Awhile ago we talked about tips to optimise your warehouse, but we didn’t go into exactly what warehouse optimisation is or why it’s important. The term “warehouse optimisation” is fairly obvious in what it means; it’s a warehouse that works as well as possible and it’s something warehouse owners and managers want. But let’s dive deeper into what warehouse optimisation is.

The important thing to realise here is that warehouses are more than just simple storage. Warehouses are the centre of many businesses. Warehouses not only store the goods that a business sells, they’re also responsible for receiving and shipping those goods. And getting goods shipping quickly is central to good customer service.

This is why having an optimised warehouse is important.

Warehouse Optimisation Has A Goal

It’s easy to say that warehouse optimisation is just trying to create the best possible warehouse for a business. While that’s the case, there’s more focus to that. Just trying to be “the best” doesn’t mean much if we don’t know what the best is.

One thing warehouse utilisation looks at is space utilisation. Warehouse space can be expensive, so it’s important to ensure that it’s used effectively as possible. This means making sure there’s a good balance between any pallet racking storage density and selectivity; this will depend on what’s being stored, how many SKUs there are, and the throughput of the warehouse. A major part of warehouse optimisation is assessing space utilisation and how to improve it.

Warehouse optimisation also aims to improve inventory accuracy. Inventory accuracy is hugely important for the operation of a business. From a customer service point of view, having an accurate count of inventory makes sure customers get what they ordered. From a business operations point of view, having an accurate count of inventory stops overordering.

Warehouse optimisation also deals with optimal workforce levels. Understanding how many people are needed in a warehouse to keep it operating not only helps make sure the warehouse actually works, but it keeps budgets in check too.

An example that uses all of these factors in warehouse efficiency is picking time. How long it takes to pick an item depends on how the warehouse is laid out, how different SKUs are stored on pallet racking or shelving, how easy the item is to find, and the workforce available to find it. Improving one of these things can improve picking time.

But Warehouse Optimisation Is About Making Everything Work Together

Although in the picking example we saw that improving just one thing could be a big help, great warehouse optimisation looks to understand how multiple parts of warehouse workflow can work together to create even larger improvements in warehouse efficiency.

A good warehouse optimisation plan looks at the operational aspects of a warehouse and the functional aspects of a warehouse. The operational aspects of a warehouse include the picking and packing, shipping, receiving and more; these are the core parts of what makes a warehouse what it is. The functional aspects of a warehouse include the layout, technology, types of storage, and the warehouse; while this is away the core of the warehouse, you still can’t have a warehouse without these things.

So, in the example of improving picking time, rearranging a warehouse to make it so that more popular items are closer to packing areas may be a good way to reduce travel time for picking, but how does this affect the storage of other items? How does this new layout affect the movement of forklifts throughout the warehouse? Was this space previously used to process returns and will you lose inventory accuracy now that it can’t be processed properly?

Of Course There’s No Single Answer

None of these questions have a single answer, and there’s never a single simple answer to warehouse optimisation. This is because every warehouse is different and every business and its needs are different. There are best practices that can usually be used across different situations, but ultimately optimising a warehouse well means coming at it as a unique challenge.

There are a lot of factors that go into warehouse optimisation, and it takes a professional to understand what needs to get done. Feel free to get in touch if you’d like advice on your warehouse.