16 tips to boost your warehouse productivity

16 tips to boost your warehouse productivity

Warehousing is one of the most critical elements in a wholesale or distribution operation. For this reason, all distributors are constantly looking for ways to increase warehouse productivity. In this article, I will go over the signs that point toward warehouse issues and how to solve them.

How to monitor warehouse productivity?

In “Improve your efficiency with the right Distribution KPIs” I reviewed the importance of Key Performance Indexes in making your distribution operation more efficient and maximizing your profits. The best way to monitor your warehouse productivity is through the KPI you selected, combined with feedback from supervision. This is a list of indicators that point to potential issues affecting warehouse productivity.

• Low order picking accuracy
• High return ratio
• Space utilization close to 100%
• Low on-time deliveries
• Low inventory accuracy
• Overstocking reflected in low average inventory turnover
• Low gross profit
• High turnover of warehouse personnel
• Lack of communication between processes
• High utility bills
• Increasing maintenance costs of warehouse equipment
• Aisles become an ever-increasing extension of the receiving area

16 Tips to boost your warehouse productivity

Whenever any of the issues listed above become commonplace rather than the exception, it is time for you to take corrective action to increase your warehouse productivity. It is hard to give you a bullet-proof formula to boost your warehouse productivity because the set of corrective actions to be taken will vary depending on the specific characteristics of your operation and the problems detected. As a reference or guide, I have provided here a list of 15 tips that could increase your warehouse productivity.

1. Implement a location numbering system. Not having a mapped warehouse to pinpoint every bin might lead to inefficiencies. In “Design your warehouse layout & bin labels for WM success” we cover this topic extensively.
2. Implement incentive payment. Labor cost is a very important component of warehouse costs. That is why most distributors opt for a minimum wage policy complemented with performance-based bonuses. This will motivate your personnel, reduce employee turnover, and increase their productivity as a result.
3. Provide proper training. Hiring quality personnel is essential, but if you want an efficient operation you need to provide adequate and continuous training.
4. Have redundant workforce. Job turnover is typically high in warehouse staff. One way to avoid inefficiencies due to employee absences is by cross-training warehouse workers to perform different tasks.
5. Assign the most experienced workers to put-away tasks. Storage is the warehouse process where errors affect all other processes. Use experienced employees at receiving to avoid errors as they know the products and are familiar with the warehouse layout. New employees should start with tasks that allow them to become familiar with product locations, such as picking.
6. Maintain your warehouse equipment. Forklifts, trucks, and other equipment used in the warehouse need regular maintenance. A preventive maintenance plan avoids breakdowns that affect the operation and increase costs.
7. Standardize all processes. All warehouse tasks should have a written document that explains the flow of required activities and how to perform them. This will reduce errors.
8. Schedule regular cycle counts. Perform cycle counts, analyze their discrepancies and act to prevent them from happening again.
9. Use handheld devices. Assign barcode labels to products, cases, pallets, and warehouse locations, and use barcode-enabled handheld devices throughout the process. This will improve warehouse efficiency and productivity.
10. Implement a sound warehouse management system. Distributors using WMS have more efficient and accurate warehousing processes and lower overall logistics costs. But be careful to choose the WMS that best suits your operation.
11. Use cross-docking to save time. If you have fast-moving products, you can save time with cross-docking. Instead of putting these products back on the shelf only to have them picked a few hours later, direct them to a temporary staging area for scanning and inventory purposes.
12. Review your warehouse layout and rack arrangements. Warehouse layout design affects all warehouse processes, from receiving to warehousing, picking, and delivery. Of all warehouse processes, picking occupies more than 50% of a warehouse’s labor. This isn’t surprising considering that, despite warehouse technological advances in areas such as automated storage and retrieval systems, picking remains a largely human-led process.
13. Switch to LED! If your utility bill is going up, you might consider upgrading your lighting system to LED technology. With the power efficiency and longevity of LED lights, they produce more illumination than conventional bulbs of similar wattage, require little to no maintenance over their lifetime, and produce up to 100,000 hours of light. 
14. Mezzanine storage. If your space usage is approaching full capacity and you mantain lean processes, you might consider building mezzanine storage before the trauma associated with moving to a larger facility.
15. Integrate your systems. An integrated WMS, DSD order taking, and ERP software package will reduce inefficiencies and help you track down damaging situations.
16. Select your vendors to yield positive cash flows. Vendor selection is one of the most critical activities a distributor must undertake. Your vendors will be delivering products to produce your goods or for you to sell to your customers. You need to select reliable and loyal vendors that yield a positive “Vendor Financial Cycle”, that is, that you sell and collect the money of the products purchased before the time to pay the vendor.

I hope this article has been helpful. I will continue to post information related to warehouse management, distribution practices and trends, and the general economy. If you are interested in this article or would like to learn more about LaceUp Solutions, please register to stay updated on future articles.

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