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 Best Practices
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.
- B – 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.
- C – 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.
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.
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 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
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.
- Negotiate with your manufacturers to ensure purchase orders are placed on time and get filled in the time promised.
- 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.
- 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
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 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.
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 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.
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.
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.