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5 signs your warehouse needs to optimize

11/8/2021

5 signs your warehouse needs to optimize

The supply chain — lengthy, but also very important. There's a lot that can go wrong along the way. Fortunately, that's what optimization is all about.

If you're afraid your warehouse might be lacking, here are five signs that may prove you right.

1. Too many unused SKUs
Stock-keeping units are an important part of the fulfillment process. The more SKUs in the warehouse, the more product you hold and the more revenue you may accrue. However, too many SKUs can cause operational inefficiencies, according to Trade Gecko.

On top of increased storage costs and a lot of capital tied up in stock, you're much likelier to run into order fulfillment inaccuracies, too. More inventory means more complexity during the distribution process, which is where mistakes are bound to happen. Optimizing your warehouse with a proper warehouse management system will help root out these inefficiencies and correct mistakes before they can happen.

2. You struggle to retain employees
Warehouses are only as good as the employees who work inside them. If your warehouse is finding it difficult to hold onto your workers, it may be because your technology is outdated or inefficient.

Automation isn't only helping companies increase productivity, it's also making warehouse workers much happier. Robotic pickers, forklifts and other automated tools are streamlining hard, physical tasks. Workers are, in turn, spared the physical and mental toll that those duties may have inflicted. In the meantime, they're better served performing other jobs around the warehouse and staying busy elsewhere.

3. Frequent inventory stockouts
As peak volumes come and go throughout the year, it's always a challenge to stay atop of the reordering process. A tell-tale sign of inefficiency is when a warehouse frequently goes through product shortages and can't fulfill orders.

This can have severe consequences for a warehouse. According to Quentelli, companies lose up to 12% of their yearly revenue due to inventory issues. There are a number of automation solutions that prevent stockouts from happening. From inventory management systems to predictive demand software, there are no shortage of ways to optimize the ordering process.

4. Too much time spent picking
As the costliest process in the warehouse, picking is one of the most important to run efficiently. Warehouse workers spend much of their time collecting goods for fulfillment. This can mean a lot of time spent walking to and from areas of the warehouse in search of those goods.

The first step to optimize the picking process is to make sure that the highest volume product is closest to the packing center. Additional technologies can help streamline picking, such as wearable devices or systems that allow workers to scan the warehouse quickly to locate products.

5. Too much waste during the packing process
After picking, the next important step is to pack goods for fulfillment. Critical to this point is not only the safety of the product, but allocating the correct size packing to each order so as to reduce waste and cut down costs.

If you find your warehouse is overestimating the size of packaging relative to the order, it's a good idea to invest in packing optimization. Automated packaging algorithms can choose the most appropriate size package for each order. In doing so, warehouses save big in the long run. Not only does packing become streamlined, the quantity of truckloads starts to decrease.