Most warehouses run smoothly and deliver products on time to customers, however, warehousing and dispatching goods has certain costs involved which if not properly controlled and managed will harm a warehouse’s profitability.
Therefore, it is common practice for warehouses to conduct regular performance reviews to evaluate efficiency and productivity. Comments and notes from these reports are then used to write action plans on how to improve efficiency and productivity.
After completing a productivity review, a warehouse manager will be able to highlight several issues affecting efficiency, these could include:
- A limited workforce causing delayed orders
- Inaccurate inventory counts
- Delays in the supply chain
- Low demand whilst employing a large workforce
- Poor tracking of inventory
- Decreased or capped fulfillment capacity
- Overly labor-intensive warehousing processes
Improving efficiency and maximizing productivity is a key responsibility for warehouse managers which can take up large amounts of time and resources especially when improvements are needed urgently. Fortunately, warehouse managers can save themselves some stress and time by ensuring they have read some useful advice and tips on how to increase productivity like those in the article below.
The productivity of a warehouse can be significantly increased by automating either all or some of the processes required to move the inventory in, around, and out of a warehouse. In recent years, there have been substantial developments in automated machinery and warehouse robots are becoming more advanced as they can complete simple manual tasks for a much lower cost than human employees. Some examples of automated warehouse solutions are automatic guided vehicles, autonomous mobile robots, robotic parcel sorters, and picking robots.
Although skilled technicians and regular maintenance are required to efficiently operate automated machinery and robotics in addition to the sizeable capital investment required, there are many benefits to automating warehouse processes, these include:
- Decreased labor costs
- More accurate order fulfillment
- Fewer instances of human error
- Better customer service as orders are more likely to arrive on time
- Less manual labor
- Lower storage costs
- Improved inventory management
Use a Warehouse Management System
If a warehouse is rolling out thousands of packages a day then it will definitely need a cloud-based warehouse management system (WMS) to effectively and efficiently manage its daily operations including:
- Tracking the inflow and outflow of inventory
- Forecasting supply and demand of goods
- Automated picking and shipping
- Real-time stock reports including key details such as expiry dates, lot numbers, serial numbers, and quantities.
- Communication with suppliers and customers
A warehouse management system that is set up correctly and monitored throughout the workday is central to running an efficient warehouse as it offers several benefits such as:
- Rapid fulfillment
- Mobile use; a cloud-based WMS can be used anywhere
- No technology infrastructure and hardware costs as a WMS can integrate with various devices and systems
- Less chance of human errors in the fulfillment process
- More effective and responsive communication between customers, shippers, suppliers, and warehouse employees
- Improved customer service as delivery failure rate can be reduced to almost zero
Every well-run warehouse will carry out regular performance reviews to identify areas and processes that require improvements, to ascertain and measure issues warehouse managers use various key performance indicators (KPIs) to monitor productivity throughout a warehouse.
There are multiple specific KPIs associated with warehouse productivity, although typically they can be categorized by the operational area they focus on. KPIs generally aim to measure performance related to inventory management, the workforce, order fulfillment, energy use, and transportation.
Improve Floor Layout
Cluttered, complicated, and disorganized warehouses will likely result in lost time and an increased risk of late fulfillment due to employees constantly looking for stock and items getting lost. Therefore, it is essential to optimize a warehouse floor plan to ensure all the warehouse space is being used efficiently.
The demand for many goods can fluctuate for several reasons including natural disasters, cultural events, and seasonality, some of which can be predicted by warehouse managers. Forecasting demand entails using warehouse management software to analyze previous trends and sales data to predict future fluctuations in demand, for example leading up to Christmas warehouses may plan to hold larger inventories of most goods whilst at other times of the year a lean inventory can be planned.
Improve Energy Efficiency
Running a warehouse in a large industrial building or even something more modest will require a significant amount of energy which is both bad for the environment and a warehouse’s bottom line if not managed with sustainability in mind.
Warehouse managers frequently assess the energy consumption and efficiency of their facilities to check and plan fixes for issues that are causing excessive energy bills. Some energy-saving solutions commonly implemented in warehouses are:
- Replacing old and inefficient lighting with LEDs which can turn or off using motion sensors
- Improving the airtightness of the building, for example, checking the quality of door seals and preventing doors from being open for long periods
- Ensuring the heating, ventilation and air conditioning (HVAC) systems are working optimally and in unison to control, monitor, and manage the air temperature around the warehouse using different equipment such as destratification fans, thermostats, and low-intensity heaters
- Regular checking the performance of machinery, equipment, and systems, and carrying out maintenance and implementing updates when necessary
Properly Train Employees
Without properly trained and motivated employees, warehouses could not operate effectively and productivity would be severely affected. Therefore, managers should put some thought and hours of planning into employee training programs which should include training on how to competently use the machinery and technology, and what to do in the case of system errors or missing inventory.
Efficiency and productivity in a warehouse can be maintained and improved through a high standard of employee training resulting in several benefits such as improved employee retention, a reduced impact of employee absence, lower accident risks, a positive workplace culture, and a better understanding of the business’s goals.
The overheads associated with operating a warehouse can be immense especially if costs have been allowed to get out of control and productivity is decreasing or stagnating. There are however several things warehouses can do to improve their productivity whether it be utilizing a warehouse management system, increasing automation, or improving staff training.