Managing a warehouse is not a simple, straightforward task. Even experienced managers sometimes miss important details, or overlook ways to increase efficiency and productivity. There might be a key element of workflow or inventory control or labour cost that has escaped the attention of a company’s leadership. Given this possibility, it never hurts to refresh our knowledge from time to time.
We thought it might be helpful to compile a short list of best practices gathered from organisations all over the world. It’s likely not an exhaustive list, but it’s as complete as we could make it. Perhaps you’ll find something here that you hadn’t considered. If we can help you better deal with making and/or receiving a European pallet delivery, or finding the most efficient storage layout for your space, or cutting down on the time it takes to fill and ship and order, we will consider this a success.
- Automate where appropriate. Manual procedures have been obsolete for some time, and yet there are companies that still keep track of inventory by hand. Barcode or RFID tags should be incorporated, and used on every single item that is received into your warehouse so that the item can be tracked, from receiving to stacking to packing and, finally, to shipping.
- Use something like bin locations to aid in efficient locating. Along with an item or product code, your automated system is probably equipped to use bin location numbers for easy storage and retrieval. Each item’s code includes location information that tells the reader exactly what area of the warehouse is set aside for each type of item. Consider the ‘temp test.’ Can a new or temporary employee pull up data from a reader, and look that data up on a posted map, and find the spot for a requested item? Or will that temp have to find another employee and ask for help? This is a great, simple way to decide just how logical and efficient your processes really are.
- Let the software keep track of how many times a particular item is sold and shipped. If one item is only sold four or five times per year, consider drop shipping the item from the distributor or manufacturer. If the cost of storing just a few items is larger than the cost of drop shipping, it makes sense to free up the warehouse space. Similarly, if an item’s sales trend shows a seasonal pattern, that information can be used to place larger orders at certain times, decreasing the per-item cost. These automated inventory control packages can provide a great deal of information if you know how to look for it.
- Establish an effective and straightforward return process. When an item is received originally, it goes right into the system, which automates the way it is handled. And yet when items are returned, some companies just toss them back into the warehouse. They need to be accounted for, and returned if defective, or repackaged and resold if possible. Either way, they should be re-entered into inventory control.
- Consider requiring vendors to make receiving appointments. Some companies are fine allowing their vendors to make their deliveries at any time. Perhaps in your case, it would make more sense to schedule deliveries so that the labour cost of personnel for receiving can be limited to certain shifts, freeing either the personnel or the payroll money for other uses.
- Make sure that warehouse safety is a top priority. We aren’t just talking about worker regulations and fire codes. Accidents and injuries are a very real cost, and they are often avoidable with just a few preventative measures. Don’t take shortcuts on workplace safety and you’ll save money. Accidents can cause increased labour costs, as well as the costs associated with inventory loss and equipment damage. It pays to be safe.
- Take advantage of vertical space. As inventory begins to approach capacity, consider the building’s height before you look at expanding. With the right shelving, and with proper equipment (such as pallet pickers and forklifts), you can utilise space basically from floor to ceiling. Obviously this needs to be done safely, with proper stacking technique and safety procedures in place, but it’s entirely possible that shelving and a machine or two will cost less than paying for warehouse expansion. Even if you only delay the expansion, that can be a favourable move in terms of the bottom line.
- Use periods of slow business to optimise workflow processes. In every business there are lulls, seasonal times when the workload is a bit smaller. Take advantage of those opportunities to review all of the items on this list. Why create any kind of work stoppage when you can use these times that happen naturally in your business? If you can reduce any cost or expense, or improve any process, or increase any productivity, the time will have been well spent.
Naturally, this list can’t include everything. But there is a lot here… I’m guessing there’s at least one thing here that you haven’t incorporated into your business. If I’m right, now’s the time to take action. And if I’m wrong, congratulations – you’re ahead of the pack!