Warehouses are an indispensable requirement for manufacturing, export, import and online businesses. These distribution centers are the caretakers of the goods of such firms until they are delivered safely. Preparing and maintaining inventory and ensuring smooth warehouse operations is no child’s play.
A large chunk of the business’s stake is involved in a warehouse. And all of this comes with a price tag. From dealing with optimized distribution to timely deliveries and increased labor productivity to superior customer experience, warehouse operations have to be cost-controlled yet efficient.
The growth of online shopping, urbanization, and new technology has led warehouse operations to be the talk of the town. To retain customers, your business needs to ensure prompt and accurate shipments. This is where warehouse operations come into play. And that is going to be the focal point of this article.
We will explore the importance of warehouse operations, how warehouse operations work, and we will provide you with 10 proven ways to improve warehouse operations for better productivity and greater return on investments. So read on!
The Importance Of Warehouse Operations
For product based businesses, warehouse operations are critical in order to keep your costs low, productivity optimized, and customers happy.
Inefficient and ineffective warehouse operations leads to many negative outcomes:
- Misallocation of inventory or lost inventory
- Improper inventory levels and inability to adequately gauge stock-outs
- Mis-picks and mis-shipments and order inaccuracies
- Customer complaints due to errors
To avoid negligence of warehouse operations, business owners and warehousing companies must employ certain practices that keep the operations fine-tuned. The below are some of the most important practices and operations that must be addressed.
Effective Receiving Standards and Operations
Everything in a warehouse starts with accurate and efficient receiving of inventory. If you get it wrong from the beginning, problems will continue throughout the entire warehouse operations process. On the other hand, correct and timely receiving makes a positive impact on all of the warehouse and inventory management process.
Proper Inventory Checks And Balances
A warehouse is a centralized location to keep all your goods. With loads of products touching your dock every month or year, it is through better inventory management that you can keep track of your products and ensure faster deliveries. From proper cycle and inventory counts to accurate inventory reporting, warehouse operations are kept on track with the right inventory processes, procedures, and technology.
Efficient Picking, Packing, and Shipping Processes
Warehouse operations are extremely helpful in streamlining and optimizing the packing of the goods after they are organized in the inventory. Through better warehouse management, products are graded, priced, packed, and shipped in the correct packaging (minimizing any chances of damage) and prepared accurately with all proper contents and in proper quantities. Furthermore, correct warehouse operations ensure that orders are shipped using the correct shipping service and deliver on time.
Seamless Returns Processing and Management
In a world of instant feedback, managing the returns process within the warehouse function is of utmost concern. One bad review on social media can start a negative stream of momentum that negatively impacts custom expectations and ultimately lead to lost sales. A finely tuned warehouse management system and processes that are geared towards streamlining the returns process is essential if an order is sent in error or a customer wishes to return product.
Credibility Via Improved Risk Management
Warehouse operations are important for increased credibility. One way to do that is through improved risk management. Price fluctuations are kept in control, thanks to risk managing operations. Not only with price variation, but it also deals with the risk of product damage, fire and theft as well. Because of warehouse product risk operations, the customer has a greater chance of getting reimbursed for their loss. This builds credibility, enough to bring back loyal customers.
How Do Warehouse Operations Work?
Amazon’s fulfillment centers have revolutionized the way traditional warehouses work, thanks to the recent surge in the number of people creating Amazon FBA businesses and starting entrepreneurial ventures. Business owners and companies have to put an enormous amount of effort into warehouse operations that span all sorts of technologies – from product repricing tools that can affect product distribution, to warehouse management systems (WMS) which impact the entire warehouse operation.
Warehouse management tools are gaining popularity because by leveraging tech in your system, the process becomes automated and streamlined. Strategic placement of the inventory data is now possible with these tools that enhance warehouse efficiency.
But at the end of the day, there are still a seemingly stable set of warehouse operations procedures that must be optimized, be it through high tech solutions or good old fashioned processes and procedures that are executed by human labor.
Here is the step-by-step breakdown of the most standard warehouse warehouse operations procedures that take place after goods are purchased and forwarded to the physical warehouse.
- Cross-Docking (if needed)
- Freight Forwarding Services (shipping product from the supplier to the warehouse)
- Sorting, Organizing and Receiving of Product
- Inventory Management and Asset Tracking
- Picking and Packing and Fulfillment of Orders (including route optimization and error reduction strategies)
- Packaging of Product for Shipment
- Reverse Logistics and Returns Management
- Maintaining the warehouse
The above-mentioned operations are just a glance over the complete spectrum of full-service warehousing operations.
10 Proven Ways To Improve Warehouse Operations
Do you need to have better control over your inventory management? If your warehouse has any areas of weakness, you need to find ways to improve warehouse operations for your sustainability and growth.
Read further if you are on the lookout for some valid pointers to elevate your warehouse operation. These pointers are a classic approach to quick and accurate shipments and delivery route optimization, guaranteed customer satisfaction, and will yield a substantial return on invested capital.
1) Implement A Practical Layout
The practical layout design of a warehouse is crucial for its optimal operations. This involves strategic planning to utilize the entire warehouse space to its maximum potential. It helps in hitch-free operations as far as the infrastructure is concerned.
When the layout of the warehouse is planned in a logical sequence, not only does efficiency increase but it also gives a boost to productivity. The drastic cut down of costs is visible just because of a tactically planned configuration and more storage space.
These tactics may include:
- Knowing the budget
- Knowledge of available space
- Having a defined workflow
- Understanding the best accessibility points
- Tracking the number of employees
The best practice would be to get into these in the planning phase to see if they sync in with your business needs or not. You wouldn’t want to bear the dent of additional costs of alterations once the construction has been completed.
2) Strong Leadership
Strong leadership is pivotal when it comes to an organization’s success. Don’t just take leadership as someone who has authority. True leadership enhances sustainability through a willing workforce.
A knowledgeable operations or warehouse manager makes the company keep up with the current and dynamically changing demands. This step helps in streamlining the whole process towards the designated goals. That may include effective utilization of space, workforce, and equipment.
Here are some of the strengths a warehouse operations manager should possess:
- Specialized expertise in warehousing equipment and procedure
- Keeping a bird’s-eye view of the space and the operations
- Taking help from intelligent data analytics
- Monitoring key performance indicators (KPIs)
- Better forecasting and scheduling
- Visibility of supply chain
- Handling the warehouse’s staffing needs
A smart manager will do all of this and more, keeping the available options in mind. Good leadership will define objectives, course of action, workflow, and policies that will apply to every individual module. Investing in an expert manager will change the game.
3) Adapt to Changes
While for some of us change may be intimidating, we sure can’t escape it as it is bound to happen sooner or later. The term ‘changing strategies’ used here has a broad spectrum. It could be generalized changing strategies, tech-related or dynamic management strategies.
When the pandemic hit in 2020, the wisest thing to do was to adapt to social distancing and remote working. During this period of uncertainty, processes that were marked as resilient turned out to be the most vulnerable. The best solution to cope with these changes was to come up with new strategies. Later on, these strategies proved more beneficial than the previous ones.
Another example comes from the sudden changes in supply chain management. It becomes crucial to tailor your operations to these rapid changes by branching out and being open to more suppliers in the market.
Leaving the unorthodox methodologies to inculcate efficient tools like the best warehouse management systems & software (WMS) will boost your warehouse operations. This change can be particularly considerable when your current numbers are not coinciding with your future goals.
4) Organize Your Inventory
In simpler words, an organized inventory helps in locating goods easily, saving time, and creating less confusion and operational havoc. This practice leads to fast-track processing of customer orders.
Take IKEA for example. It relies on everything being at the right place at the right time in their warehouse. IKEA’s philosophy is accurate record keeping and replenishment of the inventory based on the minimum and maximum settings. To meet the surge of IKEA’s consumer demand, this organizing strategy was adopted.
With the dynamic and face-paced lifestyle, shoppers usually don’t have time for products to be restocked. Whether it’s a pre-workout food supplement or beauty product, if it is unavailable in your inventory, they will start looking elsewhere. Sometimes products are unavailable because of an unorganized inventory.
If you are looking for ways to organize your inventory, here are some excellent suggestions. Start by
- Allocating separate areas for receiving goods and pick-ups
- Placing best sellers near the front of the warehouse
- Labeling and addressing products with barcodes and stickers
- Grouping similar categories together for better inventory control
- Maintaining optimal inventory levels by restocking at uniform intervals
5) Invest In Employee Training And Safety
It is always sane advice to take precautionary safety measures rather than getting in trouble and then dealing with the whole scenario after the fact. On average, 23 casualties per year have been recorded as a result of warehouse accidents. That is just a glance over why warehouse staff safety is a big concern.
Some of the common workplace injuries may occur from:
- Heavy equipment accidents
- Trips or falls
- Chemical exposure
- Falling heavy objects and much more
The well-being of the company’s people should be the top priority. It is an investment that should be valued and added to warehousing operations. This, in return protects the efficiency of transportation and distribution networks.
The best approach toward creating and preserving safe customs at the warehouse is employee training. New hires should start with a training program that educates them on adequate warehouse safety measures.
Equipment like forklifts, pallet jacks, hand trucks, service carts, and other machinery add up to the major chunk of optimization. The picking process and logistics management should be reliable for the safety of the manpower that makes the deliveries possible. Serious hazards from a simple malfunction in a forklift or a brake failure of a transport vehicle can put people’s life at stake.
Wearing safety gear and proper kitting should not be compromised. Another way is to mark hazardous areas or zones with safety signs. Some of the ways that can help make your warehouse a safe place for your employees include:
- Carrying out regular fire drills
- Good ventilation in the infrastructure
- Vehicle safety
- Assessing shelving safety
6) Leverage Tech To Support Growth
Modern times call for modern solutions. This principle not only helps sustain the company’s statistics but also supports company growth. Investing in automation technologies that support the growth of the business is fruitful for achieving the goals with lesser effort. Using a warehouse management system helps in accomplishing a successful boom in revenues by offering real-time inventory data, better material handling, and reduced travel times.
Implementing warehouse management tools can help in:
- Reducing labor costs
- Improving inventory accuracy
- Making procedures more scalable
- Lessening the chances of errors in shipping products while upgrading customer service
One example of leveraging tech in warehouse operations comes from the Chinese eCommerce giant Alibaba. In 2018, Cainiao, a Chinese logistic firm (pretty much owned by Alibaba), implemented an automated warehouse. Powered by 700 robots, it aimed to meet the hike in customer needs. This process is a classic example of leveraging technology to ensure time-efficient deliveries.
7) Conduct Regular Audits
Do you need improved efficiency of warehouse operations? One way to improve operations that has an immediate impact is to implement regular audits. When you implement audits as one of the standard operations of your distribution center, you will automatically start noticing smoother running performance.
Warehouse audits are inspections made by staff, internal auditors, or external auditors for determining the performance, efficiency, and safety index of the warehouse. This scrutiny should be done on a regular basis rather than restricting it to a certain time of the year.
Performing inventory warehousing storage audits quarterly or even monthly can be very healthy. This can cater to smaller issues before they turn into bigger monsters. Audit reports help you identify the fundamental problem areas that can be rectified to improve and streamline operations. One quick win is to implement cycle counts of goods as well.
Yes, audits may take up extra time and shoot up the costs, but this investment has great returns. An audit is your sheet anchor against extra expenditures, risks, unused inventory, and billing errors.
8) Elevate Your Employee Experience
Job satisfaction leads to lesser burnouts, inflated motivation, and employee wellness. A satisfied employee has a great work-life balance.
Here are some proven ways to elevate employee experience for your warehouse:
- Providing meaningful work
- Acknowledging feedback
- Creating a flexible work environment
- Offering growth opportunities
- Having supportive management
- Creating a positive environment
- Offering amenities
- Taking care of employee wellness
- Offering bonuses and incentives
- Automating warehouse processes using WFM software
An unhappy employee will be more likely to be less efficient and productive while taking more off days. On the contrary, an elevated employee experience helps in surged engagement and quality productivity. A satisfied employee will certainly be a source of stimulus for others in the same workplace.
9) Invest In High-Quality Equipment
Working in a warehouse can be a complex journey that comprises infrastructure, goods, people, machines and tools, vehicles, and finally – people using these tools.
The right equipment can complement human effort and both can work in perfect harmony for increased productivity.
Here is a list of equipment that will benefit warehouse operations:
- Dock equipment – dock boards, dock bumpers, dock lifts
- Conveyors – conveyor belts, spiral conveyors
- Storage equipment – shelves, racks, carousels
- Lifting equipment – forklifts, hand trucks, service carts
- Packing equipment – industrial scales, packing tables, strapping and stretch wrap machines
Every warehouse should have defined equipment maintenance plans. Regular maintenance should include replacing hydraulic filters, repairing brakes, and replacing tires, among other things.
These machines also have a lifespan, after which they need to be either overhauled or replaced. While machines require service, their downtime should not affect the regular operations.
A piece of high-quality equipment is efficient and can reduce work-related injuries and article destruction. You might have the best manpower at your warehouse but it is the equipment that puts a successful finish to all the human efforts.
10) Improve Return Operations
A customer return operation might not be that simple to tackle as no business would want to credit back a customer who simply wishes to return a product just for the heck of it.
But we will let you in on an important trade secret on how to improve workforce operations – keep customer returns current. This liberates the workload on receivable accounts as the surge in the number of charge-backs is kept under control.
Here are a few things to keep in mind if you want to improve your return processes:
- Upgrade the existing verification process or introduce one if it’s missing
- Have a designated return area with essential equipment
- Use return reports for more accuracy and error-free process
- Do not mistake returns with receiving, keep both accounts separate
- Appoint a designated team for return operations
Final Thoughts on Perfecting Your Warehouse Operations
Remember, the secret sauce for improving warehouse operations may differ for every business. While we agree that warehouse operations have evolved, it doesn’t imply that traditional practices have been foregone. The key factor towards improving your warehouse operations is knowing your clientele’s needs.
An outstanding warehousing company knows all the ins and outs of warehousing operations and how important they are. If you need help upgrading your warehouse operations, we are here to help.
Warehousing and Fulfillment can assist you in finding the right match for all your warehousing needs if you are in search of reputable order fulfillment centers and 3PL companies with robust operations. Get in touch with us now and we’ll save you from certain pitfalls linked to finding reliable fulfillment centers.
This post was written by:
Burkhard Berger is the founder of Novum™. Follow Burkhard on his journey from $0 to $100,000 per month. He’s sharing everything he learned in his income reports on Novum™ so you can pick up on his mistakes and wins.