Challenges in warehouse environments today have been rapid. Customers are demanding far more services, and those have been pushed up the supply chain to distribution centers that have not had to deal with these tasks previously. The days of unloading pallets, storing, getting orders, labeling and shipping those pallets out are becoming more and more rare. With the introduction of different forms of value-added services and drop ship programs, today’s warehouses have had to become far more nimble than in the past.
Analysis Is Critical
There are several vital items most warehouses must evaluate to optimize each component of the operations. First, you have to optimize space and warehouse storage capacity by utilizing inbound and receiving data. With this information, most optimize the warehouse to fit the product type.
Analyzing your inventory quantities along with tools such as yard management for your inbound will provide the knowledge to optimize your locations. Bulk vs. Pallet models is a great example. Mass amounts of one or the other will dictate what storage/inventory locations are needed and will allow you to adjust before arrival.
Then, based on how the warehouse will be set up, leveraging those tools to understand better what type of product is scheduled to arrive at your warehouse and when will provide the ability to stage trailers in the appropriate inbound doors for more efficient offloading and put-away.
Leverage Technology & Tools
There are also easy tools to build that provide a daily snapshot of the warehouse capacity, for both bulk and rack storage to ensure you are not over 85% utilization. Once it gets past that amount, inventory damage and dramatic inefficiencies for double handling are introduced.
Finally, it is essential to try and find space to make a dynamic warehouse location. This space always needs to be flexible to change new pick types. A good rule is to review the previous three months of sales history to allow you to set your warehouse with any “hot” models correctly.
In order to continue to evaluate not only the most effective way to store as much product as possible but also the most efficient way to put-away/pick these items, there are several methods to continue to monitor performance.
To ensure your picking efficiency is not negatively impacted, Heat Maps can be created based on top-selling models and then moved to locations closest in proximity to your outbound dock. Daily reports assist in replenishing tasks to ensure correct quantities and models are in these pickable locations. This reporting drives lower travel time – a good target is to have 80% of your top moving models in areas closest to the outbound dock.
Then, when processing the orders, the warehouse needs to plan for productivity proactively. To drive higher units per hour, utilizing conveyors, picking sequence and proper material handling equipment based on pick type all will increase the total PPH for your facility. Using indirect manpower when feasible also improves your overall PPH.
Finally, most warehouses now need to plan and dedicate space for value-added services. It is crucial that these areas receive focused attention and are correctly set up. Most VAS operations stuck in the middle of aisles in the warehouse or set up in back-corner lack visibility with key operational leadership. This lack of clarity comes back to negatively impact the P&L at the end of the month if not correctly accounted for and managed.
The Key To Efficiency
The key to a more efficient and productive warehouse is understanding your business and how you can affect its performance. Brainstorming meetings with key personnel on ideas that will positively impact what your results are is essential. Constant interaction with employees performing the work provides further insight on how to continually improve and gives them a sense of ownership as well). Employee recognition and constructive feedback daily keep the employees engaged and keeps them productive.