The 6 Most Costly Warehousing Mistakes (and How to Avoid Them)

Posted by Chris Scullin

Warehouse Market Leader

in Warehouse

Updated April 17th, 2024

Table of Contents

• 1. A Poor Warehouse Layout
• 2. Inaccurate Forecasts
• 3. Manual Tracking
• 4. Picking Inefficiencies
• 5. Managing All Inventory Equally
• 6. Short Term Planning

Warehouses remain a crucial component of global supply chain networks as consumers expect faster deliveries. Setting up a warehouse requires careful planning, and several unique systems must be integrated with equipment and software. In addition, the high priority placed on rapid turnover and accurate, rapid order fulfillment requires management to remove any bottlenecks that may cause delays.

In this post, we’ll explore six costly warehouse mistakes and how you can avoid them. These common errors can be easy to overlook during the planning stages of a warehouse project. But, as we’ll discuss, many of these issues can lead to disruptions on the warehouse floor and require costly solutions to correct them. Understanding these mistakes can help you avoid similar difficulties during your warehouse setup and improvement projects.

1. A Poor Warehouse Layout

The layout of a warehouse sets the entire framework for how work will be performed throughout the facility. Creating an optimized design from the start is critical as it can be difficult to make changes after racks, shelving, and equipment have been installed. In addition to choosing an efficient layout, it’s also important to avoid common mistakes that can cause problems later. Some of the most common warehouse layout mistakes include:

• Having overlapping shipping and receiving areas
• Not creating spaces for product returns and overstock
• Designing pathways and work areas that are too small
• Failing to maintain clean and tidy warehouse workspaces

An organized warehouse should have clearly marked and dedicated zones for various types of work and identified travel paths for people, forklifts, and other mobile equipment. Custom warehouse signs such as warehouse aisle signs, indoor door and dock signs, outdoor door and dock signs, and warehouse safety signs provide directional cues and help workers identify the various areas of the warehouse for easy navigation. Warehouse signage solutions convey crucial information to help keep traffic flowing smoothly. Not only does an optimal traffic flow improve productivity, but it also enhances warehouse safety.

2. Inaccurate Forecasts

Even the most efficient warehouse will not be able to manage inventory without accurate forecasts. This includes planning for local inventory, supplies, and order fulfillment. Having accurate forecasts gives management the ability to set optimal inventory stocking levels and direct warehouse resources to coordinate work orders. This information is also helpful when performing inventory counts and can help streamline fulfillment and other essential warehouse functions.

3. Manual Tracking

Warehouse automation technology has truly become mainstream and is an excellent resource for improving site workflows. The use of procedures that require excess paperwork and manual data entry can add significant time and require more effort. One of the most critical steps to eliminating manual work is investing in warehouse management software (WMS) that can be used to centralize all critical warehouse workflows.

These platforms can also be integrated with barcodes and scanners to automate several warehouse functions such as picking, packing, and shipping. A fully integrated WMS is the backbone of a well-functioning warehouse and can be continuously improved with future integrations and add-ons.

4. Picking Inefficiencies

The picking process is a critical area of focus for management and staff that are tasked with order fulfillment within a warehouse. Many modern warehouses include conveyor belts, packers, and other equipment to help move inventory, which can make picking more efficient but can also create bottlenecks if these tools aren’t carefully integrated into warehouse workflows. Optimized picking requires carefully laid out travel paths and a layout that prioritizes inventory flow. It’s also recommended to have clear signage and rack labels throughout the warehouse for easy identification of inventory.

With a variety of labels and signs available for your warehouse barcoding needs, such as warehouse rack labels, warehouse floor labels, hanging warehouse signs, cold storage warehouse rack labels and cold storage warehouse rack placards, pallet barcode labels and tags, and barcode labels for returnable containers, trays, and totes, you can easily label every area of the warehouse to ensure seamless scanning and tracking and eliminate manual data entry for improved accuracy.

5. Managing All Inventory Equally

Another common warehouse mistake is treating all inventory as equal. Each piece of inventory may have different storage, demand, and handling requirements. High turnover inventory should be placed in storage and forward-picking locations within the warehouse that make it easy for pickers and forklifts to access them.

It’s also recommended to store inventory with lower demand away from high-traffic areas to maximize efficiency. Seasonal and perishable inventory should be carefully considered, and it may be beneficial to have a rotating inventory placement plan that takes advantage of seasonal trends throughout the year. It’s also important to not overload inventory to the point that it hinders efficiency. Not only can too much inventory make space utilization a significant challenge, but it also adds to your overhead costs – especially if you end up holding overstock for a long time.

6. Short Term Planning

Failing to prepare for the future is a major risk for any business. It’s impossible to account for every industry or customer trend, but adopting a long-term planning focus can help a great deal. Future growth may require a significant investment in new equipment, systems, and automation technology. Creating a formal plan gives you a focal point and a baseline that can be reviewed periodically and updated to reflect the latest information available. These review periods also serve as an excellent time to collect feedback from employees about what is working well and where improvements may be needed.

Modern warehouses have proven that an efficient layout, proper planning, and following industry best practices can be combined to create a high-quality fulfillment center. Warehouse management and other staff should be mindful of common mistakes that can often be overcome with careful planning during the early stages of a warehouse setup or remodel. Avoiding these mistakes gives your entire team more energy to spend on value-added work and creating an efficient operation.