In today’s fast-paced business environment, efficiency is key to success.
Whether you have a small business or are running a huge operation, you must look for ways to improve your efficiency. And all while keeping production high and costs down.
Your warehouse or storage space needs to operate under maximum efficiency as well. Organizing, streamlining, and outsourcing your storage and distribution will give you more time to focus on marketing and sales.
Let’s look at three ways to improve warehouse efficiency: storage, outsourcing (or 3rd party logistics), and workforce management.
1. Optimizing Warehouse Storage
The footprint of your warehouse should promote efficiency, rather than hinder it. Instead of building more storage space, consider these suggestions for making the most out of your current warehouse:
- Use more verticle space via taller warehouse storage racks
- Use one type of storage bin for like products
- Look for unused space, such as on top of shipping/receiving doors, adding shelves for slow-moving product or supplies
- Use “cross-docking” for a fast-moving product, avoiding storage all together
- Implement “directed put-away” so the incoming product has a designated storage place
You want to use no more than 85 percent of your warehouse for storage. Going over this limit will reduce efficiency, as it will be too difficult to maneuver.
If your business is thriving, and orders increasing, you know that it’s impossible to handle everything alone. Outsourcing, or paying another entity to do certain tasks for you, becomes crucial at this juncture.
Enter third-party logistics, also known as 3pl companies.
3pl companies can take on any or almost all your order fulfillment, from receiving to returns, and everything between. A 3pl can help you manage your inventory so you know how to order and how much to order. They can warehouse your product, so you don’t have to build more storage space. A good 3 pl partner can also help you put two-day or even same-day shipping into place, which will keep you competitive.
3pl partners will cost money, but you will save a lot in internal costs. Plus, you as the client will have more ability to focus on your product line, and marketing that line, so the 3pl is worth your serious consideration.
3. Managing Your Workforce
While you can read entire books on this topic alone, here are some ideas for improving workforce efficiency:
- Create a working environment that promotes productivity through contests, incentives, and employee input
- Cultivate better front-line managers through cross-training
- Make worker safety a high priority
- Focus on worker retention as it is cheaper than retraining new hires
- Keep work stations organized to reduce clutter, chaos, and costly mistakes
- Review procedures often to minimize the number of steps and touch on each order
- Have key performance indicators in place before discussing change or giving feedback to employees
Your warehouse is a physical space, an operation, and a human endeavor. Efficiency improves when you care for all three.
Commit to Warehouse Efficiency
Warehouse efficiency is not only about speed but includes methodical and streamlined procedures, productive and valued employees, and collaborative relationships with invested partners. Commit to this type of efficiency in your warehousing, and watch profits grow.
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