How to Improve Warehouse Efficiency in 6 Steps

The costs of poor warehouse efficiency are wasted time, resources, and money. Below, discover some of the challenges distributors face in the warehouse, as well as top warehouse improvement techniques you can start employing today.

The Symptoms of Poor Warehouse Efficiency

As a distributor, you’re likely already aware of the gaps in your warehouse efficiency. It’s also possible that your organization has been using the same management-intense legacy software since the turn of the century, and “how things have always been” is standing in the way of making much-needed upgrades that could drive greater productivity and real bottom-line improvements.

This, at a time when warehouse efficiency is more critical than ever.

If you’re encountering these challenges, it’s time to take action.

  • Redundancies. This may include repetitive data entry, entering or tracking the wrong information, and excessive handling of products. Ultimately, redundant processes waste time and resources that could be better utilized elsewhere.
  • Disorganization. Poor warehouse organization can lead to product damage, lost stock, safety issues, and more.
  • Stockouts or overstocked. Every warehouse wants to increase turns and reduce carrying costs. This is why it’s crucial to balance your inventory with your needs depending on seasonality. Having too much of one product, the wrong products altogether or the absence of the products your customers actually want is problematic. Keep in mind that backlogs harm productivity.
  • Not enough space. It may not be feasible to add a few dozen more square feet to your warehouse or move to a larger facility. Fortunately, you can make the most out of the space you do have by building a more efficient workflow.

If you’ve noticed these challenges in your organization, keep reading to learn six warehouse improvement ideas for distributors.

How to Improve Warehouse Efficiency in 6 Steps

  1. Optimize the layout of your warehouse

What is the correct product flow in a warehouse? Ultimately, this depends on the products you sell, the frequency of turns, the size of your facility and other factors, but the benefits of taking the time to figure out the best layout for your business should not be underestimated.

Optimizing product placement eliminates bottlenecks and misplaced inventory, and mitigates hazardous storage practices. It can also significantly reduce picking time.

Sales volume should play a key role in any layout decisions. Identify your quickest-selling products and place them closest to the receiving and shipping docks to minimize storage and picking times.

The Microsoft Dynamics 365 Supply Chain Management warehouse management module makes it easy to organize your warehousing data through real-time visibility of inventory, full control of location stocking limits and volumetrics, and workflow support. Build and consolidate inbound and outbound loads to optimize truck space and loading docks with the solution’s load-planning capabilities and appointment scheduling.

  1. Revamp your picking and packing processes

This suggestion goes hand in hand with the previous, as a cluttered and chaotic warehouse swells picking and packing times. The more time your crew spends walking your warehouse to find specific SKUs, the higher the costs of labor and the lower your overall productivity.

To improve picking accuracy and efficiency, Microsoft Dynamics 365 Supply Chain Management warehouse management module includes a built-in mobile app that assists employees through voice picking and a high-contrast interface. It also supports multiple picking strategies.

  1. Implement automation

Automation can minimize labor shortages, reduce training time, boost efficiency, and increase revenue, to name a few.

Examples of warehouse automation include:

  • Automated storage and tracking
  • Conveyors
  • Guided vehicles
  • Integrated robotics
  • Microsoft HoloLens

Automation is the backbone of Sikich’s digital solutions, and the company’s HEADSTART approach allows distributors to automate paper-based processes using streamlined technology and state-of-the-art supply chain management workflows.

  1. Improve communication with suppliers

A disorganized warehouse is an inefficient warehouse. To introduce more productivity into your facility, ensure your team maintains excellent communication with suppliers.

When your team knows exactly how many products will arrive at the warehouse and when, as well as about any potential delays, they can designate the proper time and personnel to efficiently receive, store, and eventually sell those goods. Or, you can change tack if needed to an alternate product to fill an order.

  1. Embrace data

A smart distributor realizes the power of data. But all-too-common issues can impede the effectiveness of collecting and utilizing warehouse metrics.

Ineffective ways of collecting and analyzing data include:

  • Implementing poor data security
  • Maintaining siloed data sources
  • Using technologies that employees don’t understand
  • Utilizing spreadsheets to track data

Dynamics 365 Supply Chain Management consolidates your warehouse data in its warehouse management module, featuring inventory visibility, carrier data, and material handling event information. Dynamics 365 Supply Chain Management also ensures the right products are in the right place at the right time with a single view of inventory across channels, and the ability to allocate inventory for specific customers.

Leverage Microsoft Power BI to gain a 360-degree dashboard view of key performance indicators (KPIs) in your warehouse.

  1. Establish replenishment processes

Just as important as optimizing your receiving process through improved communication with suppliers is honing your replenishment processes to reduce on-hand inventory while increasing service levels.

You can build these processes and avoid unnecessary carrying costs with strategies like automated reordering, and setting product minimums and maximums to trigger replenishment. Dynamics 365 Supply Chain Management’s priority-based planning feature can be used to configure optimal replenishment based on demand priority, current stock levels, and projected inventory.

Increase Warehouse Productivity with the Right Technology Suite

Microsoft Dynamics 365 Supply Chain Management helps you build an intelligent and resilient supply chain with real-time visibility, agile planning, and business continuity.

The warehouse management module within Supply Chain Management is fully integrated with other business processes such as transportation, manufacturing, quality control, purchase, transfer, sales, and returns.

But in your warehouse, not everything can be solved with automation and technology. A too-small facility or lack of employee buy-in will stand in your way. The most effective way to leverage the right technology in your warehouse for greater efficiencies is to pair it with best-practice business processes.

Sikich empowers modern distributors to drive warehouse efficiency, reduce downtime, and know important metrics down to the minute. By combining best-in-class technology and processes, Sikich can help you assimilate productivity into everything from receiving to picking to replenishment. Connect with us to learn more.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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