Having a warehouse that flows smoothly is essential to maintaining customer satisfaction because it helps ensure quick and accurate shipments. Inefficient warehouse operations can lead to long waits and inconveniences, which are the top reasons customers will stop buying from you. But did you know improved efficiency of a warehouse can also help reduce operating costs directly impacting on your bottom line?
If a budget to fully automate your warehouse with artificial intelligence is not feasible right now, not to worry, there are a number of things you can do to improve workflow efficiency in the warehouse in the meantime! Consider these five ideas to improve efficiency and help keep operating costs down.
Maximise and optimise space
Rather than expand the length of your warehouse floor, consider better use of vertical space. Adding taller storage units and the right equipment to pick and store inventory stock can help you keep more in the same square footage, rather than adding expansion costs or having to relocate altogether.
Implement lean inventory
Most manufacturing facilities are trending towards lean manufacturing as part of their efforts to improve manufacturing processes and lowering overall costs. Adopting lean inventory for your warehouse uses the basic premise of “lean” which is to use only what you need, and nothing more. This could be by making smaller but more frequent orders so you are not stock piling inventory stock.
As your business grows you may need to relook at the picking process within your warehouse. Smaller operations may function well enough with manual pickers delivering inventory stock to the packaging and the shipment side of your facility. This approach isn’t scalable and will start to impact productivity as you grow. Although there is a cost involved with upgrading and adding automation, by reducing such manual processes, you can dramatically increase the productivity of your fulfilment centre and ultimately save costs in the long run.
Optimise labour productivity
Whether through automation or employee incentives, optimising labour productivity should be a fundamental factor of any warehouse improvement effort. Since labour tends to be the largest operating cost in warehousing and order picking operations, it’s imperative for organisations to understand what can affect production rates.
Standardise and audit workflows
From the time a product arrives in your warehouse to the point where it leaves, every activity and process for moving that product should have an established workflow. Without a workflow in place, employees either work in a way that is most efficient for them or most comfortable. However, what’s efficient or comfortable for the employee may not be the most efficient or profitable way for the company. With standardised workflows, you can ensure that every employee operates within the same standards. You can then monitor individual employee performance against benchmarks established for that segment of the workflow.
When fulfilment issues arise that can impact operational costs, a quick audit can typically reveal the workflow bottleneck. When auditing and changing any workflows in your warehouse, remember employees are at the heart of that process. As workflows rely on people not only to complete the task but also to improve them and make your warehouse more efficient, it can be rewarding to turn to your staff when you want to optimise workflow efficiency. Creating a feedback channel to allow your employees to show you ways they feel each task can be improved can help. Consider how your process change will be managed in order to make a smooth transition.
The above recommendations reflect ideas that can help improve the efficiency of your warehouse, and many revolve around leveraging a warehouse management system. An audit of your operations can help you identify bottlenecks and find opportunities to improve efficiency. The best approaches implement a warehouse management system and continually monitor KPIs and performance. Over time, each effective change you make will continue to reduce costs and innovate your warehouse operations overall improving workflow efficiency.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.