Whether you fulfill your orders in-house or rely on a third-party logistics provider, warehouse efficiency is of the utmost importance. The layout of your warehouse affects how quickly items can be picked and packed which affects the efficiency of your order fulfillment strategy as a whole.
In the world of e-commerce, efficiency is the name of the game, and warehouse optimization plays a crucial role. In this article, we’ll discuss some of the simple things you can do to optimize your warehouse for greater efficiency.
Does Your Warehouse Need a Face Lift?
While there are certainly benefits to maintaining stability as a business, ultimately it is in your business’s best interests to maintain a growth mindset. Organizing your warehouse in a way that leaves room for growth in the future will save you the hassle of a total layout overhaul down the line.
If you’re just now realizing that your warehouse operations are a little clunky or slow, don’t worry – it isn’t too late to make improvements. The first thing you need to do is take a closer look at your current operations and run some analyses to gather data about the different aspects of your order fulfillment process so you can identify areas for improvement.
Gather as much data as you can and ask yourself the following questions:
- How long does it take for an order to reach the customer’s door after placing an order?
- How quickly are items picked and packed after the order reaches the warehouse?
- How much time does warehouse staff spend picking items for individual orders?
- Does some of your inventory move more quickly and what factors impact those sales?
By asking yourself these questions, you can get a feel for how your warehouse layout actually impacts your bottom line. For example, if you find that your warehouse staff are wasting a lot of time walking back and forth across the warehouse, that’s an opportunity for optimization. If you learn that some of your inventory sells at a higher rate than other items, you can change where you store that inventory to make it more accessible for faster order fulfillment.
These are just a few of the questions you can ask yourself to determine whether there is room for improvement with your warehouse operations. Once you’ve decided that it is, in fact, time to change you can start implementing some of the simple tips from the next section.
8 Ways to Optimize Your Warehouse Layout
Realizing that your warehouse operations could use some improvement is only half the battle – the next step is to take a closer look at the current state and identify specific steps to take for optimization. Every warehouse is different, but there are certain things you can do to start making a big difference in your operations right away.
Here are 9 simple ways to optimize your warehouse layout for greater efficiency:
- Take a closer look at product velocity. The term product velocity refers to the rate at which certain items sell. If you run the numbers, you’ll find that some of your items tend to sell more frequently than others, so it makes sense to organize your warehouse layout to make those items easy to access. Put your fastest-moving items closest to the packing stations to eliminate unnecessary travel and to move products more quickly.
- Change the width of your aisles. When it comes to the width between your aisles, you need to think about both practicality and safety. If you’re using forklifts, you’ll need to keep your aisles wide enough to accommodate smooth operation but don’t make your aisles so large that it increases travel time for picking and packing.
- Measure your travel time. Don’t assume that more warehouse space is always better. The larger your warehouse, the longer it takes for warehouse staff to pick and pack your orders. To help identify ways to improve your warehouse layout, measure travel times for different types of orders and make adjustments to improve efficiency across the board. Travel efficiency is extra important when dealing with perishable products, such as meal kits.
- Cut out excess products to save space. Some companies keep certain items on hand to their own detriment. Though it may seem like a good idea to keep some safety stock, in reality, it could be cluttering up your warehouse or bringing down your efficiency. Instead, eliminate unpopular and outdated inventory to make room for faster-selling items.
- Change your shelving and storage bins. The way you store your inventory can have a significant impact on your efficiency. Shelving height, width, and organization affects how quickly and easily warehouse staff can pick and pack orders. Your storage bins can also be improved depending on the size and velocity of certain products – stackable bins are a great option.
- Make use of vertical space. Though you may need to reevaluate your shelving, making use of vertical space for storage can improve your warehouse layout. You’ll still want to maximize your use of floor space for available inventory and fast-moving items but using vertical space by implementing custom storage solutions can improve safety, access, and efficiency.
- Improve your product labels. Every piece of inventory should be properly labeled so you can tell what it is, but you can also use your labels to track other information. Improving your product labels will make it easier for you to store and track your inventory for greater efficiency.
- Reevaluate your picking and packing strategy. Taking a closer look at your current picking and packing strategy can help you identify ways to improve your warehouse layout. If you decide to switch to a different strategy, it may require that you reorganize your warehouse.
- Invest in warehouse management software. Knowing exactly where your inventory is, how much you have, and how quickly it is moving is the key to optimizing your warehouse. Warehouse management software (WMS) is an excellent tool to accomplish this, especially if you integrate it with other technologies to automate your order fulfillment process.
In addition to putting some of these steps into action, there are a few other simple things you can do to maximize efficiency in your warehouse. One thing you should prioritize is cleaning – in a large warehouse, it doesn’t take long for slight disorganization to turn into chaos and a messy workspace can impact quality and efficiency. You should also keep an eye out for ways to reduce clutter. Whether it’s changing the way you package your order, clearing out empty pallets more quickly, or making changes to the way you store inventory, simple changes like these can make a big difference.
Warehouse layout is an important factor that impacts your business more than you may realize. The speed, accuracy, and efficiency with which you fulfill orders can make or break your business, and this is particularly true for e-commerce businesses where the competition is high. Take the time to review your current warehouse layout and implement some of the tips you’ve received here for greater efficiency.