Improving warehouse efficiency requires continuous focus and measurement to ensure that each change in systems and processes creates a desirable effect. At the outset, it is difficult to know which factors will have the largest impact on your overall warehouse efficiency. Studies show that there are three major factors that can clearly help improve your efficiency with time.
Order Composition
It is impossible for you to control what your customers order and when. However, it is possible to fulfill their orders in a more efficient way. You should be tracking two metrics concerning order composition in your warehouse: cost per line item and time per line item. These two metrics demonstrate how much it is costing you on average to get a single product out the door. As order size increases, the cost and time per item decrease because your picking team is able to spend more time on the floor and less time in dispatching. By allowing your pickers to work on multiple small orders at one time via batching, you can receive the same benefits. The more work they can do in between check ins, the more efficient they will be.
Warehouse Layout
Warehouse layout and space utilization are another key factor in determining warehouse efficiency. If parts of your warehouse are congested or difficult to work in, things will slow down. With the use of modern Warehouse Management Systems, you can simulate the effect on your activity that releasing a group of orders will have before you actually do so. Also, your team will be routed along the most effective paths. The WMS will take into account your layout as well as any equipment like VLMs or carousels to dispatch orders effectively. It will also help identify products that move quickly and should be stored in locations that are easily accessible to make the most of your available storage space.
Methodology
As mentioned above, combining multiple small orders into one single event to dispatch improves the data for each line item in those orders. However, a proper WMS will help improve processes throughout your warehouse. From receiving product to putting it away in its proper location, the WMS will help make incremental improvements that build up over time. It is often the smallest steps that cost you the most time because you don't realize how much of the day they actually take up. By maximizing efficiency and eliminating waste in your warehousing methods, you will see a big picture improvement.
These three factors are often underestimated when it comes to their effect on warehouse efficiency. Fortunately, implementing a Warehouse Management System and measuring efficiency in each of these areas can highlight room for improvement and identify weaknesses in your process. From the layout of your warehouse to the way you dispatch orders, each step saved is money in your pocket.
