When things are running smoothly, very little thought goes into warehouse processes and functions. When there’s friction, it forces you to reevaluate what’s happening from the ground up. Sometimes this is a good thing, as it can focus your priorities and help you zero in on some of the things that really matter — like productivity and efficiency.
Why Warehouse Efficiency Matters
No business owner or manager in their right mind is going to argue against the fact that warehouse efficiency is important, but few take the time to truly understand why productivity at this stage of the supply chain matters.
A productive warehouse is a lot like an efficient AC system in a home. When the system is functioning properly, and cold air is blowing in the dead of summer, you’re comfortable and, therefore, don’t really focus on the marvelous technology that’s compressing, cooling, and forcing air into your home through a complex maze of vents, ducts, and machinery. When cold air stops coming out and cooling the home, you immediately notice just how important and sophisticated all of that technology really is. You also realize how much you took it for granted.
When your warehouse is clicking on all cylinders, you don’t expend much energy thinking about how well it works and all of the different moving parts that are functioning in unison to achieve specific output goals. But when these goals aren’t reached, the significance of a productive warehouse quickly becomes evident.
Immediately, warehouse inefficiencies reveal themselves in the form of bottlenecks. Depending on which stage of the supply chain you use, as well as what industry your company operates in, this could lead to a lack of product, the inability to supply correct parts, excess buildup of materials, and/or issues with labor and staffing.
A warehouse that’s failing to live up to its potential can be costly. There may be increased overtime costs for employees, frequent breakdowns and repairs of machinery, slower delivery times, and any number of other issues.
Eventually, all of these internal problems work their way up the supply chain and begin to affect client-facing areas of the business. When products are delivered late or don’t meet expectations of consistency and quality, customer experience dwindles. And it’s at this point that warehouse inefficiencies become very costly. Once customers sense that something isn’t right, you’re on the brink of disaster.
But much like a broken AC system, an inefficient warehouse can be fixed. The first step is noticing that something is wrong. The second step is swiftly moving in and taking action to rectify the underlying causes (rather than masking the symptoms). This is how you regain control.
6 Tips for Greater Warehouse Output
No two businesses are the same. Even two competitors in the same industry have their own methods of doing things. That being said, the principles remain the same. To have a productive and efficient warehouse, you have to get the basics right.
Here are a few tips to keep you on track:
1. Ensure Proper Location
The best warehouses are convenient. “These warehouses are built at certain locations to ensure that products are stored effectively in the intended environment, at a closer reach to consumers, transported with the lowest rate available, and to adhere to government and state policies,” Mach 1 Global explains. “Local conditions also effect locations of warehouses, including the cost of labor, land and buildings, IT infrastructure, transportation infrastructure, and taxes.”
You might not have the resources or capabilities to build your own warehouse wherever you want, but there are ways to make sure you’re leasing or purchasing in an advantageous area that eases your supply chain.
2. Use the Right Equipment
It’s also important to use the right equipment within your warehouse. While it may cost more on the front end to get everything just right, it’s a lot easier to operate at maximum efficiency when you’re not trying to fit a square peg into a round hole.
“For many of our clients, the right loading dock equipment can actually make or break their efficiency in the warehouse,” explains Justin White of Mid-Atlantic Door Group, Inc., a company that specializes in commercial garage door installation and repair. “From dock levelers and scissor lifts to vehicle restraints and dock seals, success is found in the details. Any hold ups here can impact efficiency further down the supply chain.”
3. Prioritize Organization and Systems
Smooth, efficient warehouse production is all about consistency and repeatability. The more you can boil a process down into a series of easy-to-follow steps, the more likely that you’ll achieve predictable output.
Systematic organization is also crucial. The warehouse should be laid out in a manner that makes sense. The most commonly performed processes should also be the most convenient. Not only does this increase speed and reliability, but it also reduces employee frustrations and unnecessary points of friction.
4. Invest in Quality People
Assuming you do everything necessary from a strategic perspective to establish the right processes and supply the best equipment, warehouse efficiency comes down to the people who are performing each of the big and small steps along the way.
Invest in quality people, and they’ll make even the worst systems work better. Invest in low-quality talent, and they’ll make even the best systems fail. You get what you put in, and you absolutely must have quality people working in the warehouse.
A quality warehouse employee isn’t just someone who knows what they’re doing from a technical perspective. You also want people with high integrity, motivation, and aspirations. These are the people who make your business better.
5. Emphasize Training
Hiring quality people is just the start. To keep them on track and help them grow, you need to emphasize training. Training sessions should regularly be conducted in short increments of 45 to 60 minutes. They should be hosted by direct supervisors whenever possible and take on more of a conversational tone than one of lecturing.
“Ask for employee feedback. Those who are doing the job on a day-to-day basis often have great insights into barriers within the process and how to overcome them,” advises Tom Stretar, a senior director for enVista. “Maybe one person is already using a tactic to be more resourceful that can be shared with the team at large and implemented across a company.”
When training is viewed as a practical method for getting better, rather than a box that HR needs to check off, employees are much more likely to be engaged. Make it interesting!
6. Track and Analyze Metrics
You can only maximize productivity if you know what’s happening on the ground floor. So what methods do you use to determine efficiency and output? You need to be tracking and analyzing metrics.
“Key metrics can vary by company, but they should be quickly and easily measurable,” says Hannah Lincoln, lead solution consultant at Itas. “For example, if you spend a week trying to get the data on those metrics out, then that isn’t really useful. You either need to look at your systems or track different metrics. You may want to break your metrics down.”
Lincoln uses the example of productivity. It’s not enough to say you’re tracking productivity. You need to split this up into two or three tangible metrics that can be measured and analyzed to show you how things are going.
Evaluate Where Things Stand
If you’re reading this and aren’t quite sure where your warehouse stands regarding productivity and efficiency, now may be a good time to sit down with your team and do a careful evaluation of how you’re doing in these key areas. By being proactive, you can get ahead of these issues and avoid many of the supply chain issues that frequently plague struggling organizations.
Photo via Shutterstock
If you want to learn some new ideas/tricks, read about Walmart and Amazon warehouses. Those are the current gold standards (especially Amazon).
Efficiency is all that matters in a warehouse. You’ll want to be able to get the item you need in time when you need it.
I think efficiency can best be described by the Lean Six Sigma model of Toyota. I think it can inspire warehouses.
For me, warehouse efficiency is about getting what you need right when you need it.
I recently started operating my warehouse, and I noticed that it lacks shipping boxes. I agree with you that it would be best to invest in the right equipment so the warehouse would be able to operate at maximum efficiency. I’d also keep in mind, to have a systemic organization so it will be more convent for the employees.
I do agree that warehouse efficiency matters a lot. It will help you to get the item when you need it. Thanks for sharing this article with us! It truly helps us to understand this in a better way. Keep sharing more!