Running a Successful Warehouse
Warehousing and distribution is a complex and competitive sector. The warehouse can be the backbone of a company's supply chain, influencing everything from inventory management to consumer satisfaction. As a third-party logistics (3PL) provider, running a successful warehouse will help you keep your customers and their consumers happy while ensuring that your business stays profitable. However, choosing the right warehouse management system (WMS) can be tricky because there are so many options out there that it becomes difficult to decide which one works best for your business needs and budget.
What is warehouse management?
Warehouse management is the process of planning, organizing, directing, and controlling the flow of goods and materials from point of origin to point of consumption. It includes the physical handling of goods, materials, and merchandise within a warehouse or storage facility. Warehouse managers are responsible for inventory control procedures such as cycle counting, cycle audits, and replenishment; inventory control policies; employee training programs; safety programs; purchasing methods; production control procedures (e.g., just-in-time); warehouse space utilization methods (e.g., bin layout); quality assurance programs; shipping procedures (e.g., pick/pack); and receiving functions. These activities involve both manual labor as well as technological systems such as automated conveyor belts or forklifts and the software used to organize all processes.
Six fundamentals of successful warehouse operations
1. Maximize Operational Efficiency
Warehouse operational efficiency is the ability to run your warehouse efficiently. Efficiency is the ratio of output to input, or how many units of goods are produced with a given amount of resources. You can achieve this by maximizing and optimizing all available warehouse space, increasing labor efficiency and productivity.
When setting up your warehouse environment, you want to make sure that it has a unique layout that makes sense for what you're doing. For example, if you service customers that sell household goods online, having a large open space with no cubbies might work better than having lots of cubbies but not enough room for employees to walk around comfortably. Another way would be by making sure there aren't any unnecessary steps in processes like order picking because this will increase time spent on each order which means fewer orders being filled per hour worked, which reduces overall profitability.
You should strive for optimum operational efficiency in the following areas: inventory management, supply chain management, and customer service. This includes managing the flow of products from suppliers and vendors to customers or distributors, coordinating sales forecasts with production plans, and controlling business costs.
2. Practice Good Inventory Management
Warehouse inventory management is managing the flow of goods into, within, and out of a warehouse or storage facility. It is a critical component of warehouse operations, as it involves planning and controlling inventory levels and the movement of goods within the warehouse.
Warehouse inventory management involves several steps:
- Planning: To achieve optimal efficiency in your operation, you need to have an accurate understanding of where you are today so that you can make informed decisions about where to go next. That means aligning your goals with those of other stakeholders (e.g., customers), as well as identifying any gaps between what is currently happening versus what would ideally occur at this point (e.g., if all merchandise was picked at once per hour). This also requires taking into account how current conditions may change over time—for example, if there's been an increase in deliveries while picking rates remain constant.
- Monitoring: Warehouse managers should watch closely for changes that could affect their inventory levels. These changes might include new products being added or old ones being discontinued by suppliers; sudden increases or decreases in demand for certain items; delays caused by weather conditions outside normal predictability parameters; etcetera. As soon as something like this happens, adjustments will need to be made not only to keep up with demand but also to avoid running out completely during peak periods such as Black Friday sales events when everyone comes out shopping together!
3. Provide Exceptional Customer Service
In ecommerce, customer service is about ensuring that the consumer gets the right product at the right time (order accuracy). It also ensures that the consumer will return to buy again. Fulfilling these requirements will go a long way to making sure your customers are happy with your warehouse’s service.
For 3PLs, the primary customer is another business. A good 3PL informs their customer of any potential delays that may affect your schedule. If a 3PL is sending a shipment of a product and they know there's going to be a delay, it's their responsibility to contact their customer so they can take action. Their number one goal is to make sure that your order arrives as planned—and if they aren't able to do that, then they'll do everything in their power to give an alternative option.
4. Warehouse Safety and Security
Safety and security are the most important aspects of running a successful warehouse. Warehouse safety is regulated by OSHA (Occupational Safety and Health Administration), which sets standards for workplace safety in the United States. The best way to ensure that your warehouse will be compliant with OSHA regulations is to adhere to all of their requirements. Some of these include:
- Safety policies: You should have a clear set of written rules outlining how employees can safely behave in your warehouse, including the actions they should take in case something goes wrong or a hazard arises.
- Safety training: All employees should receive proper training on how to handle hazardous materials or equipment, as well as general procedures for preventing injuries at work.
- Proper Equipment: Employees should wear protective gear such as earplugs if needed and make sure all machinery has guards installed where appropriate.
- Electrical Hazards Mitigation: Inspect electrical cords regularly for exposed wires or frayed insulation; replace them if damaged.
If you work in a warehouse and do not wear the proper safety gear while operating machinery or handling chemicals, you could end up seriously injured. For example, if you are working with chemicals and don't have gloves on when handling them, then your hands will become burned from the chemical exposure.
5. Warehouse Innovation and New Technologies
Innovation and technology are keys to running a successful warehouse. RFID technology allows you to track every item in your warehouse and assign inventory to specific employees for pick-up or delivery. Drones can also be used for inventory management by flying over the facility to see what items need restocking or what areas require better lighting. 3D printing is another way you can use innovation in your warehouse by creating custom packaging that fits your products like a glove!
Innovation can also be used to help you get the most out of your warehouse employees. You can use robotics for picking, packing, and sorting your inventory. This will allow you to increase efficiency and productivity while reducing costs. It also reduces accidents by minimizing worker fatigue and injuries from repetitive tasks.
Even more critical to your warehouse’s success than physical automation in the form of robotics or drones is digital automation, the software used to keep track of all day-to-day operations within the warehouse. Cloud-based WMS software continues to rank as the number one industry-leading software used to automate routine tasks with features like directed putaway and can significantly optimize operations for efficiency. Additionally, if your warehouse serves ecommerce businesses, you may benefit from implementing order management system (OMS) software that intelligently routes orders and takes the headaches out of returns with automated RMAs.
For more information about what technology the most successful warehouses are using as well as other industry-specific insights and statistics, download the 2022 3PL Warehouse Benchmark Report.
6. Develop a System of Organization
If you've ever visited a warehouse, you know that it's an organized space. There are rows and rows of shelves holding everything from books to toilet paper to soda cans. Yet these items are not placed haphazardly throughout the warehouse; rather, they're organized into categories and arranged on shelves in a way that makes it easy for workers to find what they need in order to fulfill customer orders quickly and efficiently.
Organization is very important when running your own warehouse business because it helps keep everything running smoothly during peak times such as holidays or heavy demand seasons like back-to-school clothing sales or Black Friday sales events. In addition, good inventory management is key for any business owner who wants their company's products available when customers want them most—and with good organization comes better inventory management!
Tips for Organizing Your Warehouse
Use labels and signs.
Use clearly marked labels to organize items on shelves and bins, as well as signs that indicate where certain products are stored. Labels can be written directly on the item itself (such as with a Sharpie), or they can be placed in front of each product on the shelf. For example, if you're storing books on a shelf by genre, then place a sign with the name of the genre in front of that section. This helps customers staff to find what they're looking for quickly and easily.
Use the right technology.
Be smart about your technology. As the manager of a warehouse, you need to be sure that your team has all the right tools for the job. When it comes to warehouses, this can mean anything from barcode scanners to labeling systems to computer software. If a warehouse is not using the right technology, it could lead to a number of problems, including inaccurate inventory and inefficient workflows.
Automation software can help you streamline operations by monitoring workflow speed and efficiency. It also makes it easier for staff members by allowing them to perform tasks automatically rather than manually.
WMS helps control inventory levels within each department so that they're always accurate and up-to-date at all times while also helping with budgeting needs across departments as well as overall operational costs involved with running an entire facility. A WMS will keep your warehouse on schedule every day without any delays due to mismanagement issues which might otherwise arise if there weren't proper oversight over such matters before they became critical ones requiring immediate action.
Analyze performance metrics and track progress.
As your warehouse operations grow, you'll need to keep an eye on the numbers that matter most: throughput, inventory turns, labor efficiency (hours per cubic foot), and costs per unit handled.
The best way to track these metrics is through a reporting tool that provides visibility into key performance indicators (KPIs). This will enable you to recognize trends and make necessary adjustments in real time. You'll also want to consider how much space is available for storage; if space is tight and needs are high, it may be worth investing in more space or equipment.
Leveraging a warehouse management system (WMS) to handle ever-changing order demands. A warehouse management systemWMS is a software solution used by warehouses to manage the entire process of inventory management. A WMS allows you to track and control shipments, manage orders, capture data on goods received and shipped, create reports, and analyze results. A WMS can help in improving efficiency at your warehouse by reducing costs, increasing productivity, and providing accurate information about stock levels so that you can make timely decisions on what items need replenishing. It will also help reduce errors by automating processes such as picking/packing orders or issuing goods from stockroom shelves.
Extensiv 3PL Warehouse Manager offers multiple reporting options as well as dashboards such as the Outbound Productivity and Labor Analytics dashboards that will help you keep track of warehouse performance over specific timeframes and by individual employees.
How do you organize a warehouse efficiently?
Warehouse organization is one of the most important things in the supply chain. It involves all the processes that take place within your warehouse, from ordering materials to delivery. By having a good system in place, you can ensure that your shipments are arriving on time and at their intended destination. The key is to think about how each process fits into your overall plan for managing inventory and making sure that everything gets where it needs to be when it needs to be there.
What are the key factors that make a warehouse successful?
One of the key factors that make a warehouse successful is having the right warehouse management software. WMS simplifies and automates many of the processes in your warehousing operations.
Warehouse management is a crucial part of the supply chain, and it can be complex. The process involves managing operations in warehouses and distribution centers, as well as managing information related to those operations. Having a good WMS will help manage these processes more efficiently, saving you time and money while improving customer satisfaction levels.
What is the best WMS for better warehouse performance?
The best WMS is the one that offers you the tools and features you need. If you're looking for the best warehouse management system, here are some questions to ask yourself: Do I want an online solution for my business? Will this program integrate well with other applications we use? Is there support available if something goes wrong?
A well-organized warehouse is a productive and efficient warehouse. It's not just about the inventory and storage—it's also about getting those products to customers quickly and efficiently. A WMS can help you achieve that. We hope this article has given you some ideas on how to keep your warehouse running smoothly and productively. If you want help implementing these best practices into your own operation, contact us today!
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