Part 6 of a 6 Part Series: Building Infrastructure Strength for Future Growth - Optimize, Organize, and Design
Each week, we will go into details on how to address project and change management now to create a resilient and robust organization for tomorrow.
If you missed last week’s blog on Employee Training, you can check it out here.
This week, we will look at the 6th and final way a company can use downtime to impact the greater good of the organization and position themselves to be a better, stronger company when the work picks back up.
Optimize, Organize, and Design
When companies expand over time, it’s easy to just add on piecemeal to handle that growth. Those adjustments may work in the moment but as growth continues and operations begin to change or shift, how many times are those added processes and procedures revisited? An organization may not want to look at ways to become more efficient or effective because what they have in place still works. Those companies are in jeopardy of quickly falling behind the competition. However, if a growing company is willing to peel back the layers of the onion periodically and look at ways to optimize, organize, and design their entire operation as growth occurs, it becomes much easier to make adjustments along the way.
Specific Example: Reorganize the Warehouse
Deciding how to design a warehouse layout is a step of vital importance—it can make or break the productivity, safety, and overall success of a warehouse. The layout of your warehouse needs to maximize available space, allow for limited travel time, provide easy access to product, and create a safe work environment. While it can be challenging to design a layout that fits all needs, proper analysis of business objectives and practices, as well as a dedication to safety and a cultivation of productive procedures, can help you come up with a design that is optimal for success.
From receiving to storing to shipping, the layout and flow of your warehouse will determine in large part how well your business operates.
Following are 5 warehouse organization tips to get your warehouse in order and improve the speed and efficiency of your employees:
1. Re-evaluate your warehouse layout design
- Keep the following design elements in mind when planning (or updating) your warehouse layout:
- Flow – meaning the uninterrupted movement of materials, people, and traffic within your building
- Accessibility – meaning every product and all products on pallets should be accessible by everyone, usually without the need to move one product to get to another
- Space – meaning the maximum warehouse space you can afford, taking into consideration storage, stock, offices, working areas, empty pallet storage, battery charging, etc.
2. Use warehouse racking organization
Warehouse racking organization is a method of storing your inventory vertically instead of horizontally, such as on pallet racks. This is a cost-effective way to maximize your warehouse space if you carry a lot of inventory or if you have a small warehouse and can’t afford to buy more space.
3. Use ABC Analysis to set up warehouse inventory
ABC Analysis of inventory is a method of sorting your inventory into three categories according to how well they sell and how much they cost to hold:
- A-Items – best-selling items that don’t take up all your warehouse space or cost
- B-Items – mid-range items that sell regularly but may cost more than A-items to hold
- C-Items – the rest of your inventory that makes up the bulk of your inventory costs while contributing the least to your bottom line
4. Label warehouse inventory
Your employees shouldn’t have to rely on memory when searching for items in your warehouse. Every SKU in your inventory should be clearly labeled for easy identification.
Keep your labeling consistent for every item (i.e., always label the bottom right corner of boxes) and include all the necessary information on every label, such as:
- Product name
5. Make receiving inventory easy
Receiving inventory effectively is one of the key warehouse management tips because it sets the tone for the rest of your warehouse and inventory processes.
Here are a few ways you can improve inventory receiving:
- Optimize your receiving space by providing the proper tools and enough space to allow your employees to sort and store incoming inventory.
- Keep your receiving space clean and organized by removing clutter and putting every tool away after using it.
- Track inventory in real-time by implementing a perpetual inventory system, in order to reduce miscounts, missing inventory, and incorrect shipments.
- Monitor quality control by hiring a quality control manager to watch for mistakes, point out problematic procedures, and reduce the instances of inventory damage.
- Unload received inventory quickly and safely by using the appropriate machines (i.e., forklifts and conveyor belts) and following clear safety procedures.
- Avoid shipping the wrong items to your customers by verifying the goods received using metrics, such as the description of goods, product code, batch tracking number, etc.
A well-run and well-organized warehouse is a critical function within a company’s sourcing and procurement management efforts. While there is a direct relationship between procurement and supply chain management, the two functions are not interchangeable.
Procurement is the process of getting the goods and materials your company needs, while supply chain management is the process of transforming those goods into products and distributing them to customers as efficiently as possible. Warehouse operations are often where these two practices cross paths, so this pivotal business operation requires the most efficient and well-run systems.
It’s easy to become complacent in the way your company does business. If the company is turning a profit, employees are perceived to be happy, and suppliers and clients are limited in their complaints, then why spend the time to self-evaluate and make potentially disruptive changes? Times will change. Industry will change. The world will change. Preparing your company to have the structure in place to withstand economic downturns or extreme cases like global pandemics will allow for a quicker rebound when those crises are over. More importantly, a company’s ability to find ways to improve and evolve, no matter what the global economy indicates, will be a critical measure for your company’s future.
If you would like to download a free white paper from the Corcentric website where all 6 parts of this series of blogs are organized into one single document, please visit our library here.