Running a warehouse efficiently involves a lot more than just storing products. To help you optimise your warehouse outcomes, here are four essential strategies that can significantly improve your operations.
1. Analyse and Improve Your Stock-Turn
Stock-turn refers to the amount of time it takes to turn over stock, and it can be applied to a single SKU (Stock Keeping Unit) or the entire warehouse inventory. Regularly analysing your stock-turn helps identify and reduce SKUs that are not frequently turned over, which can lead to poor returns and wasted space.
Key Points:
- Stock-Turn Metrics: Measure how often each SKU is sold and replaced over a specific period. A higher stock-turn rate indicates more efficient inventory management.
- Inventory Management: Store high-demand products in prime locations for easy access and quick turnover. This reduces the time products spend on the shelf and minimises storage costs.
- Cost Analysis: Evaluate the cost of storing slow-moving inventory versus the potential revenue. Eliminating or discounting unsold items can free up valuable space and reduce overhead costs.
Case Study:
A customer implemented a policy where no product stayed on the shelf for more than 14 days. Unsold SKUs were either returned to suppliers, sold at a discount, or disposed of. This aggressive strategy resulted in a net inventory stock-turn of under 30 days, significantly improving warehouse efficiency.
2. Regularly Analyse and Optimise Your SKU Locations
Pareto’s Principle (the 80/20 rule) is vital for optimising product locations. Typically, 80% of your inventory activities come from 20% of your SKUs. Position these high-demand items in easily accessible locations near both Receiving and Despatch areas to enhance efficiency.
Strategies:
- Strategic Placement: Place the most frequently picked items in the most accessible locations to minimise travel time for warehouse staff.
- Re-evaluation: Regularly reassess SKU locations based on sales and movement data. This ensures optimal placement and reduces unnecessary handling.
- Storage Solutions: Implement dynamic storage solutions such as flow racks or automated systems to enhance picking efficiency for high-demand SKUs.
Benefits:
- Increased Efficiency: Reduced travel time and handling lead to faster order fulfilment.
- Cost Savings: Optimised storage reduces the need for additional warehouse space and equipment.
3. Examine and Enhance Warehouse Activities
Optimising SKU locations is just one part of improving warehouse efficiency. It’s equally important to scrutinise warehouse activities to identify and eliminate inefficiencies. Engaging all stakeholders in open communication can yield valuable insights and innovative solutions.
Strategies:
- Activity Monitoring: Use tools like video monitoring or time-and-motion studies to identify bottlenecks and areas of inefficiency.
- Stakeholder Engagement: Involve warehouse staff in identifying problems and brainstorming solutions. Their firsthand experience can provide valuable insights.
- Process Improvement: Implement lean principles and continuous improvement practices to streamline operations and eliminate waste.
Example:
A customer used video monitoring to analyse workshop processes, discovering inefficiencies that led to unnecessary dead-time. By collaborating with Elbowroom, they designed a unique live-storage solution that significantly improved process times, enhancing overall productivity.
4. Emphasise Bigger, Stronger, Safer Solutions
When making investment choices for your warehouse, consider the impact on the size, strength, and safety of your environment. Ensuring that your storage systems and suppliers meet high standards can make a significant difference in your operations.
Key Considerations:
- Supplier Evaluation: Choose suppliers with a strong reputation, engineering support, and comprehensive safety systems.
- Future-Proofing: Invest in scalable and durable storage solutions that can adapt to future growth and changes.
- Safety Compliance: Ensure all equipment and processes comply with relevant safety standards to protect your workforce.
Supplier Evaluation Criteria:
|
Storage System Supplier’s Score Sheet | |||
|
Bigger |
Stronger |
Safer | |
| Supplier’s knowledge | |||
| Supplier’s engineering support & endorsements | |||
| Supplier’s insurance cover | |||
| Supplier’s reliability | |||
| Supplier’s reputation | |||
| Supplier’s documented WHS systems | |||
| Supplier’s products | |||
| Supplier’s support (of you) | |||
| Supplier’s understanding of your expectations | |||
Benefits:
- Enhanced Safety: Reducing the risk of accidents and injuries protects your workforce and minimises liability.
- Operational Reliability: High-quality, durable equipment reduces downtime and maintenance costs.
Optimising your warehouse operations involves a combination of improving stock-turn, strategically placing SKUs, analysing and enhancing activities, and ensuring a safe work environment. Implementing these strategies can lead to significant improvements in efficiency and productivity. For expert advice and tailored solutions, contact Elbowroom at 1800 810 331.
By focusing on these four key areas, you can transform your warehouse into a more efficient and safer environment, driving better outcomes for your business.
