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What Is Warehouse Optimization & Why Does It Matter?

Posted by Drew Melendy on Mar 5, 2019 3:02:44 PM
Drew Melendy

Your warehouse operations are the backbone of your business. It affects everything from intake to your product reaching your customers’ doors. Whether you’re a small business or a large corporation, warehouse optimization should be the top-most concern. No other area of business has more potential for overall improvement in efficiency, accuracy, speed, and budget.

If you run a warehouse, you understand the number of moving parts that they encompass. Thus, it might feel impossible and overwhelming to manage it all, all the time. However, if you highlight the common warehouse pain-points, you get a clear picture of how to optimize each.  Here are the most common problems warehouses face and how they can be solved.


Lack of Inventory Visibility

When companies turn a blind eye to inventory management, they risk inventory shrinkage, overselling product, and/or tying up money in excessive inventory that isn’t moving quickly enough.

Inventory management starts with total transparency in stock visibility. Effective inventory visibility requires implementing digital solutions that provide real-time data. Therefore, it is imperative that you use a barcode-based labeling system.

An inventory management system can not only generate these barcode labels, but also track barcoded items at every step in their lifecycle- from the warehouse to shipment trucks, and into your customers’ hands.

From there, you can detect issues in your supply chain effectively, but also gather important information for future decisions. Detailed reports can be generated from this information that can help you to carry out quick, informed business decisions. These reports can tell you when to replenish specific inventory, as well as provide insights to market trends.

The benefit is two-fold, you’ll always be able to meet customer demand if you understand which products are doing well. You will also be prepared to skip over products that don’t sell well the next time you source your inventory.

Furthermore, inventory visibility is vital to multi-channel commerce. If you’re selling over multiple channels, it can become confusing where demand for certain products lives. Not to mention, it can create problems with overselling. If you want a coherent way of eliminating this issue, your best option is to invest in a system that syncs inventory across all selling channels.

Inefficient Picking

Picking is one of the most time-consuming and costly warehouse expenses, so it makes sense to optimize this the best you can. Without detailed location information for your products, pickers will be unable to locate items in your warehouse quickly. Confusion about item location results in slow movement, loss of time, and sometimes losing inventory altogether.

Investing in a good inventory management software can help make enormous strides in picking times. Not only will your pickers understand item locations, but they can also generate pick lists. Effective pick lists will streamline picker’s routes based on item locations, thus, significantly reducing travel times.

Layout Disorganization

Software can help you to accomplish a lot in terms of warehouse optimization. However, it’ll only be as effective as your warehouse layout. While there is no one-size-fits-all solution to this, you can determine the best layout for your warehouse by considering important factors.  This includes your racking solutions, the flow of picker routes, aisle width, docking locations, shipping areas, and available floor space.

Inaccurate Order Processing

Optimizing order management is crucial to increase order accuracy and speed-to-customer. The first step to improve speed and accuracy is to eliminate manual data entry. There is no task more complicated or time-consuming than entering customer information, quantities, and costs. Luckily there is no longer a reason to do so either.

With digital technology being so ubiquitous, affordable technologies have emerged to speed up order management processes. Printers and scanners can assist workers in bar code labeling that help fulfill orders quickly and effortlessly. Nimble and accurate order assembly gives you the ability to compete with fast-shipping companies.

Lack of Team Communication

No matter what practices you use to carry out warehouse optimization, the end result will always be the cumulative efforts of multiple departments. Each department should understand their responsibilities and how to work together to streamline their collective efforts efficiently.

Software can help you implement a system that can improve auditing and accountability by giving each staff member their own individual login. This provides opportunities to address mistakes between people and departments. 

The Takeaway

Warehouse optimization allows you to identify bottlenecks and constraints that keep your business slow, stagnant, and smaller than you'd like.

Optimizing your warehouse with best practices allows you use of your warehouse space, labor, and equipment to get your orders out accurately, with speed, at the lowest cost. Thus, crafting a long-term vision, systems, and disciplines for your warehouse management will help you grow and scale quickly and efficiently.

Topics: Warehouse Ops

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