What is Warehouse Management?

For a warehouse to run smoothly it requires a good warehouse management system. Warehouse management systems are software solutions that ensure seamless transitions within the supply chain, distribution centers, and the warehouse. That, combined with the efforts of warehouse employees, can make for an extremely efficient warehouse free of error and mis-ships.

But, warehouse management does not run solely on the reliance on a warehouse management system—it includes the entire ecosystem of the warehouse. From how the docks are loaded to how a return is made, warehouse management must adhere to proper guidelines and processes that help make it a better workplace and warehouse.

Following these warehouse management best practices can help alleviate any breaks in the supply chain and provide the employees with a system that makes their job easier. Read on to see warehouse management best practices that you can implement in your company.

Warehouse Management Process

Some of the most common warehouse management processes are used throughout the world. Here are the basic steps and processes that are commonly used within each of them.

Picking

Picking is a really simple and essential part of the warehousing process. There are several ways that you can refer to picking. Some might call it prepping, others might consider it something else, but in essence, picking is just the time workers spend walking throughout the warehouse to find different items that have been ordered.

There are a number of ways to make the picking process more efficient and strategies that you can use so that your warehouse workers aren’t running mindlessly throughout the space trying to find different products and materials for orders. Depending on the size of the warehouse and the diversity of products, this can be a huge task. Needless to say, good picking strategies are needed as warehouses grow in size, capacity, and busyness.

Here are some of our favorite efficient picking strategies – be sure to check out our warehouse picking 101 post for a more in-depth look.

Zone Picking

Zone picking is really simple. What you’ll need to do is put inventory items that are regularly picked together in specific zones. That means that you’ll be able to have your pickers quickly move throughout different zones without wasting time looking through every individual shelf. For warehouses that regularly pick the same items in groups, this strategy is perfect.

Discrete Picking

One of the most popular of all picking methods is discrete picking. This strategy is incredibly easy to implement and, in general, is really easy. Discrete picking is what most people likely think of when they think about a picking strategy. All you’ll need to do is walk through the warehouse and pick items in the order that is most efficient. Some strategy is definitely required because you need each item to be placed in order, but after that, it’s just a matter of following the list.

This strategy is always best used in smaller warehouses because of the amount of walking or moving throughout the warehouse that is required.

Batch Picking

Batch picking is when your picker will pick specific items for a group of orders all at once. If you have a large warehouse, this is a way for the picker to spend less time walking throughout the entire warehouse and more time focusing on filling orders strategically.

When pickers only have to grab specific SKUs once or twice a day, it will really speed up the process and help make their job not feel quite redundant.

Wave Picking

Wave picking is a lot like discrete picking except with a different time frame. When wave picking is done, pickers only go through the warehouse at specific times. During those times, they’ll grab everything they need to and spend all of their other time completing different tasks.

This strategy works best when the team of warehouse pickers is also required to finish different jobs along with their warehouse picking. In that sense, it’s also a way to have many different members of the team working together to complete a somewhat tedious task.

Beyond the last few ideas, there are some less common strategies where you can combine different approaches. Be sure to check out our Warehouse Picking 101 blog post.

Packing

warehouse full of man working on merchandise inventory.

Packing within a warehouse focuses specifically on the packaging of orders for shipment. Depending on what your warehouse specializes in, this can look very different. In some cases, you may need to pack individual products, orders, or pallets for shipments. It’s definitely an extensive process, but it doesn’t need to be frustrating, confusing, or difficult, but it does need to be well planned. Without having a very successful strategy for your packing department, your warehouse will likely struggle and, in-turn can get backed up.

Ensuring that your packaging portion of the warehouse is well maintained is very important. without it being well maintained, you could miss orders, ship incorrect items, or even forget to ship orders altogether. Here are a few different ideas for how you can successfully structure your packing.

Keep Things Clean and Organized

Keeping your warehouse clean and organized is essential to keeping everything on track. If you don’t keep your warehouse clean, it’s definitely going to come back and bite you eventually. Lost orders, lost inventory, and missed shipments will just be a few of the problems that come to those who aren’t able to keep things clean and organized.

Double-Check Each Order

One sure-fire way to ensure that every order is filled week by week is to double-check orders. If you aren’t already double-checking orders before you ship them, then you definitely should start doing that right away. There are a few different ways that you can double-check shipments. One obvious way is to manually check each and every package before it is sealed for shipment. But, perhaps a more efficient way is to use a scale. Many larger warehousing companies such as Amazon will use scales to check the weight of each order before it goes out. This system is pretty simple as you could set up a scale and barcode system that would tell you what each order should weigh.

No matter how you choose to double-check each order. Make sure that you take the time to do it.

Use Efficient Packaging

Stack of trendy e-commerce packaging.

Efficient packaging will help to bring your shipping costs down and your profits up. While this isn’t so much to do with packing efficiency, it definitely can have something to do with it. Perhaps the new, more efficient packaging allows you to more quickly pack items or more quickly move and store them throughout your warehouse.

If you’ve never thought about your packaging, then be sure to check and see how it’s doing for efficiency.

Keep Inventory Accurately Updated

Keeping your inventory up to date will help to ensure that you always know what is coming in and going out of your warehouse. When you’re able to keep track of your inventory, you’ll have a better idea of what your packing process looks like. For instance, if there was a surplus of a certain item, you’d likely be able to find the order that missed it.

One way to keep track of your inventory records is with inventory management software like topShelf from Scout. TopShelf can help you manage your SKUs and keep track of inventory with barcode scanning and inventory management. Get a free demo today!

Shipping

When it comes to shipping, there are all sorts of ways that you can utilize different processes to get your warehouse running more efficiently. One of the biggest problems with shipping is that it’s often extremely expensive. The cost of shipping is often determined by the size and weight of what you’re shipping. But, in some cases, you can get discounts and deals from shipping companies if you send high quantities through them regularly.

Order Tracking Software

When it comes to shipping, we’re only going to touch on one specific point here, order tracking software. Providing order tracking for your customers is almost essential these days. Whether you choose to provide full order tracking or just something very minimal is completely up to you, but it will improve your shipping process by making customers happier. Additionally, you’ll be able to close the loop on orders and not spend too much time worrying about whether or not the order arrived on time.

Using 3PL for Your Warehouse

3PL or third-party logistics is when two warehouses work together to lessen the workload that would otherwise all be on one warehouse. Partnering with a third-party logistics team can save your warehouse money, time, and manpower that you might not have. Here are a few reasons why you might get started using a 3PL.

Ultimately when it comes to 3PL, the third-party can help with almost anything within your warehouse process. All you’ll have to do is employ them to make your job a little easier.

Receiving

A 3PL team can handle all of the receiving for you. Through the use of cloud-integrated software systems, you’ll be able to track inventory throughout its entire lifetime in your system. When you ship products to your 3PL, they’ll scan them and place them in their inventory system.

Warehousing

After the 3PL has your inventory, they’ll be responsible for storing it and keeping track of it. This is one of the biggest reasons that many different companies consider using a 3PL. Warehousing can take immense amounts of space, and having that space can be expensive for small businesses or e-commerce businesses that want to focus more on their online business than do with the warehousing or shipping of the products that they sell.

Picking, Packing, Shipping

Customer satisfaction and inventory tracking.

When it comes to picking, packing, and shipping, a 3PL can handle everything for you. All you have to do is send order information to their warehouse, and they’ll use their employees to retrieve items from storage, pack them up, and get them shipped to your customers. In many cases, they can use your logo and return address so that customers won’t ever know where the specific order originated from.

As you can see, there are many advantages to using a 3PL, and one of the biggest ones is the money that will be saved. Not only can a 3PL store huge amounts of your inventory, but they’ll also handle all of your picking, packing, and shipping.

Warehouse Management Best Practices

Prioritize Automation

Long ago are the days where everything had to be manually entered, so why are you still doing it? Automated data gathering and scanning can help to streamline the entire process from picking to shipping a package and placing orders or processing returns. Automation is the key to success and the way the world is moving, so embracing it can speed up entire processes, track valuable data, and avoid errors that come with manual entry.

Invest in a Better WMS

Warehouse management systems help you maintain and manage all things related to your warehouse operations, supply chain management, and picking, packing, and shipping. A good WMS can be the difference between a streamlined workflow and a messy, inefficient one. You can gain valuable data insight, manage workflows, track employee time, amongst other things. Using TopShelf as your inventory and warehouse management tool can be an effective way to improve processes across the board, without severely changing how you run things.

Prioritize Employee Safety

There are tons of safety regulations and guidelines that ensure your warehouse employees stay injury-free and help each other stay that way as well. Make sure that whichever way you take your warehouse management, that prioritizing employee safety is at the top of the list.

Employees should know how to climb a ladder correctly, drive a forklift, look for open shelving, etc. By conducting safety seminars and reminding your employees to be diligent on the job, it can save a lot of people from harm. Employees may not always question safety methods because they worry about calling out their superiors. Still, if you are proactive in securing their safety, that can be major in retaining employees.

Reduce Touch Points

There’s a saying—there are too many cooks in the kitchen—which means there are just too many people involved in a situation. This can definitely ring true along the supply chain. By limiting the number of touchpoints and hands that a package or process goes through, you can limit errors and delays.

If it makes sense to have one person package the product, seal it, scan it in, then get it on its way to the truck at one station, then do it! Often an assembly line approach is actually only making things worse. Too many hands and too many processes that are not aligned is where errors happen.

Organize Based on ABC Analysis

Merchandising your warehouse in a way that makes sense is very important to get products sold and moved in an appropriate amount of time. Some warehouses use the FIFO or LIFO methods, but an ABC analysis can help position products in the warehouse based on the highest, middle, or lowest value.

  • A – High-value, low sales: this group is meant for the merchandise that makes your company suitable money but costs a significant amount to procure. You won’t want to keep these items in stock for too long because of the financial strain that it could put your income statement in.
  • – middle-value, average sales: Falling right in the middle is letter B. These goods are sold on a more predictable basis but aren’t the most frequently sold.
  • – low-value, high sales: These merchandise items are the ones that you can’t keep on the shelf. They help to boost your balance sheet but also don’t provide a large source of income because of a lower selling point. You shouldn’t need to market these items too much or give them a lot of attention.

inventory tracking fo a large warehouse.

Boost Employee Incentives

Your warehouse employees work very hard and want to feel appreciated and praised for their work. Boosting employee incentives in the warehouse workplace can be an effortless way to boost morale, increase productivity, and help with employee retention. Some incentives that can help in the warehouse specifically include a sound HVAC system. The warehouse should be nicely conditioned in the summer and perfectly heated in the winter, especially on the loading docks, where the doors are open for extended periods of time.

You can also have employees of the month, added snacks and beverages they can have throughout the day, and ensure proper breaks away from the warehouse for a refresher. Plus, incentivizing record numbers can be a fun way to boost productivity while also praising those who commit to process improvement and streamlining processes.

Plan Ahead

Tracking data points and forecasting can make all the difference in your warehouse. By forecasting future numbers, you can plan and expect fluctuations and spikes or drops in volume. To ship on time, with accurate information, you need to be prepared with the proper procedures, enough staff, and the right budget. Budgeting for things like extra machines, enhanced software, and packaging materials can help alleviate any breaks in the supply chain when that time comes.

Implement Lean Warehousing

Lean warehousing implements the five principles of lean thinking, which are value, value streams, flow, pull, and perfection.

You first define value based on the customer’s need for the product or service.

Value streams mean you determine all steps that get you from the beginning step to the final stage, where the product is in the hands of the consumer.

Once you determine the cleanest and most streamlined path of the value stream, you figure out the proper flow. The supply chain has many steps to it, and once you’ve trimmed the fat of your warehouse operations, you can finally figure out the best flow to your processes.

Pull means that you have products readily available for a customer to “pull off the shelf” as they need it. This requires seamless workflows from the inventory team, the shipping and receiving, and the pricing team. If everyone works cohesively, pull can be perfected.

The last step in the lean warehousing principles is perfection. We say perfection in the sense that practice makes perfect. However, obviously, with human beings and even technology and time, we find ourselves having to face imperfect things. But, when it comes to implementing lean warehousing strategies, the pros say to run through your system at least 10-20 times before you can call-out, locate, and fix any issues in the value stream. So the perfection stage simply means, keep running through the first four steps until you can run as efficiently as possible, without fail (for the most part).

Continuing Education

Continuing education is a big one. Of course, employees learn more and more on the job each day, but this doesn’t mean they aren’t missing something. Continuing education falls in line with employee retention and incentives. Offering educational opportunities within your business not only helps you, but it helps your employees. It encourages employee growth, retention, and enables you to stay in line with updated trends and safety procedures in your industry.

Plus, to think that your employees are going to be with you forever can sometimes be wishful thinking. It doesn’t mean you should hold your employees down to one role. It means you should encourage their growth within your business, but also with the knowledge that as they grow and learn, they may find they can move on and apply to other roles elsewhere. This is a good thing!

A good employee actually wants to learn more, and they are not content just sitting in one role without advancement. You should invest in continuing education and make it a regular practice within your warehouse. Things move fast in the industry, and keeping up with that can only benefit you as an organization and as an employer.

Regular Cycle Counting

As much as we want to rely on scanning systems and automation, conducting regular counting of your warehouse inventory can secure those numbers. Plus, regular cycle counting each quarter can end up being a fun employee activity where you all pitch in and count the inventory, order pizza, and hang out. It’s essential, at least at the end of the year, to get all of your inventory counts accurate and in order.

Regular cycle counting can accomplish multiple things at once. You can compare your manual counts to the system counts. This can call out any discrepancies that lie within your warehouse management systems or software. You can also do your ABC analysis at the same time, and re-organize your inventory to better fit the demand. Lastly, you can clean, dust, and sweep your warehouse and shelving to ensure people are receiving products that look fresh and new.

Streamline Information Sharing

warehouse management worker using barcode scanner.

Exemplifying your data and warehouse information numbers amongst the group can be a great motivator. One way to share this information is with live dashboards on flat-screen monitors throughout your warehouse or in main packaging areas.

If you share live data in a way that doesn’t put pressure on your employees, it can be an incredible motivator for them and help them feel like they have some insight into the amazing work they do. You can show shipments pending, packing, and those that have gone out. You could also include shipments that are about to be received into the warehouse. It helps streamline the entire process because, without that live data feed, they may have to reach out to those in the purchasing departments to get updates on purchase orders being received. It streamlines everything and gives your warehouse employees visibility on the business as a whole.

Set and Track KPIs

A KPI, or Key Performance Indicator, is often something that is only seen as a set goal for individuals in a corporate setting. But, setting KPIs as a business helps to create an overarching goal that everyone within the company strives to achieve. This can be done departmentally, especially in a warehouse setting.

KPIs in a warehouse could look like:

  • Decrease shipment times for incoming orders
  • Decrease time it takes to unload a delivery truck
  • Clean and organize one section of the warehouse per week

Now, these are very basic, overarching examples of KPIs you could set within your department. With KPIs comes data tracking, and that’s the most important part. So, some of the responsibility will lie on managers and team leads to gather the actual data and report it to the company metrics. This can actually create a bit of drive and a bit of accountability within the team. Reaching goals every quarter can help improve your overall workflow.

So, following these best practices and utilizing the tools available to you can only improve your warehouse management. The main takeaways should be; automate where you can, focus on your employees, and make safety a priority.

Inventory Management vs Warehouse Management

Oftentimes inventory management and warehouse management are used interchangeably, which is incorrect. The two areas deal with very different aspects of a business. Inventory management focuses mainly on inventory control but also on supply chain management, forecasting, pricing, and product strategy. It makes sure that inventory counts are accurate and match demand. Inventory management also provides real-time data analytics so products can be purchased and priced competitively in the market. 

Warehouse management, on the other hand, utilizes warehouse management systems to centralize all the processes with stocking and handling inventory. As you know from the best practices, it’s a very robust and expensive part of the warehouse process, but inventory management remains its own entity. 

Despite their differences, they also carry many similarities. Both warehouse and inventory management play critical roles in picking, packing, and shipping items. As well as cycle counting, stocking shelves, managing multiple locations, and overall receiving, tracking, and calculating inventory stock levels. 

What Does a Warehouse Manager Do? 

A Warehouse Manager is the boss of the warehouse. They handle all of the administrative duties but also act as a coordinator for warehouse activities as well as a liaison between departments, the business, and your customers. They need to be highly organized and be somewhat of a jack-of-all-trades. Some of their duties include;

  • Doing weekly standups with the warehouse employees to boost morale and plan out the week.
  • All hiring and training of new employees.
  • Manage schedules and time-off.
  • Available to help on any tasks on the floor.
  • Ensure warehouse best practices are being followed and all work meets all company policy and industry standards.
  • Handing out the shipping and receiving lists for the day to their teams.
  • Monitoring real-time data reporting for accuracy and checking for any outliers.
  • Conduct regular inventory checks and counts.
  • Basic organizational duties from clean-up to picking up any slack during busy times.
  • General management and assistance of all warehouse staff—must be readily available for any questions or problems that arise.
  • Monitor shipping schedules and work with other departmental managers to make sure everything runs smoothly.
  • Help with warehouse planning to ensure accurate space and availability for new or slow-moving stock.
  • Assisting staff with any computer errors or order issues and authorizing any changes especially with prices and discounts.
  • Ensure emergency training is done regularly and all emergency policies are posted and followed by employees.

 

Warehouse managers must have a vast knowledge of how each area of the warehouse runs, and have often worked as a warehouse employee at one point. It helps to know all of the touchpoints up and down to be able to assist with any issues. When a system breaks it’s up to them to sort it out and fix it. A lot of responsibility goes into being a warehouse manager, but it is a very rewarding job and makes a huge impact on any business. 

Effective Distribution Strategies for Improving Your Warehouse Workflows

When it comes to picking, packing, and shipping you want to achieve two things: accurate shipments and fast shipments. The industry is constantly changing and as people shift more towards online-only shopping and demand faster shipping speeds, there is always room for improvement in your warehouse practices. Here are some of the best strategies to improve your warehouse and streamline workflows. 

Reduce Your Order Lead Time

Two lead times affect your business. First, order lead time is the time it takes for an order to reach the customer. Slow lead times can lead to irate customers who expected their order in a specific window, which ended up being extended. Ensuring your warehouse is organized for easy accessibility, your shipping team is efficient, and shipping times are accurate on the website, you should be able to maintain a short lead time for orders. 

Purchase order lead time, on the other hand, can negatively affect stock levels and create more backorders and out-of-stock notifications. To improve PO lead time, there are a few things you can do. 

  1. Negotiate with your manufacturers to ensure purchase orders are placed on time and get filled in the time promised.
  2. Increase order frequency. While one order is shipping or en route, it can be a good idea to place another PO, especially if the items are in high demand and must be in stock. 
  3. Consolidate your suppliers so there are fewer places to make mistakes and you know exactly where your orders are coming from.

Consolidating Box Sizes and Packing Materials

When items are packaged manually, it requires an organized assembly line to move quickly and efficiently. The last thing you want is for your packaging area of the warehouse to be the biggest holdup. If you have too many options for packing materials and box sizes, it can really slow things down. 

That’s why consolidating to have just 3-6 box sizes, knowing how to quickly fill them is key. Then, consolidate your packing materials to include one for fragile items, and one to fill any empty space, and leave it at that. The fewer items an employee needs to consider, the faster they can work. 

Implementing the Right Picking Method

warehouse management

Coworkers working together in warehouse distribution storage area checking inventory. Warehouse logistics.

There are four basic types of picking that work best depending on the size of your business and the number of orders coming in.

Zone Picking

Zone picking is when the warehouse is divided into different zones with pickers specifically dedicated to only one zone. This can help with the flow of workers and people staying out of each other’s way, plus they get to know their zone especially well for quick picking. 

This is best for larger operations that ship out large volumes of orders at one time. The only issue is with orders requiring products in different zones, and those pickers must communicate and ensure the order gets shipped complete.

Wave Picking

The wave method is similar to zone picking, in that the warehouse zones are still picked by their appropriate section but this happens all at once and then are put together and shipped by a separate group of workers. This is also best for larger operations shipping high volumes, but it can be costly due to extra labor and cause breaks in efficiency. 

Batch Picking

Batch picking can be especially helpful in smaller businesses that get a lot of single item orders. Batch picking means a picker will get a list of 10-30 items depending on size, and go pull off those items then bring them back to the packing station where they will be packed and shipped. 

Single-Order Picking

Lastly, small businesses like startups can benefit from single-order picking. If you are shipping out 50 or fewer orders per day and have a small team, single pickling can work great. It’s when an order is picked, packed, and shipped in its entirety before moving on to the next one. 

Rearrange Your Warehouse

When your business starts, you probably organized your warehouse using one of the many organizational techniques recommended. But as your business grows you will find out which products sell faster or more often. You will also have your processes very well put together and know what does or doesn’t work for you. 

Rearranging your warehouse to more appropriately suit the needs of your picking and packing team can ultimately change how efficient the entire warehouse runs. Don’t be afraid to move things around and try a better method or organization. 

Receiving Automation

You likely use a warehouse management system to keep track of inventory, orders, everything associated with the warehouse. But there are always ways to introduce more automation to make your workflows more efficient. There are programs to bring even more automation to your receiving department. These automation systems allow for bulk receiving actions rather than scanning everything via your barcode scanners. It’s something to consider to shave off a lot of time between the products arriving and when they can be stocked on the shelves. Every little bit counts.

One of the best practices in warehouse management is having a proper warehouse management system. We believe that TopShelf has the tools needed to create a seamless, automated workflow when it comes to tracking inventory, employees, and warehouse data. Take it for a test drive with our FREE demo.

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