The benefits of warehouse optimization is an improved workflow, accurate inventory, faster throughput, and increased output per employee. The overall result is doing more with less while having the highest customer satisfaction.

Reducing the time it takes for the current stock to reach customers is key to customer satisfaction. Shipping the wrong product or missing time estimates are major reasons for lost customers. These errors and delays also have a direct cost associated with them, which can be avoided through improved warehouse optimization.

Optimization of the warehouse

The pandemic has increased consumer purchases online. These consumer habits will likely continue beyond the pandemic. The rise has put more pressure on the supply chain to process and store more goods in warehouses. Maximizing existing warehouse space is cheaper than trying to buy additional space for increased storage. Organizing the put-away of products needs to be in real-time using software tools to automatically designate the most efficient placement of goods to maintain optimization.

The layout needs to consider pick faces, excess storage, bulk storage, product replenishment, volumes, optimum pick quantities, etc. The goal is to reduce the level of open space in any of the racks or storage locations. Does your operation suffer from Honeycombing? Honeycombing means you can see gaps in lots of storage locations when you do a walk through.

The types and sizes of products you provide must also be evaluated. They must fit the racking put in place. For example, what is the optimum rack width to fit the most amount of skids? How high do you stack items? How do you handle partial cartons or skids? What is the weight of your products? These plus many more attributes of inventory often mean that you need different types of racking and storage through the warehouse. The original layout needs to be re-evaluated periodically based on changing conditions.

Shortage of Inventory Visibility

Accurate inventory is key to having capital tied up, avoiding stock outs, reducing write-offs, and improving warehouse throughput. Inaccurate inventory can lead to warehouse staff spending the majority of their time just wondering around looking for product. Often, companies buy more product then they need to avoid stock-outs because of inaccurate data. Large write-offs can happen each year at the physical inventory count because products are missing or found without any sales to offset.

Accurate inventory gives management the tools to make informed decisions on what to stock. Key to accurate inventory is both real-time data through WiFi and accuracy through barcode scanning. Real-time, accurate information goes further than just for inventory purposes, it shows valuable data that management can use for decision making and performance evaluation. In addition, there is a trail of information for product history in case of quality or recall issues.

Ineffective Picking

Picking is a major component of warehouse costs and order processing time. Optimized warehouses use logic to determine the best path of picking. The distribution of picking duties can be split amongst pickers to achieve more efficiency. Orders can be divided up on a one to one basis, one order to many pickers, many pickers to one order, picking done by zones, or other methods,

Accurate inventory ensures that items are there when a picker goes to get it. Directed pick locations saves time looking for the product. Allocated inventory means that different pickers are not trying to pick the same items. Inventory with broken carton and pallet items are allocated to the most optimum quantities. Date tracking keeps First In First Out (FIFO) methods in place while ensuring that expired items are not sent to customers. These different aspects of the pick process and many others lead to more efficiency in the warehouse producing a significant return on investment.

Inaccurate data input

Improving the method of data input will immediately produce improved results. Using a keyboard or keypad to input data produces an error every 1 in 300 keystrokes. This can be eliminated with the use of barcode scanning. Decision making can be prone to errors simply because the information is not up to date. Staff instructions need to be communicated in real time and avoid mistakes. 

Devices in the warehouse connected to a Radio Frequency Network ensure the information is always up to date and allows for instant two-way communication. In addition, industrial mobile terminals eliminate the need for hand written information which can be lost or misread. With the correct hardware, this technology can assist warehouse workers in barcode labeling, scanning and communicating which will help ensure accuracy.

Optimizing your warehouse with all the best practices will maximize the use of warehouse space, equipment and labor to process all orders correctly and quickly. A warehouse management system is a key component to optimizing the warehouse. This will help your business reach higher levels of success.