How do I improve the productivity in my warehouse?

This is a lightning overview of how to get some rapid productivity gains in your warehouse.

First off you should really assess the match between business strategy and the warehouse operations. No business is static, and now more than ever fundamental changes in markets and customer behaviour can creep up on a business and require a revised approach to your stock management and order fulfillment strategies.  If your customers are now ordering more frequently in smaller order sizes or your direct to customer online business has taken off then your costs per sales dollar may have sky-rocketed and your warehouse may need a rethink.


If your warehousing activities are a good fit for your business; move on to a review of the business profile (business size and type, SKU profile, profile of orders in/out, Pareto analysis of sales, slow moving stock analysis etc). Clear out the junk you have been storing for years and slot the products in your warehouse properly so that the fastest moving products are the quickest to pick. Take advantage of more productive picking methods such as multi-order picking if you have many small orders. Then review the warehouse processes with a Lean approach to eliminate wasteful activities.  

Next review the use of existing systems to make sure you are getting the best out of what you have.  Many warehouse systems are implemented by IT people not logistics people and go in fast and vanilla. Many dollars of productivity maybe left unused in the code you have already paid for.  Even in simple order management systems there are usually ways to optimise the system with a few reports to better use the information you already have

Next review your racking & shelving and materials handling equipment.  Ancillary areas such as packing benches, printers and workstation design and admin areas should not be neglected.  Warehouse efficiency comes from the  supporting functions as much as it does from materials handling.  Small investments here can make useful productivity gains.

So far none of the above will cost you all that much money but it will take some time.  Doing it while carrying on normal business can be a pain, but will pay dividends in the long run.

If you are still looking for more and have the money to invest and the volume to justify it, you can look at investing in warehouse technologies including physical systems such as carton flow and pallet flow racking, anything that promotes picking speed and/or storage density.  Next will be warehouse management systems and real time transaction technologies such as mobile wireless terminals with barcode scanners, pick to light, pick to voice, conveyors or AGVs and other automated handling systems.  The more you spend the lower your unit transaction cost will be if your volume justifies it.

Finally all of the above should be supported by the active involvement of your staff in continuous process improvement.  Implementing Lean programs throughout your business will pay major dividends in getting the payback on your hardware investments.  There is much gold to be mined in most businesses by integrating Lean into the administrative areas of your business to make the whole value chain of your business is more efficient and focussed on delivering results to the customer and generating profit for the business.

You obviously cannot do all of this all at once so you need to identify the greatest area of need that is holding your business back and target that area.  I hope this gives you some food for thought to kick off the year and pick a project to improve your business this year.

If warehousing, logistics and supply chain are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of business and career boosting ideas I suggest you join The Warehouse Performance Initiative.