Believe it or not, your warehouse efficiency has a direct impact on your customer retention. Inefficiency can result in longer waits and inconveniences, which are some of the top contributors to losing customers. Inefficiency can also lead to wasted labor. In fact, US warehouses have an average of 6.9 weeks of wasted motion per year. Think of what you could do with close to seven weeks of labor time back!
During the COVID-19 pandemic, some inefficiency may be unavoidable as you maneuver new realities and a reduced workforce. Budget for fully automating your warehouse to improve efficiency may be nonexistent. But that doesn’t mean there’s not opportunity to improve warehouse operations even now. In addition, anything you can improve now will only serve to further efficiency once you’re able to get up and running at full capacity again.
3 Ways to Improve Your Warehouse Operations
- Identify inventory challenges: Two typical warehouse challenges are under- and overstocks. Among the two, overstocks are more costly. The problem of being understocked can usually be rectified quickly through rush shipments or simple reorders. An overstocked warehouse, however, represents a deeper problem. Typically, a warehouse that’s overstocked is a warehouse that has issues with inventory control. Investing in simplified barcode scanners that can help you take inventory quickly and easily, along with a new barcode scanner software that integrates with your ERP system, may help with overstocked items. Overstocked items mean a gap between known inventory and needs. Accurate inventory counts and easy access to inventory counts through your company’s ERP take the guesswork out of maintaining constant inventory levels and prevent over-ordering.
- Reduce picking mistakes: Have you ever analyzed the cost of misplaced items, mispicks, and returns due to mispicks? The costs can be extraordinary, especially if there are items that are consistently mispicked. Cautioning your team to be more careful doesn’t do much good. You need to get to the root of the mistake. Typically, the answer lies in the way the warehouse is set up. Try shifting the way the warehouse is set up or moving the mispicked items to another area. One warehouse had mispicked items because two items with SKUs only one digit off from each other, and in nearly identical packaging, were placed on the shelf next to each other without a divider. Moving one of the items to a different rack and color-coding the tag on the box helped reduce mispicks down to almost zero. Little things can make a big difference, saving money and frustration from returns by preventing mistakes in the first place.
- Personnel issues: Systems, technology, and people make up the three-part team that builds strong companies. The systems and technology used in your warehouse should free up the people to handle more complex tasks. If they aren’t, and if people feel like they are the servants of technology or slaves to the system, something is wrong. Another issue that can arise with personnel is lack of training. The best systems and technology in the world won’t help you if your staff doesn’t know how to use them. Look at the roles people have on the team, how they are working together, and if they are using the technology you have in place to its fullest capabilities. If not, ask them why not; find out directly from your staff what the roadblocks might be and work with them on a solution.
Find the Gaps With a Warehouse Assessment
If you’re still having trouble identifying areas for improvement, consider conducting a warehouse assessment. Auditing your operations can help you determine where the bottlenecks are and find opportunities to improve your warehouse operations efficiency.
Begin with the data from your warehouse: orders shipped, inventory managed, staffing numbers, returns, backstocks, turnover, and more. From there, visually inspect the warehouse. Note areas where there are bottlenecks. Talk to your team and learn directly from them what might need to be done to address some of the issues you spot. Together, you can create a leaner, more efficient warehouse that offers your company enormous benefits through well-managed inventory.
An ERP software solution can help you review your business and make improvements for efficiency and warehouse operations. Whether you’re looking to add a new ERP or transition to one that’s a better fit for your business needs, the experts at ASI are here to help. With the solutions that will make your organization better, we’ll partner with you to create a tailored solution to drive warehouse efficiency and business success.