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Warehouse Efficiency and Your Bottom Line

warehouse efficiency

Sales, operations and finance are critical functions for any business. Most organizations spend a lot of time analyzing their sales pipeline, extending existing client relationships, monitoring their financial statements and managing cash. Operations deserves that same attention; otherwise, companies can be inefficient, havegaps in performance and possibly lose customers.

As a supply chain management firm, we are often asked for ideas to improve the effectiveness of companies’ warehouse operations. Often times the areas of improvement are unique to the company; however, there are certainly some commonalities that consistently impact all companies’ performance.

If you are a company looking to improve your warehouse operations, consider the following tips to increase efficiency.

STANDARDIZE YOUR PROCESS

All repetitive activities should be standardized and documented. Repeatable processes create efficiencies, reduce errors and help with labor planning. Documented processes also help to accelerate the on-boarding of new employees and contribute to their long-term success.

MANAGE LABOR EFFECTIVELY

Repeatable processes allow you to develop work standards for quality and productivity. As order volumes change, these standards can help forecast headcount requirements. Be sure not to forget regular or seasonal fluctuations in your business. Plan ahead to avoid excessive overtime or temporary labor usage.

BE SMART ABOUT SPACE UTILIZATION

If labor is your largest operating expense, space is typically a close second. Facility layout, storage mediums and a process for organization like 5S help to maximize your space, reduce accidents and increase efficiency. As the products you distribute and their volumes change, regular optimization is required for maximum performance.

LET TECHNOLOGY ACCELERATE YOUR BUSINESS

Once processes are standardized, people are operating efficiently and space is optimized, look to technology for further enhancements to your operational performance and quality. Material handling equipment, radio frequency picking and the appropriate warehouse management system can drive further productivity, inventory control and increase service levels.

MONITOR THE HEALTH OF YOUR OPERATIONS

A company that is successful never stops striving for excellence. Key performance indicators beyond productivity metrics and service levels need to be established for continuous improvement. Metrics shouldn’t be work, but the byproduct of your work. Systemically establish metrics that are important to the health of your operations so that you can focus your attention on monitoring trends and identifying areas for continuous improvement rather than gathering data.

SAFETY DRIVES SUCCESS

A safety first culture helps to avoid costly consequences like product or equipment damage, injuries and increased worker’s compensation insurance. Don’t forget about the intangible consequences like the rework or decreased morale resulting from accidents. Make safety a priority for continued operational health.

CHOOSE THE BEST FREIGHT MODE AND PARTNER

Identifying the appropriate carrier for your freight and looking at creative options like regional carriers, zone skipping and pooled distribution can have a big impact on your transportation spend. But don’t forget … there is more to carrier selection than price. Delays, damages or accidents can be just as detrimental to your distribution center’s success, so be sure to take a balanced approach when evaluating your shipping partner.

There are many ways to drive efficiency in your warehouse operations and improve your bottom line. Without an efficient warehouse operation, quality suffers and so do your customers.

For other ideas on ways to improve your warehouse efficiency, your bottom line and customer loyalty, contact FIDELITONE.

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