An efficient warehouse maximizes its space, streamlines its operations and promotes productivity among its workers. When a warehouse runs efficiently, customers get their shipments on time and the company’s bottom line stays safe.

Even when a warehouse is consistently making customers happy with on-time and accurate shipments, there are still operational shifts to make that can enhance a warehouse’s performance. The typical warehouse has a considerable amount of activity going on at any given time, meaning there’s always an opportunity to improve efficiency. If you’re looking to streamline your existing processes and look for opportunities to maximize productivity, follow these tips for improving warehouse efficiency that you can start implementing today.

1. MAXIMIZE WAREHOUSE LAYOUT

The foundation of a well-oiled warehouse starts with its layout. A properly designed warehouse is conducive to efficient operations and encourages maximum productivity. A good warehouse design addresses common operational challenges like shipping and receiving bottlenecks, lost inventory, unsafe storage practices and lengthy picking times. Managers can overcome these obstacles with proper inventory placement.

An efficient warehouse should follow a layout based on sales volume. Using your order reports from your warehouse management system (WMS), your management team can determine which are the fastest moving goods and position those closest to the receiving and shipping areas. This way, these hot-selling goods can flow seamlessly from the receiving dock and be stored in the nearest location. Conversely, when it’s time for thee particular goods to leave the warehouse, they can be easily picked and shipped without workers having to wander too far.

Other principles of good warehouse layout and design include making it as clutter-free as possible, improving accessibility to frequently picked goods and creating a uniform storage environment.

2. IMPROVING WAREHOUSE STORAGE

Ensuring there’s a place for everything and everything in its place is a key principle of effective warehouse storage. Inventory management and proper storage directly contribute to how efficiently a warehouse can run. When you have all goods neatly stored in a specific destination, they’re easy to access, pick and ship. In order to make goods more accessible and organized, your warehouse needs the right storage solutions.

Effective warehouse storage is all about maximizing the space you have. In most cases, this means you need to leverage the vertical space of your warehouse to be able to store more goods and make room for other operational activities. Vertical racks and containers are a tried-and-true storage solution used in millions of warehouses around the world. They’re sturdy and durable and can stack as high as your warehouse and building codes permit.

Not only are racks and containers efficient in helping maximize space, but they’re also safe. High-quality steel racks and storage containers will keep your goods protected, preventing product loss and damage.

3. USE THE LATEST WAREHOUSE TECHNOLOGY

If you manage a large warehouse or multiple facilities, you know that organization and timely communication can be a challenge. However, you can track your inventory in-house and en route to its destination with the help of the latest warehouse management software (WMS). A cloud-based WMS can give you real-time warehouse analytics, automate scheduling and accounting processes, track inventory and streamline communication all from a secure central hub.

4. IMPLEMENT A CUSTOM REPLENISHMENT STRATEGY

A warehouse’s replenishment processes are often a work in progress. Many managers try different replenishment approaches to discover what works best and what’s most efficient based on sales volume and category of goods they carry. Regardless of whether you replenish your stock daily, monthly or whenever you have downtime, replenishment practices should always be based on the information your WMS can provide.

One of the most useful tools your integrated WMS has to offer is the ability to automatically re-order specific SKUs. You can configure the WMS so that when specific SKUs reach a given sales threshold, it automatically triggers a replenishment. That way, your warehouse always maintains a steady stream of inventory without the risk of backorders piling up or goods sitting for too long and incurring unnecessary carrying costs.

5. STREAMLINE PICKING AND PACKING

One of the most significant congestion factors warehouse managers must address is the picking and packing procedure. In warehouses handling multiple SKUs and multi-product orders sent directly to the consumer, picking and packing is an exceptionally time-consuming process. When warehouses palletize goods and store them throughout the warehouse, pickers spend a lot of time finding and retrieving goods, and these labor costs accumulate when not done strategically and efficiently.

A newer warehouse inventory management approach that’s becoming increasingly popular is the idea of embracing chaos. This inventory approach, first developed and perfected by Amazon, consists of single SKUs sorted into random storage containers along with a variety of other totally different SKUs. Every container, or destination, has a number, and the WMS tracks every item stored in the container. When pickers want to retrieve an SKU from the picklist, they locate the nearest container with that item. This random sorting approach cuts down on the amount of travel time pickers spend looking for and retrieving goods, effectively streamlining the entire picking process.

Other ways to improving picking and packing efficiency include priority picking, picking waves and picking directly into shipping containers. Warehouse automation and robotic technology also help cut down on picking time by bringing goods directly to pickers, rather than pickers having to travel to the items.

6. PLAN FOR RECEIVED GOODS

Another area to improve warehouse operations is with receiving procedures. Developing receiving best practices is crucial to efficiently make goods available for order and shipment. It’s vital that warehouses not procrastinate on receiving goods so they don’t pile up. To efficiently receive and stock goods, a warehouse must be well-staffed during peak periods. Having a flexible staffing schedule allows your warehouse to scale up its workforce when large shipments arrive.

Managers can also become more efficient by planning and working with suppliers to know exactly when shipments will come in, and how much product they will receive. That way, managers can allocate the necessary resources to ensure their staffers receive the goods and quickly get them ready to sell. Knowing which items are coming in ahead of time also allows managers to plan for where they will store the new products. With careful planning, you can improve warehouse efficiency and not lose out on sales opportunities.

7. OFFER EMPLOYEE INCENTIVES

With the cost of maintaining a warehouse workforce at the forefront of many companies’ concerns, it’s understandable that these organizations will want to keep wages on the lower end. However, this tactic often leads the best employees to competitors who will pay them more. In order to compensate your warehouse employees for their efforts while still being mindful about the overall cost of labor, consider introducing incentive pay, which has been shown to consistently raise employee productivity. When your employees know they’ll be rewarded for effort, your warehouse will become more efficient.