Amazon has turned into a one-stop shop for most of our online shopping. It even offers same-day delivery for some products! Have you ever wondered how Amazon does it? A large chunk of credit goes to its well-optimized warehouses. Amazon strategically places its warehouses near city centers and uses demand forecasting to keep them well stocked.
Warehouse optimization is imperative for faster order fulfillment. This article shares actionable tips you can implement to optimize your warehouse and make the most of its potential.
Let’s start by understanding the basics of warehouse optimization.
What is warehouse optimization?
A warehouse is used to store products in large quantities. Large-scale companies usually have a dedicated warehouse facility, whereas small businesses may utilize storage rooms or units for extra inventory.
If your warehouse isn’t managed correctly, problems such as inventory spoilage and shipping errors can arise. Warehouse optimization can help offset such problems.
In essence, warehouse optimization is about efficiently managing a warehouse so you can make the most of the space while streamlining the movement of inventory and workers.
Tips to improve workflow efficiency in the warehouse
As more and more people shop online, businesses are required to store more inventory so they don’t miss out on potential customers due to stockouts (when an item is out of stock). This makes it essential to properly manage a warehouse so customers receive ordered items on time.
Here are some tips that will help you improve your workflow efficiency and make the most of your warehouse’s potential:
#1 Optimize warehouse space
To best utilize a warehouse, consider vertical space for storage. By adding taller storage racks, you’ll be able to hold more inventory without expansion costs.
It’s essential to designate storage areas and staging lanes so inventory flows smoothly. Amazon divides its warehouses into five storage areas:
- Books and magazines are stored in the library prime storage.
- Full-case products with higher demand are stored in the pallet prime storage.
- Items that are picked in less-than-case quantities are stored in the case flow prime storage.
- Irregular shaped and low-demand products are placed in the reserve storage area.
- Smaller and mid-demand products are stored in the miscellaneous storage area.
We all know that terrible feeling of misplacing our keys! By keeping them in a designated place we can prevent that sense of panic. Designating specific areas for inventory in a warehouse can eliminate anxiety while saving time and money.
Adding easy-to-read labels on pallet racks, cartons, and storage shelves can create order. You can also maximize storage space by utilizing appropriate floor space.
Providing visual cues (signs and arrows) throughout the warehouse will help your workers navigate the space better. You should also install proper lighting across the warehouse to prevent injury.
#2 Standardize workflow
In 1913, Henry Ford introduced the first moving assembly line. It optimized the mass production of automobiles and decreased the time to build a car from 12 hours to just 1 hour and 33 minutes. Ford broke down the entire manufacturing process into a series of steps and standardized it through the assembly line.
This concept works well in a warehouse. You should establish a standardized workflow to manage the products –from a product’s entry until it ships. This gives your employees clarity about operating in the warehouse and takes out the guesswork.
As the process gets standardized, you can set benchmarks for measuring employee performance. You should regularly audit your workflow to identify bottlenecks and optimize them for better efficiency.
Investing in training for employees can help them use the equipment better, boost their productivity, and minimize workplace-related injuries. Creating a standardized process also makes it easier to train new employees.
#3 Improve picking efficiency
As you analyze your sales data, you will be able to spot high-demand products. Since these items are frequently picked from the warehouse, place them in the most accessible locations. Placing these products near the shipping area drastically reduces the travel time that your employees take to pick them up.
The design and layout of a warehouse also plays an essential role in picking. For instance, putting the best sellers on high shelves will slow down the operation. To avoid confusion, it is ideal to avoid mixing multiple SKUs in the same location.
Using a warehouse management system (WMS) can help speed up your packing process. It can reduce the time spent in locating the items, as it can show the precise location where the specific item is stored.
#4 Upgrade technology
Amazon has a separate division known as “Amazon Robotics” for warehousing solutions using robots. The robots are so advanced that they can pick the items without requiring any sort of human assistance. Such automation has empowered Amazon to boost its warehousing activities. Presently, Amazon has more than 2,000,000 robots in its warehouses.
Technology can also help in optimizing your warehouse’s receiving process. In the case of manual receiving, an employee compares the actual shipment with the items present in the invoice to spot any discrepancies. This method has a chance of human error and can be time-consuming,
A solution to this is to automate warehouse receiving using barcode scanners. Your staff just needs to scan the product during unloading, and the warehouse management software will cross-reference it with the invoice.
#5 Adopt lean inventory
Lean manufacturing consists of optimizing your manufacturing process to boost manufacturing productivity and minimizes production waste, enabling you to lower overall costs.
Lean inventory works on the same “lean” principle, i.e., minimizing inventory waste. Warehouse space is limited and every item stored takes up precious real estate and comes with a cost. Piling excessive, slow-moving inventory can lead to overall higher storage costs.
Adopting lean inventory prevents excessive inventory to minimize storage costs.
Warehouse optimization using DEAR Systems
Optimization of warehouses has multifaceted benefits. Besides making the warehousing workflow more efficient, it also aids in better inventory control and faster order processing.
To compete with modern businesses, you need to ditch the outdated spreadsheets and invest in a cutting-edge warehouse management system (WMS). If you are looking for robust software to optimize your warehouse operations, look no further and try DEAR Systems.
DEAR Systems is a cloud-based warehouse management platform that provides real-time visibility into your warehousing operations. You can streamline your receiving process by scanning shipments using barcode scanners. The scanned products are saved in your database, with the precise storage location.
To discover how DEAR Systems can help with your warehouse optimization, book a call with our experts today!