Improve Warehouse Efficiency: Top 6 Ways

Warehouses are a critical link in the supply chain, serving as a hub for inventory storage, order fulfillment, and the distribution of product activities. So when warehouse managers need to prioritize operational efficiency and agility to meet customer expectations and changing market and business environments—especially considering recent events.

According to a 2021 Middle Market Business Index report, over 50% of middle market executives report that their supply chains were disrupted by the pandemic. And while progress has been made, since then warehouses, manufacturers, and other sectors are still dealing with its long-term effects on inventory levels, labor, and production.

However, implementing the solutions outlined below will offer your businesses several benefits, including streamlined processes, reduced waste, and improved inventory management.

6 Ways to Improve Warehouse Efficiency

If you’re struggling with warehouse efficiency, here are six strategies your organization can implement to make noticeable improvements.

1. Analyzing Warehouse Layout and Costs

If your operations are impacted by a lack of space, reassessing your current warehouse layout is an excellent first step. For example, ensure you are optimizing your vertical space. Consider implementing shuttles, AMRs, pocket sorters, and other AS/RS systems or mezzanine to help maximize the storage density and capacity within your facility.

From there, shift your attention to reducing wasteful labor costs. For example, manually picking orders, utilizing pick lists and bays of shelving, is not only inefficient, but costly. As a result, identify any order picking and packing tasks that can be automated. While purchasing automation technologies will require an upfront investment, it will decrease your labor costs long term, often providing an ROI within 12 to 18 months.

Of course, picking and packing activities are only a few processes that can be automated. As part of your efforts to improve warehouse efficiency, explore opportunities to automate other warehouse tasks as well, such as the receiving process and truck unloading within your facility.

2. Improving Inventory Management Systems

In today’s fast-paced business landscape, managing inventory effectively can be a monumental challenge. From varied sales channels to fluctuating customer demands to growing SKU counts, the inefficiencies can multiply if they are not handled strategically.

Implementing a warehouse execution system (WES) software can not only help improve labor and equipment performance, but also be used as a “light” warehouse management system (WMS) or to augment existing WMS software. Customizations for visibility, processes, and procedures—which are prohibitive to add to your WMS because of time and budget—are easier to deploy and less expensive when using a WES software.

Utilizing a robust inventory management system can significantly reduce mistakes and improve inventory accuracy by up to 99.99% levels. When you can accurately pick, pack, and store inventory, your workforce will spend less time correcting errors and more on serving your customers.

Addressing internal inventory management challenges is only the beginning though. You also need optimal supply chain visibility. Global ecommerce sales are projected to grow by 50% by 2025, and though these projections bode well for the long-term performance of your organization, you need a solid, resilient supply chain to fully capitalize on that opportunity.

As you explore technological solutions for your warehouse, focus on software and applications that can integrate with your existing technology stack. By optimizing the exchange of information, you can transform the entire supply chain into an agile, resilient, and reliable network that supports your goals.

3. Utilizing Technology for Warehouse Operations

One of the most effective ways to improve warehouse efficiency involves making use of technologies that support your day-to-day operations. Robotic solutions and user-friendly handheld devices, for instance, can empower your team to be more productive.

You can apply these technologies to a broad range of warehouse operations, such as:

• Case Handling: Robotic technologies like shuttles and autonomous mobile robots (AMRs), as well as conveyor systems can sort and sequence cases with exceptional efficiency. Automating case handling cuts down on searching and walking time and enables your team to focus on more value added functions.
• Packing: Cutting-edge technologies can streamline the packing functions such as carton erecting, inserting dunnage, applying labels, inserting invoices, bills of lading, return labels, and much more.
• Goods-to-Person: Goods-to-Person (G2P) systems allow operators to remain at their workstations and have inventory delivered to them for picking and replenishment. With a G2P system in place, workers will no longer have to walk miles per day throughout the warehouse searching for the next SKU to fill their orders.

Integrating these technologies into your core operations will not only enhance warehouse productivity, but also help you navigate the ongoing worker shortage and reduce the burden on your existing staff.

4. Replenishing Order Fulfillment Processes

Antiquated order fulfillment processes can create operational bottlenecks that can undermine your facility’s overall productivity. However, by adopting modern fulfillment processes, such as batch and wave picking, you can achieve more efficient order routing and sequencing.

According to The Fulfillment Lab, automated and efficient warehouses enjoy a broad array of advantages when compared to facilities that lack automation technologies. In fact, automated technologies can support your order fulfillment processes because:

• Automated warehouses are 76% more likely to boost inventory accuracy to 99+%
• On average, automated facilities reduce labor costs by 3% per year
• Automated facilities are 40% more likely to fulfill one-day shipping

Order fulfillment technologies are an incredibly valuable addition to your warehouse’s operations. By investing in these solutions, you can gain a distinct competitive advantage, reduce your labor costs, and provide a better customer experience.

5. Enhancing Workforce Productivity

Automation and robotics technologies are not a replacement for a skilled workforce. Instead, technology is designed to augment the capabilities of your staff so they can achieve their full potential. 

Therefore, it is critical that you invest in training and skill development programs that are tailored to the unique needs of your team, while also prioritizing communication and collaboration. A company culture that features open and honest communication will help organizational leadership build trust with team members and foster feelings of loyalty.

Another important component of workforce productivity is incentive pay. A properly engineered incentive pay program can provide major productivity improvements, especially in key labor areas such as picking and packing functions, and there are a variety of ways you can structure yours. 

For example, consider offering monthly or quarterly bonuses for hitting certain (realistic) output milestones, or pay an hourly differential to top performers, provided they sustain their level of output. 

6. Continuing KPI Improvement and Data Analysis

When your goal is to optimize warehouse operations, you must adopt a continuous improvement mindset. While it is important to celebrate all victories, you should also set new objectives and KPIs whenever you reach important productivity and efficiency milestones. Raising the bar can keep your team motivated and ensure that you maintain your competitive edge each year. 

However, before you can set any goals, you need a clear picture of your facility’s health and performance. To do so, you need a robust data analytics solution. By gathering, analyzing, and leveraging order data, you can support your decision-making processes and create a cohesive strategy that propels you toward both your short- and long-term KPIs and goals.

Despite the common misconception that productivity and performance will suffer during supply chain changes, according to a 2022 report 81% of executives noted that adapting their supply chain would not affect quality or performance. 

Take Your Warehouse to the Next Level

While these facility adjustments will likely improve your warehouse in many ways, it is important to maintain a high level of performance during times of significant organizational change. This means closely monitoring your facility’s KPIs. If you notice a dip in output, try to pivot initiatives to keep quality, productivity, and efficiency up. Use these insights as a map to keep your warehouse on the right path.

If you are ready to enhance warehouse productivity and take your efficiency to the next level, it is time to take action. However, to effectively act on these goals, you need an innovative partner that is going to help you push the limits of what’s possible through the strategic implementation of robotics and automation technologies. Consider scheduling a no cost or obligation consultation with Conveyco.