Operating a warehouse is expensive. Inaccurate or misplaced inventory can tie up capital and cause problems fulfilling customer orders. A poor layout or lack of automated tools and processes can increase frustration and add to your labor costs. The list goes on and on.
Most warehouses have grown over time, meaning legacy systems and software may not be up to date and able to handle tasks most efficiently. In this article, we will discuss what warehouse optimization can do for you and best practices that can reduce your operational costs while improving your workflow.
What an Optimized Warehouse Can Do for Your Business
An optimized warehouse can make a significant difference in your business. When you have accurate inventory, a well-designed workflow, and utilize technology and automation to streamline processes, you save time and money across locations.
By utilizing warehouse space more efficiently and equipping your warehouse workers with the tools they need to work more productively, you can reduce your time to fulfill orders and make everything run more smoothly.
Improve Your Warehouse Workflow With These 5 Best Practices
Implementing these five best practices can make a big difference in improving your performance, reducing your labor costs, and streamlining operations in your warehouse or distribution center.
1. Perfect Your Inventory Management Strategy
Inventory management is one of the most important things you will do in any warehouse. Poor control measures can result in dead stock, overstock, and stockouts. A study by the research firm IHL Group reported that inventory distortion and a lack of transparency into accurate inventory results in more than $1 trillion in lost sales globally.
Organizations need a consistent way to manage inventory levels, especially when selling across multiple sales channels or through different distributors. Best practices include:
- Deploying demand forecasting to anticipate industry and customer demands to maintain adequate stock levels.
- Using automated reorder points to ensure you have products or raw materials necessary to meet customer demand.
- Conducting regular cycle counts and reconciling any discrepancies.
Misplaced inventory is a serious problem whether you are managing a small number of items or a large warehouse full of SKUs. When you can’t quickly find items, it costs you time and money.
2. Track Your Assets at Every Phase
Implementing barcode, radio frequency identification (RFID), or smart antennas to track assets as they flow through your warehouse is crucial. Item-level tracking alone can increase inventory accuracy by as much as 30%.
Other best practices include Integrating asset tracking software to monitor assets in real-time at each phase of your workflow and managing asset utilization and lifecycle to ensure timely replacement.
One often overlooked area is returnable assets. Returnable assets are the primary way that parts and goods are transported in supply chains. Failing to track and manage returnable assets can lead to costly chargebacks and waste time searching for assets.
3. Automate Warehouse Processes Wherever Possible
Everything you can automate within your warehouse saves time. The right software can help guide your receiving, stocking, and pick/pack/ship processes. Warehouse optimization solutions can produce significant reductions in operational costs, increase productivity, and utilize warehouse space more effectively.
Tied to your inventory and order management systems, some of the more common warehouse automation tools include:
- Automated storage and retrieval systems
- Collaborative robots (cobots) to aid in picking, packing, palletizing, and inspecting.
- Automated guided vehicles (AGVs) and autonomous mobile robots (AMRs).
- Wearables to scan and automate inventory movement and management.
- Pick-to-light and put-to-light systems to guide warehouse workers.
Since labor costs account for more than 60% of most warehouse operations, warehouse managers utilizing warehouse automation optimization strategies can significantly reduce operating costs.
4. Improve Your Warehouse Layout
The current warehouse space in most operations may no longer be the most efficient way to manage inventory. An optimized warehouse design will improve the traffic flow, help reduce shrinkage and misplaced inventory, and boost overall efficiency by streamlining operations.
The most expensive process in modern warehouses is order picking and the most unproductive part of that is travel time on the warehouse floor. Travel time makes up about half of the total time it takes for picking, so any reduction you can make in travel time increases productivity and efficiency.
Best practices for warehouse layout optimization include categorizing inventory using an ABC analysis to identify high-value inventory and driving one-way flow to ensure safety and eliminate congestion.
5. Invest in Warehouse Management Software
Using warehouse management software (WMS) can help track everything to create a more seamless warehouse operations workflow. Orders can be fulfilled more quickly with fewer errors. With a WMS, you get:
- Real-time inventory management to increase accuracy.
- Increased efficiency using bar codes, RFID tags, and scanners to reduce manual paperwork.
- Reduction in picking and shipping errors.
Many companies are still relying on legacy systems or enterprise resource planning (ERP) systems that may not fully integrate with your systems, especially if you are utilizing automation. A WMS that is built for warehousing can provide the customization you need to best fit your warehouse strategy.
The best WMS solutions will allow you to significantly reduce or eliminate manual input, reduce touchpoints and travel time, prioritize warehouse safety, and track key performance indicators (KPIs) for improvement.
Reach Peak Performance With a Sensor-Based Solution
Connected solutions equipped with sensors are key to reaching optimal productivity levels in the modern warehouse. The best IoT sensor technology will allow you to create a complete map of your inventory with 99.9% data accuracy and fidelity. This allows you to identify weaknesses in your systems and opportunities for improvement in real time.
There are multiple options for deploying sensor-based solutions depending on your needs, including GPS tags, beacons, IoT and ultra-wideband sensors, and custom solutions. Devices include:
- Handheld scanners and RFID devices
- Portal readers
- Mobile fork truck pallet readers
- Ceiling readers
- Robotic readers
No two facilities and no two supply chains are alike. While there are similarities, each industry and company has unique requirements, standards, and needs.
Surgere can design a custom solution to improve your warehouse operations and drive efficiency through every step of your warehouse management, inventory management, and fulfillment.
Contact Surgere today for more information.