While some industries have slumped in the past year, many warehouses face rising demand. E-commerce has skyrocketed and will likely keep growing, placing more pressure on the supply chains it relies on. This makes warehouse optimization more crucial than ever.
In 2020, e-commerce sales soared 44% over 2019 levels, while total retail grew just 6.9%. Much of this growth is due to COVID-19 limiting in-person shopping, but this trend won’t end when the pandemic does. Online retail has been steadily growing for years, so warehouses were going to face this demand eventually.
Warehouse optimization can seem like an intimidating task, but it doesn’t have to take much time or money. Here are five ways you can optimize your operation with minimal disruption.
1. Revisit your picking system
Picking accounts for as much as 70% of operating time in a warehouse and 55% of costs. If you have the budget, this is an ideal area to apply automation, as robots tend to perform repetitive tasks far faster than people. If not, there are plenty of more affordable and less disruptive ways to optimize picking, too.
Color-coded LED lights can improve organization and visibility, guiding workers to the right area when picking. Similarly, RFID tags can help people locate items without having to search around the warehouse for them. Readers can pick up RFID signals from 40 feet away, helping employees find the right things without even having a line of sight.
2. Arrange inventory according to demand
Reorganizing where you store items doesn’t take long but can have a significant impact on productivity. Place high-volume, in-demand items where it won’t take workers as long to reach them. Similarly, be sure not to overstock low-demand items, creating more space for things your workers need to get more frequently.
Organizing the facility to stock from the back and pick from the front prevents collisions between vehicles and workers, improving safety and productivity. Every injury or accident represents lost time, so avoiding these incidents helps workers stay productive for longer. This structure further enhances productivity by giving both loaders and pickers more room to work.
3. Embrace demand forecasting tools
Warehouse optimization today is inseparable from technology like machine learning (ML). One of the best ways you can use ML is to predict incoming demand changes through predictive analytics. With this information, you can reorganize your stock as necessary to favor whichever products will be most in-demand in the future.
Keep in mind that success with predictive analytics requires you to start small in most cases. Similarly, it may take time to collect enough data to be accurate. If you’re going to capitalize on predictive analytics models, you’ll want to start soon and apply them to just a few areas at first.
4. Eliminate unneeded stock and processes
Most warehouses store items they don’t need anymore or take unnecessary steps in their workflows. Audits will uncover these redundancies so you can remove them. Eliminating unneeded stock and processes will help you optimize your space and become more efficient.
Maximizing your space can have a more considerable impact than it seems at first glance. Merchandise Warehouse saw a 44% efficiency increase after adding 14,000 pallet positions by switching to a new racking system. When you clear space and streamline processes, you’ll have the space and time to expand in areas where you’re falling behind.
5. Simplify
Perhaps the most straightforward and most often overlooked part of warehouse optimization is simplification. No matter what other improvements you’ve added, if your layout and workflows aren’t easy to understand, workers won’t be as productive as possible. Human error is one of the leading causes of accidents, and you’ll see more of these if operations are complicated or confusing.
Complexity can seem like an advancement, but it often hinders your workers. If things are too complicated, it will take time for employees to think of and do the right thing, and it makes mistakes easier. Stripping everything down to be as straightforward as possible lets people work far faster, and recruits can get acclimated sooner.
Optimizing your warehouse doesn’t have to take long
When people throw around words like “disruption,” it can make it seem like optimization is a long, complicated process. Things like warehouse automation and optimization seem intimidating, but there are simple ways to go about it.
These five solutions will help you improve your operations at minimal cost and time. You can become more productive and less wasteful quickly, preparing for rising demand on the horizon.
About the Author:
Emily Newton is the Editor-in-Chief of Revolutionized, an online magazine showing how technology is innovating different industries.
