Inefficiency can have a corrosive effect on warehouse operations that goes way beyond shipment velocity or throughput. Lack of efficiency can have a domino effect across different warehouse activities, leading to missed shipments, returns, customer chargebacks, and ultimately lost business.
Optimizing warehouse efficiency requires a mix of technology and process changes that, taken in tandem, can both cut costs and create new business opportunities. Here are some key strategies for improving warehouse efficiency:
Process Evaluation: Prior to any major technology deployment, map out every process on the warehouse floor and search for inefficiencies and bottlenecks. If a process doesn’t seem to make sense, find out why it was implemented. In some cases, you may find employees are doing something simply because “It’s always been done that way,” even if “that way” is not longer necessary.
It’s important to root out and change bad processes prior to an automation project, otherwise you’ll simply increase the efficiency of a bad process and get the wrong results at a faster rate.
Automation: Humans are prone to errors, so any opportunity to take the human element out of data entry and data collection is a golden one. Automation technology in the warehouse can take the form of mobile computers, voice-directed picking, pick-to-light systems, conveyers, warehouse management software, bar coded pick lists and putaway locations, or RFID tag tracking.
The key is to reduce or eliminate the number of times an employee has to write things down or search for SKUs. The fewer “touches” on the data, the more accurate it will be and the more quickly your employees can complete their work.
Automation systems can also be set up so that if there is a mispick or mistake, employees are unable to move forward with their picking or packing process until the error is corrected. That way, mistakes are fixed before they reach the customer’s dock door and employees are given a sense of accountability in the process.
Hands-Free Picking: If your warehouse requires a lot of piece picking, then your employees will work faster with both of their hands. Ditch the clipboard or the brick-style mobile computer and see if your picking operations can benefit from a voice-directed picking solution that allows them to work faster.
Measure: Establish key performance indicators (KPIs) and find out how you are performing against your peers and your own month-to-month numbers. Find your baseline and establish targets. Keep the metrics at a manageable number so staff can focus on specific improvements.
Also, determine your fastest and slowest moving SKUs, rank them, and focus your efforts on improving shipping performance for your most in-demand items.
Stay Organized: Keep your shelves and bins neat and organized. If you deal in different sized products, try using different sized shelving for those products to reduce wasted space. Make better use of vertical space as well; it can save you an investment in more square footage down the road.
Once you identify your fast- and slow-moving SKUs, organize the warehouse so that you can reduce the number of times items are touched, and cut down on the distance your employees have to walk to complete an order and print off labels. Most of the wasted time in a typical warehouse involves staff walking from one spot to another, multiple times per day. If you can trim that time you’ll improve warehouse efficiency and make working conditions better for your staff.
Documentation: Keep a central record of your performance against your targets, and make sure managers are aware of any significant improvements or failures. That documentation should extend to process or staffing changes, new customer demands, technology upgrades, and other changes in the warehouse. With that data available, you can map errors or bottlenecks and potentially identify the source of the problem more quickly.
Warehouse efficiency is critical in an increasingly competitive supply chain. Root out poor processes, invest in technology that can improve productivity, and continuously document and measure your performance in order to keep your operation running as lean as possible.