Warehouse productivity is the heart of any business. Here are ways to make sure that heart is healthy and stays that way.
The warehouse is the nerve center of any business. It’s like having numerous cells (the warehouse workers) working non-stop to keep the body (the warehouse) going and working. It is therefore important that the nerve center is healthy, and so are the cells.
Nope, we’re not here to talk about biology. That analogy is meant to paint a picture of warehouse operations and productivity.
Tips on Warehouse Productivity
Warehouse professionals may often be unseen or behind the scenes but, without them, the successful business customers interface will never happen. Customers will have a bad experience, there will be disorder, missed opportunities, and costly wastage.
So how do we improve warehouse productivity? Let the experts weigh in:
Tip #1: Keep up to date with warehouse management technology
Fred Guelen, President of North America and CFO, Planon — “Keep the facility running, no matter what. Warehouses (and businesses in general) are on the cusp of a major transformation. Over the next decade, new ‘smart’ technology assets will enter offices, facilities, factories, and even homes, in numbers we couldn’t imagine 5 years ago.
“We’re also seeing the rapid convergence of nanotechnology, biotechnology, materials technology, information, and communication technology. If this wasn’t enough, there’s also the acceleration of technological developments and growing information exchange between developed and developing countries and the interaction that must take place between multiple systems.”
Tip #2: Track and communicate KPIs to empower employees
Hannah Lincoln, Lead Solution Consultant, itas — “Track and communicate KPIs effectively. You can only improve warehouse productivity if you know:
- What key metrics are you measuring productivity with?
- What is your baseline (i.e. where are you starting from)?
- What is your target?
- How are you tracking individual performance against those targets?
“Put up a dashboard displaying how many orders they have picked today, average pick time, orders left to pick, and so forth, on a big screen. This can be done either on a team or an individual level. You can even make it a competition.”
Tip #3: Develop bundles when possible which also means creating new SKUs
Jamie Saltos, Marketing Director, Kapco Global — “By implementing custom kitting strategies. Grouping and bagging components that are often used together into custom kits can help reduce inventory handling time and make better use of warehouse storage space.”
Tip #4: Automate your inventory management
Jason Sentell, Product Marketing Manager, Wasp — “By using an automated inventory management system…Incorporating one of these systems into your business not only ensures that you have more accurate inventory levels (than keeping track of inventory on paper or in Excel), but these types of systems can also increase your profitability (often between 20 and 50%).
Additionally, these types of systems can help optimize warehouse productivity by saving space, maximizing labor in the warehouse, and reducing wear and tear on fixed assets.”
Tip #5: Remember FIFO (First in, first out)
Jennifer Martin, Business Coach and Work/Life Balance Expert — “Have systems in place that are designed to help you achieve that goal [of a productive warehouse]. Top of that list is making sure that your top-selling (or fastest-moving) products are the easiest to get to.”
Tip #6: Maximize space by stacking high
Joe Schodowski, President and CEO, Shelving Inc. — “Go up not out. Use the maximum existing vertical space. Fight for your air rights, compress shelf levels, and narrow the aisles in.”
Tip #7: Remind your workers about self-respect and give them dignity
Jonathan Gibaud, Innovation and Performance Strategist, UN, NHS, and Unilever — “In our warehouses, we have one rule: keep your shoes/boots polished. Mindful respect in maintaining a well-kept pair of shoes transforms how warehouse workers respect themselves, their environment, and their work.”
Tip #8: Make sure the workers collaborate on improving systems
Joseph Flahiff, Strategic Leadership, and Culture Design Coach and Author — “Ask the people who work in the warehouse to start thinking about it, and on a regular, periodic basis, review and discuss how they might work better. I encourage people to put a meeting on a calendar, once a month, at least to come together for an hour or 90 minutes (typically takes a good 90 minutes) to discuss ideas for improvement.”
Tip #9: Use data to work with your vendors better
Lior Krolewicz, Founder, Yael Consulting — “Reexamine vendor lead time. When working as an inventory manager at a very large retail company, I realized that vendor’s delivery dates did not correlate well with the system lead time they committed to. At this point, I mined the database for all vendors’ historical delivery time and created a scorecard for each vendor.”
“In many instances,” she elaborated, “we found vendors that the system said had a lead time of 30 days but were delivering on an average of 15 days. In this case, we presented the information to the vendor and got them to commit to a 16 day lead time. In other cases, we found vendors who were constantly late, which clearly results in issues like out-of-stock items. Now we had performance data to present to the vendor and had a talk with them to deliver on promises, and what got measured, naturally, got improved.”
Tip #10: Apply the best practices of a lean culture
Mark Lefcowitz, Process/Work Systems Engineer, Project Manager and Senior Data/Business Analyst, MCL & Associates, Inc. — “Adopt and maintain a Just-In-Time and Lean culture within their organization, from top to bottom. Emphasis should be on the incremental adoption of the time-tested tools developed by Toyota and Motorola that are commonly referred to as Lean Six Sigma.”
Tip #11: Hire well especially when it comes to management
Mina Malek, Logistics Manager and Buying Officer, Gym And Fitness — “[By] Investing in an efficient warehouse manager. Investing in an effective warehouse manager who has a great ability to efficiently manage all aspects of the warehouse and the team.”
Tip #12: Implement a system designed specifically for you
Nancy Rohman, Co-Founder, President, and Chief Financial Officer, 3PL Central — “The short answer is simple: by implementing a Warehouse Management System (WMS) that’s been designed for their unique needs.”
Tip #13: Make the goals clear to everyone
Richard Cushing, Certified Demand Driven Planner and Senior Solution Architect at RKL eSolutions, LLC — “If we understand that the goal of a warehouse (in a for-profit organization) is to make money for the company, then two – and only two – system metrics are significant in measuring the warehouse’s contribution: 1) return on investment (ROI), and 2) due-date performance. Therefore, every measure of efficiency must be considered in these terms: does a specific action increase ROI without sacrificing due-date performance; or does a specific action improve due-date performance without sacrificing ROI?”
Tip #14: Make sure your SKUs move fast
Ron Atapattu, Founder and President, Overseas Cargo, Inc. (ShipOCI) — “Constantly reviewing the velocity of your SKUs to optimize slotting.”
Tip #15: Set the proper parameters by looking at your numbers
William Bauer, Managing Director, Royce Leather — “You can’t improve something you haven’t measured. Ask yourself…Does your operation capture and manage critical KPIs? Do you know your critical productivity and costs on shipped orders, cost per box, and cost per line shipped? How can we assess and put in place cost reduction measures if we don’t know the baseline? What do various types of errors cost? What do returns cost?”
Warehouse Productivity Metrics
- Order Picking Accuracy (percent by order) – Shows how accurately warehouse employees pick products for orders
- Average Warehouse Capacity Used – Capacity utilization is important because a warehouse is a financial asset
- Peak Warehouse Capacity Used – Know how much your warehouse can really take. The goal is to use 100%
- On-time Shipments – Customer experience can make or break a business, and receiving orders on time is a good place to start
- Inventory Count Accuracy by Location – This is important to avoid pilferage or theft and unsold items left unaccounted for
We leave you with more tips from Mal Walker, a specialist in Distribution Center Design, Operations Management, Materials Handling, and Third Party Logistics: