According to the Market Share Analysis and Data for 2021–2022, warehouse management is the second-most important inventory management technique, accounting for nearly 50% of all inventory management practices. Effective warehouse management increases the efficiency of a business, transforming it into a proficient machine that maximizes profits and minimizes costs. Whether it’s a manufacturer, wholesaler, retailer, or distributor, warehouse operations have a substantial influence on business processes. On the other hand, poor warehouse management costs your business in every aspect—missed sales, lost customers, and ultimately a depleted bottom line.
Poor warehouse management can be caused by a variety of things, including:
Inability to maintain adequate inventory levels.
Inadequate storage facilities and procedures.
Lack of proper inventory control systems.
The only way to maintain an optimal warehouse operation in the face of these obstacles is to establish flexible and scalable processes that adhere to an industry’s best practices. This article focuses mainly on the five tactics that enable a warehouse to overcome these inefficiencies and achieve optimal performance.
1. Implementing a warehouse management system (WMS)
A recent study by Industry Today found that around 83% of warehouses are not optimized for their tasks. This clearly indicates that, without a proper warehouse management system in place, there is a waste of time, money, and resources on inefficient manual data entry and inventory tracking methods.
Warehouse management systems can help companies optimize their warehouses by finding inefficiencies and suggesting solutions before they arise. A WMS is one of the most important investments for any company that handles inventory and has multiple warehouses. A WMS can automate a lot of manual processes, such as picking, packing, and shipping. This can lead to increased productivity and more time for other tasks, like customer service.
Companies can find it hard to decide which WMS to use because there are plenty of options available on the market. However, it is essential to remember that not all systems are created equal. A good WMS will provide everything a business requires and will be specifically tuned to its needs.
2. Designing your warehouse layout for optimized performance
Proper spacing is the first step in achieving effective warehouse operations. Adequate spacing allows for maximizing production while minimizing costs, reduces the time spent moving products around the warehouse, and ensures all goods are easily accessible for picking and packing operations. Therefore, the key to designing the ideal warehouse is to make the most of the inventory already on hand, meet crucial requirements, and make accommodation for desired needs.
The factors listed below must be considered when designing an efficient warehouse layout:
Location of the warehouse: It must be close to suppliers and consumers to avoid wasting time and money on transportation.
Warehouse’s build: This should be organized per its function. For example, the floor and ceiling should be durable if it holds large objects.
Open or closed storage system: Businesses need to decide the type of storage system for storing their inventory. Open systems are cheaper than closed systems, but closed systems make tracking easier. Also, special care must be given to items that require careful attention, such as hazardous materials and explosives.
Picking station: Businesses must determine if they want a picking station inside or outside the warehouse. Inside requires less travel, while outside poses challenges such as goods safety, travel time, and maintenance costs.
Deciding on a warehouse layout may seem scientific. Still, it comes down to your current demands, long-term goals, and how the warehouse should be organized to fulfill your business needs.
3. Optimizing the picking process for greater precision
The process of picking items from a warehouse is a tedious task. According to studies, a single picking error can affect an order’s profitability by as much as 13%. This is particularly true for an ecommerce store that only sells products online. Picking mistakes include sending the incorrect item, the incorrect bundles, and the incorrect item color or size. By streamlining the warehouse picking process, which includes selecting the appropriate type and employing the proper picking strategy, it can be made more efficient.
There are four types of picking in a warehouse:
Order picking: This entails scanning and placing each item on a cart or conveyor belt. Order pickers are excellent at discovering goods quickly and easily.
Cluster picking: Products can be picked in batches when grouped by type. Cluster pickers prefer to pick from one shelf location at a time.
Zone picking: This is preferred when things are organized by size or weight to make them easier to find. Zone pickers can quickly find and retrieve items without walking up and down aisles.
Wave picking: Wave pickers are utilized when items and personnel are arranged into waves covering a full section or row.
4. Prioritize your goals for efficient warehouse operations
Setting warehouse goals is one of the most crucial things in warehouse management. With goals, it’s easier to measure warehouse performance and gauge if the company is progressing toward its objectives and improving its bottom line. Successful warehouses know their goals inside and out and ensure they run efficiently. These goals go beyond just making the most of the space in the warehouse. They also include improving warehouse production and efficiency, inventory management, and costs.
The following are some of the most important goals the warehouse must accomplish to keep a business running smoothly:
Storage facility: Business surplus is stored in warehouses. As it entails keeping items until consumption, capacity planning and selecting the correct warehouse according to business needs are crucial to understanding space usage.
Simple inventory access: Warehouse management aims to locate items quickly. Optimizing warehouse logistics management helps companies coordinate complicated procedures.
Improved security: Safety is paramount to reducing losses and operational costs. Companies must focus on installing cameras, yard patrols, real-time warnings, etc., to stop theft and vandalism.
Cost-effectiveness: Well-managed warehouses cut corporate costs and enhance productivity. Businesses must focus on regular inventory audits and adequate product transportation to speed up production.
Superior risk management: This helps companies avoid risks and accidents. Modern warehouses must have efficient workers to care for items and goods since they must take preventative actions.
Reduced human error: Warehouses must focus on employing logistics automation to reduce human errors, which are a major source of corporate vulnerability.
Eventually, warehouse goals help ensure inventory is well managed, that employees are getting the most out of their work, and that customers are happy with how orders are processed. With clear objectives, there is a better understanding of what to expect from your warehouse, leading to improved performance in all areas.
5. Utilizing barcodes and RFID for accurate inventory tracking
Technology is the driving force behind how a warehouse works. It is crucial for reducing mistakes, increasing efficiency, making things more organized, and facilitating smoother operations.
Barcoding is one of the most widely used and efficient inventory tracking technologies. They are utilized in numerous industries, including retail, fast-moving consumer goods (FMCG), and the pharmaceutical industry. They expedite inventory checks, provide more accurate inventory counts, and increase workplace productivity. For example, when an item is shipped from one warehouse to another, the barcode will be scanned at the receiving end. The scanner will then send this information back to the sender’s warehouse management system, which will update its records accordingly. Thus, they are an effective inventory tracking tool because of their durability and low implementation cost.
RFID (radio frequency identification) sensor systems are one of the most important technologies used in warehouses and distribution centers today. They are efficient tracking devices, helping identify items that are out of stock and need to be reordered. With an RFID reader built into a mobile device, staff can quickly and easily scan asset tags. On the other hand, employees utilizing regular barcode labels would need to position a barcode scanner directly in front of the tag for an accurate scan.
A warehouse is the heart of any business. It is where inventory is stored, processed, and shipped to customers. One of the key indicators of a company’s success is its ability to handle warehouse operations properly. Following these five strategies can help you manage your warehouse more effectively. Creating a warehouse goal, structuring your layout, enhancing the picking process, maintaining accurate tracking of warehouse operations, and incorporating automation technologies such as a WMS will help you stay on top of warehouse processes. Finally, a well-run warehouse can help you save costs, be more efficient, and provide better customer service when used effectively.