory accuracy to 99% or higher, 36% more likely to have reduced labor costs an average of 3% per year, and 40% more likely to consistently ship within one day of an order's placement.

Standardize Workflows

Every activity and process for moving product within the warehouse – from the time it comes in to the time it goes out – should have an established workflow. Without one, employees may simply work in a way that is more efficient for them, but not most efficient for the company.

Automated workflows help ensure that every employee works within the same standards. It also helps you to better monitor individual employee performance against benchmarks established for that segment of the workflow. That way, when fulfillment issues arise, a quick audit can often uncover the workflow bottleneck and corrective action can be taken.

Go Lean

Often associated with manufacturing, lean inventory can also help with improving operational efficiency in your warehouse. The basic premise of lean is to procure only what you need and nothing more. That means getting suppliers to deliver smaller quantities more frequently and reducing safety stocks. This frees up warehouse space and makes it easier for pickers to find what they need. It also reduced the chances of being stuck with unused and/or outdated inventory.

Use Proper Packaging

There are many types of packaging available to warehouse facilities. However, not all packaging is created equally and you’ll need to weigh the pros and cons of each. If you use the wrong type of packaging for particular products, it can result in damaged products (which will ultimately be returned and have to be dealt with), spoiled product if shipping perishables, or incurring extra costs with carriers. To find out which packaging is right for your varieties of good, check out our blog on 12 common types of packaging.

Keep Employees Motivated

Warehouse work is not easy, and hiring and retaining a qualified workforce can be a challenge. According to Westernacher Consulting, more than 40% of warehouse managers reported that an inability to attract and retain a quality hourly workforce was one of their top concerns. 

To keep employees motivated, you may want to consider incentive pay. This gives them the opportunity to collect more money on payday and lets them know you appreciate their efforts. Another easy yet effective motivational method is to offer prizes or a free staff lunch if weekly, monthly, or quarterly goals are reached. And of course, offering regular pay raises to employees who work hard is a big motivator (it can also save you money over the long-term versus losing a hard worker and having to train a new hire).

Be Safe

Unfortunately, warehouses have high rates of injury (about 1 in 20). The U.S. Bureau of Labor Statistics also reports that the rate of recordable illness and injury cases in the warehousing and storage sector is 5.1 out of every 100 workers. If an employee gets injured, it can derail your whole operation; they are unable to work, and employee morale goes down. 

So, be sure to make safety a priority. Leadership needs to fully investigate every incident and employees need to be made to feel comfortable bringing up any hazards they may notice. A plan for the injured employee’s return to work should also be put into place, such as starting out on light duties and progressively moving to more demanding tasks until they are back on their normal workload.

Use a Fulfillment Center

Maybe you’d rather not be in the warehousing business after all! Then consider using a third-party logistics (3PL) fulfillment center. A fulfillment center handles the warehousing, picking, packing, and shipping of your products, along with returns management, customer service, and more. Some of the primary benefits they offer eCommerce businesses include:

  • Cost Savings. With a 3PL, the need for space—and the cost to rent or maintain it, along with overhead expenses—can be eliminated or reduced. When it comes to shipping, 3PLs also have relationships with carriers which results in discounted pricing.
  • Experience. Logistics are the speciality of a 3PL. By using one, you can tap into the knowledge of their experts and take advantage of the latest software and equipment that they’re utilizing. 
  • Global Reach. Some eCommerce businesses feel bound by their location and remain local or national, unsure of international rules and regulations. Many 3PLs have a global reach, allowing businesses to bring their brand to a global audience. 
  • Customer Service. Being able to handle returns, exchanges, and refunds is just as important as selling a product and a 3PL has the staff to do this.
  • Scalability. As your business grows, space can become an issue and fulfilling orders fast enough can become difficult, resulting in shipping delays and disappointed customers. A 3PL can handle your inventory as you grow, housing and shipping it from one or multiple locations.

Not only do we provide cost savings, experience, reach, customer service, and scalability, we also offer customized packaging solutions and an unbeatable, proprietary Global Fulfillment Software (GFS™). It easily integrates your eCommerce platform, and then you can begin to manage inventory, track orders, customize packages, and much more.

To learn more about how we can help your eCommerce business boost efficiency and improve its customer experience as your end-to-end fulfillment partner, contact us today!

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