3 Warehouse Optimization Techniques to Improve Long-term Efficiency

No matter your business, it’s impossible to not feel the impact of the COVID-19 pandemic. From supply chain delays and travel bans to furloughs and stores closing, it is believed that more than 80% of companies will experience some disruption. With these stats hitting the headlines, your first instinct as a Small Business is likely to batten down the hatches and do your best to weather the storm. However, there are strategic warehouse optimization techniques you can implement now to strengthen your business in the long-term.  

Warehouse Optimization Tips for Small Businesses

Your warehouse is the bridge between your business and your customer. As a small business leader, your primary goal is to ensure that the right product gets to the right place, at the right time. Despite the current disruption, research shows that now is actually the best time to invest in your business - in strategic ways.  

According to an October 2019 report by KeyBank, the top strategy businesses can take during a temporary downturn is to improve operational efficiencies and productivity. This can take several forms in the warehouse, but we’ve identified three key steps for tackling operation efficiency across your supply chain.  

Step One: Review Your Warehouse Layout 

Warehouse capacity is one of the top warehouse metrics businesses should keep an eye onIf your objective is to improve operational efficiency and productivity in the warehouse, you should start by answering a few of these questions about your warehouse layout

  • Do you have single SKUs in multiple locations? 
  • Have you identified your fast and slow moving inventory? 
  • Where are those items located in the warehouse? 
  • Are your items in bins? Do you have sufficient shelf space? 
  • Do you understand your SKU characteristics? 
  • Are aisles, bins, racking, items and all locations properly labeled? 

Using your warehouse space optimally allows your staff to get jobs done faster and complete more jobs in a day. If you decide to implement a new warehouse layout during this downtime, there are a few steps you should follow. The safety of your workers should always be top of mind as you layout how products will be stored (example: heavy items on the bottom of racks vs on top, optimal room for equipment to maneuver in aisles.) 

For maximum productivity, the end goal should be to reduce the number of touch points for an item as it moves through the warehouse. Once you’ve identified your fast-moving inventory, make sure it is at the front of the warehouse verses the back for optimal picker productivity. Once implemented, schedule regular visual inspections of your warehouse to ensure it is running at peak performance.  

Step Two: Review Your Business Processes

Business mogul and resident Shark, Mark Cuban took to LinkedIn to offer small business advice. “This is a good time to clean up all the little messes every small business has. Everyone has things they wish they could re-do. Now is the time to make those changes,” Cuban said.  When you are experiencing growth, it may seem too painful to stop and find time to evaluate what you can be doing more efficiently. Take advantage of this time to figure out where you can improve. Start with answering these questions: 

  • Do you know your lead times for your products?
  • How often do you count your inventory? 
  • Who are your most efficient workers?
  • What are the main reasons for customer returns?
  • Do you have defined material flow routes and picking paths?
Paper-based processes, manual data entry, and reliance on institutional knowledge are the enemies of a growing business. Without smooth processes, you can end up with overstock or stock outs, delayed shipments, inaccurate orders, and unhappy customers. Some examples of inefficiencies from manual processes in your warehouse include:

At the Receiving Dock 
If you see staff doing lots of paper-shuffling, writing and tapping on keyboards to collect data, there is an opportunity for mistakes. This can be especially true at the receiving dock. A manual checking process can be laborious and time consuming as staff has to double-verify the item and quantity being received on the shipping document. It’s not uncommon for people to overlook an item or mistake one product for another. This method may be cheaper in the short term, but if errors are not detected, it can lead to twice the effort and costs the business time and money to rectify. 

During the Picking Process 
Consistent incorrect picking of products is an additional risk for a business. Not only does it lessen the credibility of the brand to the consumer but is costly 

Packing and Shipping to Customers 

Packaging hundreds of orders a day can be a real nuisance without a structured process in place. Using a packaging framework that standardizes boxes and sizes with a label printer on hand can contribute to faster sales order dispatch.  

Read how E-commerce companies are adapting their processes during this time 

Step Three: Consider where Automation Can Help  

Since collecting data manually is time consuming and prone to inaccuracies, using barcode scanners and software to collect data can be a more reliable and cost-effective solution. While starting a new software implementation project right now sounds counter-intuitive, automating your inventory movements now will allow you to scale quickly and easily in the future.

Workers can utilize a mobile inventory management solution, like RF-SMART, to update your ERP with inventory movements in real-time, and managers can use the built-in best practice supply chain logic to tweak business processes and make them even more efficient. There are numerous operational efficiencies that can be seen from implementing a mobile inventory solution. Customers that have implemented inventory solutions see improvements like: 

  • Reduction in training time 
  • Increase in worker productivity  
  • More accuracy in picks and shipments 
  • Faster order turnaround 
  • Better decision making due to increased real-time accurate visibility into their stock  

Read how one company implemented these 3 steps to see improved operational efficiency and achieved one-day shipping.

Read the Case Study