Warehouse optimization forms an integral part of ensuring cost-effective operations. By adopting lean warehousing strategies and agile supply chains, regardless of the size of the warehouse, you will enhance efficiency significantly and stay steps ahead of your competition.
What is Warehouse Optimization?
Optimization in warehousing is an amalgamation of disciplined methods that can be employed to save space, resources, and time. They help to decrease errors while driving flexibility, communication, and end-user satisfaction. Several other important factors that contribute to warehouse optimization include product placement, storage, retrieval mechanisms, and the overall flow of the warehouse operations.
Warehouse Optimization Strategies for Storage
When your warehouse is smartly managed, it enhances efficiency considerably while decreasing costs and thereby generates an increase in revenue. Among the several techniques that can be employed, here are a few standout warehouse optimization tips that will help you streamline processes and realize a better return on investment.
Automation of Cargo Handling
When cargo is managed manually, it is difficult to estimate and rely on the outcome because of human errors. Inefficiencies, for example, staff forgetting where a certain product is located or inexperienced employees slowing down the operations, can drastically hamper timelines. However, these variables can be avoided altogether if cargo handling is automated. In addition to ensuring accurate placement of products, automation also feeds correct information into the system as well.
Utilize BIN Locators
BIN locators are one of the most important warehouse optimization solutions. Simply put, BIN location refers to the address where your goods are placed, right from the warehouse, if you have more than one, to the shelf the product is on. With this information, you can cut short your placement and retrieval process, which in turn accelerates the rate of fulfillment.
To achieve an organized and detailed inventory location protocol, all columns, rows, and racks have to be marked, and these become the bin numbers for specific products. While it is at your discretion how you choose to format it, integral to the success of BIN locators is that your employees comprehend the concept of how the system works so that they can then organize the warehouse efficiently.
In order to better performance, use easy to read labels on cartons, pallets, shelves, pallet racks, aisles, and floors. From floor label systems that rank high in functionality and durability to long-range reflective barcode labels, there are a host of measures you can employ to increase efficiency.
Plus, when the BIN numbers are entered into the system it makes it that much easier for new staff, trainees and managers to locate products as well thereby reducing time and increasing efficiency significantly.
Perform ABC Analysis
One of the best methods of ensuring optimization of warehousing is to conduct an ABC analysis. It an inventory categorization method that helps classify items into three groups according to their value, from the highest to the lowest.
- ‘A’ category products – Since the monetary value of these items are the most, they might need to be kept in a specially designated and secure area. In addition to this priority stock bringing in the most revenue, they will also require more reviews and will need to be re-ordered more frequently to ensure a continuous supply of the items.
- ‘B’ category products – These products include those that have an average monetary value and lower order volumes. As a result, they would have fewer reviews and lower reorder frequencies as well.
- ‘C’ category products – As items listed under this category have the lowest value, the most cost-effective warehousing strategy is to order these products in bulk.
By categorizing products in this manner, you will understand which products sell faster and thereby bring in a higher rate of return. So you can capitalize your efforts and time on selling more of these items in the long run.
Employ Maximum Storage Space
Since warehouse storage space is restricted, it is vital to employ every inch of available space. To achieve this, racks should extend horizontally and vertically as well. Yes, placing and retrieving items at the top of the rack will involve more time and effort but is a far more economical solution than having to move to a larger facility. Plus, when cargo is organized in a manner that facilitates ease of movement, for example, placing fast-moving products in more convenient, easy to reach places, it will make your warehousing operations that much more streamlined.
To facilitate utilizing maximum warehouse space and adopt more efficient warehouse practices, it is imperative to employ the most practical warehouse layout design. In order to achieve this, warehouse managers must:
- Investigate data on receiving, assembly, reserve storage, cross-docking, forward picking, special lines, and shipping.
- Quality check – inventory levels, receiving and shipping areas
The warehouse layout must allow for maximum product storage, a seamless flow of inbound and outbound operations and also involve value-add processes as well.
Pay attention to the Finer Details
David Piasecki, inventory management and warehouse operation consultant who has authored several books, explains how enterprises can employ various warehouse optimization strategies for storage. He says that when you pay attention to the finer details, it can lead to warehouse optimization. For example, pay attention to:
- Employee training and tools
- Utilizing low-cost equipment
- Optimizing aisle space
- Maintenance of equipment
- Employing good housekeeping practices
- Getting paperwork in order
- Managing miscellaneous storage
Automation of Data Collection
When picking, packing, and shipping procedures are automated, data collection becomes precise, and the need for staff to handle goods and orders reduces. Both warehouse control systems and warehouse management systems enable companies to increase real-time efficiency and also points to where bottlenecks are located.
When data collection is streamlined, warehouse managers have better information to work with. Though the cost is considerable, automation provides long-term gains because it diminishes errors, increases turnarounds, leads to accurate reporting and hence betters warehousing strategies as well.
Regardless of which warehousing optimization technique you employ, designing a clear-cut product and location strategy will help you increase placement and retrieval efficiency, thereby helping you reduce costs and bring in that much more revenue.
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