Increasing warehouse productivity is a top priority for warehouse managers everywhere. But what’s the most effective method for increasing warehouse productivity? With so many variables in play, such as labor, staffing, workloads, scheduling, and third-party vendors (over which you have less control), it can be difficult to pinpoint the areas you should be focusing on in order to become more efficient.
What’s more, making changes to too many areas at once can lead to confusion and, instead of resulting in increases in productivity, can actually have the opposite effect. While the best strategy for improving warehouse productivity may vary from company to company, we thought we’d shed some light on the issue by asking a panel of warehouse experts and logistics professionals to answer the following question:
“What’s the single most effective way a business can increase warehouse productivity?”
See what our experts had to say below.
Meet Our Panel of Warehousing and Logistics Experts:
Mina Malek is Logistics Manager and Buying Officer for Gym And Fitness, one of Australia’s largest retailer of fitness supplies and equipment.
Mina Joined GAF in 2012, changing the company’s supply chain model to a more effective model to accommodate 400 TEU per Annum. He holds a Bachelor’s degree in Biomedical Science from Griffith University, Australia. His past experiences includes sea imports, customer service and indoor sales at Vanguard logistics services.
“The most effective way a business can improve its warehouse productivity is…”
Investing in an efficient warehouse manager. Investing in an effective warehouse manager who has a great ability to efficiently manage all aspects of the warehouse and the team will result in:
1. Setting up an effective warehouse management system for increased productivity and better real-time inventory control.
2. Always looking at implementing new procedures and looking at new technologies in the market to save both time and effort in daily warehouse operations. These successful practices will improve the overall performance and can lower the overall labor cost.
3. Understanding the type of commodity the business sells (small parcel vs. ugly freight) and optimizing the warehouse storage area accordingly.
4. Maintaining good team morale and prompt, quality order fulfillment, which will back up your sales process, especially if you’re an online business.
William Bauer is the Managing Director at Royce Leather, an American company that creates a collection of contemporary travel, business, and lifestyle accessories integrating the world’s most aspirational quality, ethical construction, and innovative functionality.
“When it comes to improving warehouse productivity, the most important thing for companies to remember is…”
You can’t improve something you haven’t measured.
Ask yourself this (as I ask my warehouse managers at our domestic and international facilities):
Does your operation capture and manage critical KPIs? Do you know your critical productivity and costs on shipped orders, cost per box and cost per line shipped? How can we assess and put in place cost reduction measures if we don’t know the baseline? What do various types of errors cost? What do returns cost?
Once these things are established, THEN create regular feedback to the employees on individual and departmental performance. They’ll respond and give you higher productivity.
Joe Schodowski and the Shelving Inc. team have been racking clients’ worlds since the company was founded in 1959. As president and CEO of the family-owned company, Joe and his team have redesigned thousands of warehouses to maximize space, safety, productivity, and efficiency.
“For companies that want to improve warehouse productivity, I recommend…”
Go up not out. Use the maximum existing vertical space. Fight for your air rights, compress shelf levels, and narrow the aisles in.
Hannah is lead solution consultant at itas (an award-winning Sage partner) and has a real passion for data and process design. With an academic background in Mathematics and Operations Management, she has spent the last 5 years applying that knowledge to the project management, design, and implementation of ERP and BI systems across a range of sectors and with organizations of varying sizes. She gets a real buzz out of seeing her clients grow and flourish as a result of her efforts.
“My number one tip for warehouse productivity is…”
Track and communicate KPIs effectively.
1. Tracking Metrics
You can only improve warehouse productivity if you know:
- What key metrics are you measuring productivity with?
- What is your baseline (i.e. where are you starting from)?
- What is your target? How are you tracking individual performance against those targets?
Key metrics can vary by company, but they should be quickly and easily measurable. 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. For instance, productivity – how do you measure that? Is it made up of several different metrics? Then break those down. You should then start to identify key metrics that you can start driving improvement on.
TIP: Don’t go overboard on the metrics. Having 3-5 clear and easily accessible metrics will drive success better than 10-20 metrics that everyone gives up trying to keep track of.
2. Communicating Metrics Effectively
Most employees are motivated in the here and now. Put up a dashboard displaying how many orders they have picked today, average pick time, orders left to pick, and so forth, on a big screen. This can be done either on a team or an individual level. You can even make it a competition. By giving them real-time, up-to-date information, you will find that you maintain high productivity levels because they can self-monitor their own performance. You could even go a step further with visual displays, such as using green elements if they are hitting targets and red if they are behind. For an example of these, please see our pages on Business Intelligence Dashboards. Please note that these work with a variety of ERP/WMS systems.
Logistics veteran and Overseas Cargo, Inc. (ShipOCI) Founder & President, Ron Atapattu brings to the table over 30 years of experience handling supply chain management, distribution, transportation, inventory management, and warehousing for some of the world’s most recognizable brands, including General Mills and PepsiCO.
“The single most effective way a business can increase warehouse productivity is…”
Constantly reviewing the velocity of your SKUs to optimize slotting.
Jamie Saltos is marketing director for Kapco Global, an aerospace parts distribution and supply chain management company headquartered in Brea, California with strategic locations throughout the U.S., Europe and Asia.
“The best way to increase warehouse productivity is…”
By implementing custom kitting strategies. Grouping and bagging components that are often used together into custom kits can help reduce inventory handling time and make better use of warehouse storage space. For businesses that regularly perform the same types of repairs and procedures, custom kitting can help to cut down on time-consuming errors and make the inventory management process more fluid under stringent deadlines.
Mark Lefcowitz is a Process / Work Systems Engineer, Project Manager and Senior Data / Business Analyst at MCL & Associates, Inc.
“By far the most efficient and effective way to increase warehouse productivity is…”
To adopt and maintain a Just-In-Time and Lean culture within their organization, from top to bottom. Emphasis should be on the incremental adoption of the time-tested tools developed by Toyota and Motorola that are commonly referred to as Lean Six Sigma.
Joseph Flahiff helps organizations become nimble through strategic leadership and culture design. He is the author of “Being Agile in a Waterfall World: A practical guide for complex organizations” and has over 15 years of experience executing, coaching, consulting, and training in traditional and agile delivery across large-scale, complex enterprise IT organizations as well as smaller firms.
“The best thing you can do to improve warehouse productivity is to…”
Ask the people who work in the warehouse to start thinking about it, and on a regular, periodic basis, review and discuss how they might work better. I encourage people to put a meeting on a calendar, once a month, at least to come together for an hour or 90 minutes (typically takes a good 90 minutes) to discuss ideas for improvement.
The reason you want to ask the people working in the warehouse is because they are the experts in their work, more so than anyone else. But even more important is that any idea has to be implemented. Staff, generally, have already bought into their own ideas, and they’re more likely to be excited about ideas that they’ve come up with. It will not only improve the warehouse flow and productivity, but it will improve their overall motivation and engagement. Lack of engagement is the #1 reason people quit their jobs. So get them engaged by asking them how to improve. It is a double win.
Nancy is Co-Founder of 3PL Central and serves as its President and Chief Financial Officer. Nancy oversees day-to-day operations at the company, relying on her background in accounting, law, and banking to deliver insights into business and process improvements.
“The single most effective way to increase warehouse productivity is…”
The short answer is simple: by implementing a Warehouse Management System (WMS) that’s been designed for their unique needs.
As opposed to, say, an isolated workflow improvement, warehouse re-configuration or pick/pack technology, a well-designed WMS can help optimize your entire fulfillment chain, enabling you to save enormous amounts of time, effort, and labor costs. Providing real-time visibility into your operations 24-7, a WMS centralizes the data you need to monitor and improve performance. It is without a doubt the single most effective means of increasing your overall productivity, reducing your costs, and increasing your profitability.
Richard Cushing is a Certified Demand Driven Planner (CDDP) as recognized by the International Supply Chain Educational Alliance (ISCEA), and serves as a senior solution architect at RKL eSolutions, LLC. He has worked as result-oriented consultant, helping businesses make more money, for more than 25 years. He and his wife have nine children, and he lives in Minneapolis, MN. On Twitter @RDCushing has nearly 46,000 followers and tweets about small business and supply chain matters.
“My advice for companies seeking to improve productivity in warehouse operations is…”
If we understand that the goal of a warehouse (in a for-profit organization) is to make money for the company, then two – and only two – system metrics are significant in measuring the warehouse’s contribution: 1) return on investment (ROI), and 2) due-date performance. Therefore, every measure of efficiency must be considered in these terms: does a specific action increase ROI without sacrificing due-date performance; or does a specific action improve due-date performance without sacrificing ROI?
Accomplishing improvement in these two related measures depends upon the FLOW of relevant information and materials.
The ‘flow of relevant information’ means that the metrics used must be specific. It is insufficient to measure a warehouse’s efficiency based on gross metrics like average stock holding (dollars) or average turnover ratios. Organizations must be able to identify the specific ROI of specific stock holding quantities of individual SKUs in specific locations. To do this, they must have a clear strategy and plainly articulated tactics that help them define the quantities to be held-and why.
Furthermore, efficiency is enhanced by having stock-holding quantities that are being dynamically adjusted based on the day-to-day flow of relevant information-like shelf take-away (actual demand) at the point of consumption and exception reporting whenever inventory buffers are too large (reducing ROI) or too small (and jeopardizing FLOW-also reducing both ROI and due-date performance).
Real efficiency is not measured in terms of cost-savings. Rather, real efficiency in warehouse operations is best measured in terms of FLOW: having the right products, at the right place, at the right time, and in the right quantities. Having too much inventory while, at the same time, falling down on due-date performance is a sign of huge inefficiencies, regardless of how your cost of operations compare to last year’s numbers.
As President of North America, Planon’s CFO, Fred Guelen, is based out of Boston and leads the American and Canadian operations as well as continuing his role as corporate CFO. Planon is the leading global provider of software that supports organizations that aim to optimize workplaces, services and assets. Planon delivers innovative software, proven best practices and professional services that increase workplace productivity and cost efficiency. Planon’s software has been completely designed in-house and is fully integrated to deliver reliable management information. Gartner has consistently rated Planon as a global leader in their Magic Quadrant for Integrated Workplace Management Systems (IWMS). Planon has implemented its comprehensive solutions for over 2,000 clients, supported by offices around the world.
“The single most effective strategy for boosting warehouse productivity is to…”
Keep the facility running, no matter what. Warehouses (and businesses in general) are on the cusp of a major transformation. Over the next decade, new ‘smart’ technology assets will enter offices, facilities, factories, and even homes, in numbers we couldn’t imagine 5 years ago. We’re also seeing the rapid convergence of nanotechnology, biotechnology, materials technology, information, and communication technology. If this wasn’t enough, there’s also the acceleration of technological developments and growing information exchange between developed and developing countries and the interaction that must take place between multiple systems.
And it doesn’t end there.
New materials, new technologies, the increased use of autonomous robotics, the creation of the Internet of Things – where physical objects and humans are connected and communicate virtually – are all driving rapid and irreversible change. As these machines replace humans in some tasks and augment them in others, their largest impact may be less obvious. Namely – what happens if they should fail?
As warehouses and businesses become more reliant on these emerging (and increasingly vital) technical advances, ensuring business continuity is becoming a critical responsibility – and it’s falling on the facility manager’s shoulders. Next-generation facility management software ensures they can confidently deliver a safe, secure, stable, always-on work environment both now and in the future:
- Automated alerts help employees react fast in the event of a potential issue.
- In-built analysis tools help pinpoint potential points of weakness so they can be addressed long before they cause a problem.
- It allows Facility Managers to establish maintenance regimes ensuring just-in-time and fit-for purpose maintenance across any type of workplace, asset or installation.
- And because next-generation FM software can be integrated with any building, security or access management system, they get full control over the major factors which can negatively affect business flow and continuity.
All over the world, forward-thinking shipping/warehouse/transportation facility management professionals have turned to next-generation FM software to efficiently manage their warehouse operations. It’s being used to streamline business processes, reduce facility costs, and simplify space and maintenance management. Simply put, it has revolutionized overall workplace performance and helped companies reach their financial and production goals.
Jason Sentell is a Product Marketing Manager at Wasp, responsible for development and execution of Inventory Control and Point-of-Sale (POS) solutions.
“By far, the single most effective way for a business of any size to increase their warehouse productivity is…”
By using an automated inventory management system. Shockingly, inventory inefficiency is common for many businesses. According to an analysis in Management Science, numbers were inaccurate for 65 percent of the nearly 370,000 inventory records observed across 37 retail stores.
Incorporating one of these systems into your business not only ensures that you have more accurate inventory levels (than keeping track of inventory on paper or in Excel), but these types of systems can also increase your profitability (often between 20 and 50%).
Additionally, these types of systems can help optimize warehouse productivity by:
- Saving space- Clearly defined storage areas and bin locations lead to a more organized and efficient warehouse.
- Maximizing labor in the warehouse. Knowing exactly how much of everything you have and exactly where it is limits both training time and the time required for item retrieval, meaning you can pick more orders with fewer employees.
- Reducing wear and tear on fixed assets (like pallet jacks), which are more efficiently utilized when routing and activity are optimized through one of these systems.
Jonathan Gibaud is an Entrepreneur, Strategist and Creative. In 2009 he founded the UK’s largest Emergency Food Storage company and spent five years travelling the world, living in eight different countries. He currently advisors companies including the UN, NHS and Unilever as an innovation and performance strategist consultant.
“The most effective way to increase warehouse productivity is…”
In our warehouses we have one rule: keep your shoes/boots polished. Mindful respect in maintaining a well kept pair of shoes transforms how warehouse workers respect themselves, their environment, and their work.
Jennifer Martin is a Business Coach and a Work/Life Balance Expert who helps Small Business Owners, Leaders, and Managers Worldwide understand how to build a thriving business without loosing their lives in the process.
“If you want to get the most from your Warehouse you need to make sure you…”
Have systems in place that are designed to help you achieve that goal. Top of that list is making sure that your top selling (or fastest moving) products are the easiest to get to.
Lior Krolewicz is the founder of Yael Consulting, an online marketing consulting company with expertise with Google Adwords (paid search), SEO (organic), and analytics, and a distinct focus on increasing profits.
“When you want to increase warehouse productivity, the most important thing to do is…”
Reexamine vendor lead time. When working as an inventory manager at a very large retail company (market capitalization of $1 Billion), I realized that vendor’s delivery dates did not correlate well with the system lead time they committed to. At this point, I mined the database for all vendors’ historical delivery time and created a score card for each vendor. In many instances we found vendors that the system said had a lead time of 30 days but were delivering on an average of 15 days. In this case, we presented the information to the vendor and got them to commit to a 16 day lead time. In other cases, we found vendors who were constantly late, which clearly results in issues like out-of-stock items. Now we had performance data to present to the vendor and had a talk with them to deliver on promises, and what got measured, naturally, got improved. All this realignment results in lower inventory holding cost, faster turnover, lower out of stock levels, and many other benefits. Since it’s so easy to implement – since most companies are sitting on this data – that it is the single most effective way a business can increase warehouse productivity.
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