Efficiency and accuracy are paramount for smooth warehousing optimization. Most major warehouse challenges also stem from a need for better transparency. Implementing a warehouse management system provides opportunities to automate processes to avoid upcoming challenges, boost transparency and more.

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Warehouse optimization includes following a disciplined process via automated warehousing solutions to minimize resource expenditure. It reduces errors, boosts customer satisfaction, and improves flexibility and communications.

Table of Contents:

• What Is Warehouse Optimization?
• 6 Ways To Optimize Your Warehouse
• Key Benefits
• Challenges and Solutions
• Best Practices
• Final Thoughts

What Is Warehouse Optimization?

Warehouse optimization is a process that allows businesses to manage and improve day-to-day operations by utilizing space and resources. It involves optimizing processes like putaway, picking, packing, storage, shipping and receiving.

Optimizing warehouses requires proper planning and examination of space and inventory management processes like tracking, transportation, packaging and shipping. With multiple operations to handle, prioritizing each task gets equally challenging. However, with warehouse automation, businesses can do away with manual, repetitive tasks.

Implementation starts by seamlessly integrating technology like robotics and IoT sensors. With automation, warehouses can quickly increase efficiency. It reduces human errors, improves warehouse productivity, minimizes operational costs and more.

Businesses should also know that there are two components of automation, process and physical. Although both facilitate warehouse optimization, they are free to select one or both forms of automation.

• Process, or system automation, automates manual processes involving data collection from different sources. It integrates existing systems with other databases, or software like enterprise resource planning (ERP), enabling control over logistics operations from a centralized platform. It provides improved accuracy and transparency throughout the process.
• Physical automation involves implementing machinery or other mechanical automation. It’s suitable for larger warehouses and distribution centers. Although costlier than process automation, the return on investment (ROI) is comparably high.
  This automation process includes automated storage and retrieval systems (ASRS), goods-to-person (GTP), automated guided vehicles (AGVs) and autonomous mobile robots (AMRs).

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How To Optimize Your Warehouse

With so many processes to handle, the best approach is to explore all possible warehouse optimization options. Let’s look at some examples.

Putaway

No matter which warehouse optimization you prioritize first, it’s critical that you move goods and store them in an optimal location. Make sure to identify and locate storage areas before moving product. Using software to automate and assign cargo for slotting and optimal space management is ideal.

Storage

Effective storage optimization is achievable by tracking inventory KPIs. The software must be able to calculate storage capacity and utilization levels. It helps allocate storage space and location based on cargo size.

These KPIs also provide accurate information about inventory available in the warehouse.

Warehouse Receiving

Businesses with poor warehouse-receiving processes will likely experience high operational costs. Warehouse receiving is more than just purchasing and moving inventory. There are multiple steps involved that ensure you’re delivering the correct items and quantities.

This situation is where power pallet trucks or conveyor belts help manage the receiving process. They clear the docking areas and help smoothly unload cargo.

Automation

Warehouse automation is responsible for tasks humans can’t or don’t want to perform. For warehouse leaders, adopting automation is an ideal way to boost productivity and efficiency, improve ROI, decrease labor demands and more.

It’s no surprise that according to a Research and Markets report, the warehouse automation market will grow at a CAGR of ~15% between 2022 and 2027.

Warehouse Layout

Optimizing warehouse layout cuts labor costs, improves warehouse organization, and enhances productivity and efficiency. Since a warehouse’s layout can vary based on size, shape and functionalities, it’s best to follow some common optimization steps and practices.

• Assess space.
• Conduct inventory audits.
• Divide warehouses into levels and sections.
• Estimate traffic.
• Adopt an inventory management system.

Picking, Packing and Shipping

Poor picking and packing cause inefficient order fulfillment. This failure often results in delayed orders and poor customer satisfaction. With mobile and wearable technology, warehouse managers can streamline picking, packing and shipping processes.

These devices provide real-time insights for smarter business decisions and expedited picking.

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Primary Benefits

With the right software, you can solve back-end issues and strengthen your core processes. Let’s explore some benefits in detail.

Improve Forecasting

Effective forecasting provides accurate inventory information about stock amounts and storage space requirements. It also offers sales insights and highlights items that sell better. In-depth product information provides better insight into order fulfillment.

Boost Productivity

An organized warehouse reduces chaos for workers, allowing them to locate exact picking locations faster. With enough space to move around, employee injuries are likely to drop as well. An effective and optimized warehouse layout improves overall productivity. With optimization in place, companies can establish safety regulations, daily processing protocols and more.

This process leads to a safer workplace and decreases irrelevant administrative expenses.

Streamline Operations

Cut wasted time by strengthening everything from receiving to shipping. These improvements allow businesses to deliver even during tight deadlines without compromising quality. They also boost warehouse KPIs like on-time delivery and accurate orders.

Enhance Visibility

Complete inventory visibility provides smooth documentation of items entering and exiting the warehouse. It offers real-time insights using RFID tags, serial numbers and barcodes. It also includes information about product demand and what’s likely to be sold.

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Challenges and Solutions

Optimizing warehouses comes with several challenges and setbacks. It requires investment in identifying and implementing the right system and processes. Below, we discuss the challenges most warehouses face and solutions to overcome them.

Inventory Location Problems

When pickers have to locate inventory manually, they’re more likely to waste time and slow down the overall loading and shipping process. Extended picking paths can result in multiple errors, such as picking the wrong items, SKUs and more. Identifying the fastest picking route takes time and effort.

Solution: Automated picking systems make the process painless. They do all the thinking and route mapping for you. Automation identifies the quickest route to pick items and eliminates excessive idle time.

Redundant Processes

Redundancy often happens when handling multiple processes and inventory. It can cost a lot of money since redundant processes are likely to result in order fulfillment errors, inventory inaccuracy, increased labor requirements and more.

Solution: In such situations, it’s ideal to find a warehouse solution expert for advice. Working alongside a solution expert is the fastest way to resolve these inefficiencies.

Inefficient Space Utilization

Optimizing storage space and racking is critical if you plan to expand your operation. With proper storage space, storing more inventory is feasible.

Solution: To improve your warehouse space utilization, you can start by analyzing and identifying functions that don’t require high ceilings. Start optimizing racking systems and right-sizing slots. Make use of the vertical space available inside the warehouse.

Inaccurate Inventory Processes

Inaccurate inventory processes cause multiple challenges, such as market demand analysis issues, inventory location problems and overstocking. Inaccuracy leads to inefficient processes and picking problems.

Solution: Automated systems benefit your inventory by offering real-time stock information. They also facilitate administrative inventory processes, minimize fulfillment errors and improve inventory space.

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Best Practices

Warehouse optimization is easier for smaller operations, but what about huge, multi-location warehouses?

Bigger warehouses are more likely to suffer from redundancies and inefficiencies. Smaller companies have less inventory to move, and their operations are nimble. What happens if you’re looking to scale? Here are some tips you can follow to optimize your warehouse.

Establish Safety Protocols

Following and maintaining safety protocols is one of the most important steps in warehouse operations. It ensures the safety of workers and prevents bodily harm. Skipping this step might impose a life-altering lawsuit against the company.

Frequent movement of machinery, equipment and people around the warehouse can create the perfect environment for accidents. To prevent fatalities, you should add anti-slip mats across traffic lanes and train workers whenever new equipment arrives. Other safety measures may include:

• Installation of proper lighting.
• Conducting frequent inspections.
• Following Occupational Safety and Health Administration (OSHA) guidelines.
• Providing cleaning tools.

Facilitate Receiving

Optimize the receiving process via automation to avoid product mispicks and damage. Automation detects common errors and minimizes the time usually spent by following manual receiving processes.

Instead of looking over receipts multiple times, automation quickly cross-references the invoice with minimal errors. It uses QR and barcode scanners to simplify the process.

Diversify Shipping Solutions

Multiple shipping options are more likely to deliver your items on time and at different locations simultaneously. You can contact multiple shipping providers like USPS, UPS and FedEx to see which options are available. Remember, the more providers you have, the faster and quicker your delivery will be.

Keep track of new shipping providers entering the market and watch out for updates in the shipping industry.

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Final Thoughts

The key to making your warehouse operations efficient and successful revolves around warehouse optimization. This holistic approach can boost efficiency and overall productivity to ensure on-time deliveries, safer warehousing and more.

These are a few warehouse optimization tips and best practices we came up with to improve accuracy and efficiency. Can you think of more? Tell us in the comments!