Efficiency in the management of warehouse facilities, inventories and technologies mark strong elements of any successful distribution company. Productivity and management of these processes contain a significant implication to an entire business network especially client experience with your brand and services. Warehouse activities are labor-intensive, which makes the cost driver for the business. Proper utilization of this unit by retailers has enabled them to maximize profits earned from the warehouses. It mesmerizes how little tweaks on warehouse processes hugely impacts the efficiency and therefore directly on the company’s bottom line. Nevertheless, a good number of firms never regard making required adjustments to advance their chain processes. The following five tips are noble to enable companies to improve efficiency in management.
1- Utilize and Optimize the Entire Space Available Properly
This option will cut any need for further expanding the footprint of your warehouse; hence maximizing usage of vertical space is primary to achieve it. Building taller storage units and putting in place right equipment to pick and store items will enable you to keep more material on the same square footage than expanding the structure for additional space. Also, consider harnessing variety and type of shelving to have everything appropriately arranged since storing small stuff on pallet racks will waste a lot of space. A need of a wide range of shelf sizes for different materials is inevitable.
2- Install Enabling New Technology
Adopting appropriate technology systems will help you reduce the extra labor needed avoiding more expenditure allowing greater warehouse inventory visibility and accountability. Warehouse management system (WMS) or any ERP system with inbuilt strong WMS module will boost efficiency as it will guide on the best routes and techniques for picking or put-away. This system will also offer automated pick lists required configured in a way that can be sent to mobile readers and devices allowing you to bar mistakes and minimize waste of time and paper. Hence your warehouse will be clean and neat. Installing barcode or radio frequency identification readers will boost accuracy in transactions eliminating any possible picking errors.
3- Set Up Workstations
Organizing workstations in warehouses will improve productivity because employees will not have to search for tools and equipment. Embracing the 5S technique from the lean production will ensure all workstations are as orderly as possible. The 5S method is composed of: Sort; Setting in order, Standardize, and sustain. All these techniques were developed to make sure clutter is kept at bay, reduced errors, and promote safety and organization in a company.
4- Hone Labor Efficiency
If the WMS used cannot generate picking plans effectively, then you can create them manually. To optimize this method, evaluate material usage patterns and place large items together near the main exit of the warehouse to improve convenience. Store items that are frequently sold closely, doing this will streamline warehouse operations by strengthening convenience, as you will be able to pick most accessible locations without any picking delays.
5- Evaluate Warehouse Performance
It is indisputable that you cannot manage something you cannot measure. After you have defined and implemented the required processes and technologies, there is a need to evaluate their functionality and progress to ensure whether they are adding value to your warehouse ‘general productivity. Below is a list of a few warehouse performance metrics that retailers should monitor keenly.
- The Order Fill Rate: marks the number of items ordered by clients compared to the items shipped. Successful businesses should have a fill rate, which is at least 98%.
- On-Time delivery to the customer: is the percentage of the total orders shipped multiplied by the requested or shipment defined date. Top in breed organizations always maintains over 97% of all on-time shipment rates.
- The warehouse capacity: leading businesses have not less than 95% of their storage space packed with products of peak seasons and 91% on the average warehouse capacity in totality.
- Order picking efficiency: this is the percentage of orders picked from a warehouse without errors emanating from either selecting the wrong product or the wrong needed quantity.
In conclusion, improving efficiency for management of a warehouse is more of sensible thing having the right equipment-technology-calls for fancy picking algorithms. Practicing the above tips will see your efficiency soaring to high levels.