In today's competitive global market, many organizations want to ensure that every part of their supply chain runs smoothly, and warehouse operations play a critical role to supply chain success.
This article will explain different warehouse processes, best practices, and how to optimize resources for streamlined warehouse operations that maximize resources, profitability, and customer satisfaction.
The term warehouse operations refers to all the components of receiving goods, storage of goods, picking and packing orders, and shipping.
Although many people think warehouse operations consist of storing finished products, there are many other critical aspects to warehouse operations to ensure streamlined and efficient management, which include:
We’ll cover each of these topics in more detail below.
Companies send their products to the warehouse for unloading and processing. Order information is then sent electronically (ideal) or with a manual supply sheet (less ideal) to account for all of the items in a given order. Often, a manufacturer will send both.
Next comes the putaway process. For this stage, a clear plan of where all the inventory will go is critical. Organization, storage equipment, and the right software and handheld technology are key to keeping precise tabs on where all of the stock is located.
Depending on the warehouse size, the system could be as simple as labeled or numbered shelving, or it could be much more complex and involve hundreds of pickers and packers, robots, smartphone apps, RF scanners, and beyond. There are endless ways to complete the putaway process.
Here are four common storage methods:
Your type of business, software, technology resources, and headcount will determine how you run your warehouse operations and which putaway method(s) you choose. The most crucial part is to ensure that you and your warehouse manager have a clear and consistent plan of how everything will be stored.
Inventory management is a term that refers to tracking products or assets through every phase of its life cycle from production to final distribution to the end customer.
More specifically, an inventory asset tracking system is a software application that helps your business track the movement and exact location of assets. This includes physical goods such as equipment and intangible assets like intellectual property or software.
A good inventory asset tracking system can also be used to comply with regulations and mitigate loss in the form of spoilage (from improper storage), obsolescence, or theft.
Using a WMS can help you manage your warehouse operations at top-notch efficiency.
A WMS manages, analyzes, and displays all of the data in the production, storage, and distribution of goods. It takes in myriad inputs, analyzes them, and then shares them with real-time alerts and data visualizations to all stakeholders in warehouse operations and the broader supply chain.
Since a warehouse management system has all the real-time inventory levels and locations, it enables your business to locate, pick, pack, and ship orders much more efficiently. This minimizes the need to cross-reference orders or double-check stock availability.
There are many warehouse management systems (WMS), and identifying the best one for your business operations is crucial. Based on our expertise at Epicor, there are a few key distinctions we recommend looking for when picking a WMS.
An integrated system is usually an add-on for your existing Enterprise Resource Planning (ERP) system. A standalone system is easier to set up since there are no integrations needed, but it may have limited functionality. As it is designed specifically for your warehouse operations, this information is kept siloed from other business functions and software systems within your organization. This can slow down reporting and decision-making.
Your WMS system can be on premise (located on your facilities) or cloud-based where you access the software system through the web. Each solution offers different pros and cons, but increasingly companies are moving to cloud-based systems for the ease of managing licensed users, software maintenance and updates, and remote accessibility. With a cloud-based system, stakeholders can have hands-on access to data from anywhere in the globe and not just at the work site.
Managing your workforce is a key priority for your warehouse operations. Increasingly, warehouses are gamifying the work experience. This includes small perks, financial incentives, and lots of positive reinforcements to encourage employees to go the extra mile.
Utilizing employment agencies can provide added workforce capacity when you are understaffed or during peak periods of increased demand. Here, having a long-term relationship with a trusted staffing agency can help you continually and seamlessly meet fluctuating labor needs.
This supports the 80/20 approach, which many experts feel is the best rule to follow for warehouse operations. This means 80% of your labor force is permanent, full-time staff and 20% of your warehouse workers are part-time, seasonal, or contractor laborers so you can flex to changing operational demands.
With the majority of your workforce as permanent, full-time staff, you can ensure ongoing process training and up-to-date licenses and certifications.
In addition to maintaining compliance, there are other benefits like:
Warehouse operations are very heavy in the latest technologies. In the Age of Amazon, businesses everywhere need to step up their order fulfillment and distribution game—both B2B and B2C.
Here are some new intelligent warehouse technologies to consider:
Using Internet of Things (IoT) technology to connect, control, and monitor all the moving parts of a warehouse and optimize inventory levels and labor planning.
Your warehouse's physical layout and design can have just as much of an impact as the software system used to manage your warehouse operations.
For warehouses to be efficient, space allocation, design infrastructure, equipment, and inventory must all be balanced carefully.
Equipment Planning
The right equipment–including lifting and packing tools, pallet racks, conveyors, and forklifts–is key. It can keep operations running smoothly and safely, thus meeting customer expectations for rapid order fulfillment.
Space Planning or Racking
Effectively using all of your warehouse space can help you maximize capacity. Making the most of your space’s layout should be a top priority.
You should ask yourself several questions when considering organizational layout:
You should be able to adjust your storage requirements to the different types of goods–or different packaging for any of the goods–you carry.
Additionally, experts agree that you should arrange your racks in long rows, not short bursts, to maximize your space's use. They also advise not to stack pallets against the wall since this limits efficiency
Optimized Picking and Packing
Picking and packing is a vital part of the warehouse operations process. Having streamlined WMS and a well-organized and thought-out warehouse design can make the picking and packing run much smoother and quicker.
This is important for any business, but especially when it comes to warehouse operations. Facility maintenance doesn’t mean just sweeping and mopping floors. It refers to all the processes in place to keep the facility functioning at maximum efficiency and safety at all times.
This ensures that your warehouse is running at its total capacity. Not maintaining your facility can cause reputational harm. It can cause order processing and ship times to be delayed, orders to be canceled, and/or permanently alienating your customer base.
As touched on above, equipment maintenance is critical. Conveyor belts must be kept running, cranes must be kept operational, and machinery must be regularly repaired to prevent disruption. Repair materials must also be kept in tip-top shape.
Equipment maintenance can also reduce safety risk and operational liability. You do not want your employees injured by operating unsafe machinery because the equipment is not up to code or because your workers lack proper safety training and certifications.
Dispatch is when products are picked, packed, and made ready for shipment. The shipping labels are affixed during this stage, and the order is fully loaded and prepared to leave the warehouse.
Now, the end customer should be able to monitor tracking information for their order and know that the order is prepped to leave the warehouse. The level of detail given depends on the shipping carrier.
Dispatch is the final step before the shipment leaves the warehouse.
Loading dock operations are all of the activities involved with loading and unloading goods from trucks, cargo vans, and other transportation fleet vehicles at the warehouse. It sounds simple–and these operations can be–but managing it efficiently requires careful planning.
Warehouse operational planning needs to take into account:
It’s essential to have a well-defined loading dock operational plan with elements that include:
Managing returns is a not-so-fun but necessary part of warehouse operations. Generally, the customer initiates the return through the vendor or retailer. The printed shipping label usually has a scannable barcode or QR containing pertinent product and order details.
Depending on the system in place, employees may inspect the item before shelving, re-packing, and/or salvaging it. An item may need to be re-entered into the Warehouse Management System (WMS).
A robust Warehouse Management System (WMS) will allow for real-time reporting and analytics. This is beneficial because the warehouse operations manager can instantly view and share real-time data with other company and supply chain stakeholders, including changes in demand, changes in labor needs, shipment delays, or forecasted inventory shortages – anything that could impact warehouse operations.
Your WMS can be integrated into other legacy software systems or be a standalone system that is on-premise or cloud-based.
Mitigating product–and profit–loss is a crucial component of warehouse operations. This can mean damaged or lost products, lost productivity, lost sales, or lost customers.
When warehouses deal with substantial quantities of inventory, even a one percent loss can translate into millions of dollars.
A good warehouse layout, effective racking and storage of goods, and efficient picking and packing processes can help. This keeps inventory in good condition and quickly moving through the warehouse in a safe and organized fashion.
Goods that are not adequately stored can become damaged, lost, hard to locate and may become obsolescent before being purchased or leaving warehouse shelves.
We get a number of questions about best practices for warehouse operations. We wanted to share some of the most common points that our Epicor experts discuss with industry leaders in manufacturing and distribution.
Batch picking and zone picking are two different methods to pick orders in a warehouse.
In zone picking, the warehouse is divided into zones and each picker is assigned to one. Pickers work only within their assigned zones. This method can reduce walking time and improve speed, as pickers don’t need to move all over the warehouse to fulfill orders. However, this can create uneven workloads. Some zones may process a higher volume of orders, or orders that are trickier to pick (i.e., bulky or heavy goods).
In batch picking, by contrast, orders are batched together based on their location in the warehouse. Pickers pick all of the order items within a batch, which can increase efficiency and reduce walking time. However, pickers may still need to travel to multiple locations within a warehouse to fill all the orders within one batch.
The best method for your warehouse will depend on the volume of orders, type of goods, and specific layout of your warehouse.
Ultimately, the best way to determine which method is best for your warehouse is to experiment with both methods and see which ones proves most efficient.
When an order is already in process, and the needed inventory is received, it can be immediately assigned and filled. This typically happens in high-volume warehouses where ultra-fast fulfillment is required (i.e., overnight shipping).
A facility should be flexible for shifting market demand and business needs. This means the space can be (reasonably) easily configured as needed, to scale up or down. Although this concept seems straightforward, finding the right configuration can be challenging.
More space tops the wish list of many warehouse managers, but extra floor space is hard to come by. Utilizing the space you do have is crucial to handling a high volume of goods at maximum efficiency. This means no space is wasted, including rafters and vertical spaces.
While we tend to think about organizing spaces horizontally (easily within reach), thinking upward brings great benefit. It can hugely increase your warehouse’s storage capacity.
It can be very manageable to make use of vertical spaces with forklifts, safety ladders, and vertical storage carousels that can be operated (loaded and unloaded) with the push of a button.
Just in Time (JIT) is a management strategy that directly aligns raw-material supply orders with production schedules. This lean management strategy can work very well for manufacturers.
Companies employ this strategy to increase efficiency and decrease waste by producing goods only as needed, reducing waste and inventory costs.
As an example, Toyota has consistently been recognized for its lean manufacturing processes. Toyota is so efficient at this that the Just in Time strategy is also known as the Toyota Production System. The strategy has been utilized by Toyota since the 1970s.
Executing Just in Time (JIT) strategy requires excellent software (well-integrated across multiple business departments), steady production, solid machinery and warehouses, and reliable suppliers. With the JIT management strategy, many things must properly align. But executed well, the increased savings for a business can be staggering.
Safety is a massive priority. It’s necessary for compliance with state and federal safety governments and retail contracts, but beyond that, it keeps a warehouse operating at maximum efficiency.
A dirty and unorganized warehouse will be more prone to accidents, machinery breakdowns, slower at processing orders, and employee morale may run low.
Increasingly, using artificial intelligence (AI) and robots can improve the efficiency, accuracy, speed, and safety of your warehouse operations.
As an example, AI and robots can complete many repetitive, manual tasks such as picking, packing, and shipping which frees up human workers to focus on more complex tasks like inventory management, customer service, and processing returns.
Robots can also be deployed to perform more hazardous tasks that involve heavy objects or working with dangerous goods.
Amazon, Walmart, and UPS are three global businesses that regularly use AI and robotic technology. Walmart, for example, uses robots to pick items on the shelves and load them onto trucks.
To create a more streamlined and organized system, going paperless–as much as possible–is essential.
This can reduce printing costs, eliminate waste, maintain confidentiality, and improve safety. A warehouse is safer when there aren’t sheets of flammable goods scattered about for workers to trip on.
A warehouse control system (WCS) is a software application that manages the movement of materials in your warehouse, with the goal of moving goods as efficiently as possible. Features can vary, but a WCS typically offers:
A good WCS is invaluable to a well-run warehouse. Through automating the movement of materials, you can increase efficiency, reduce costs, and improve your bottom line.
Warehouse control systems (WCS) are similar to warehouse management systems (WMS)–they are both warehouse-related software applications–but they have different focuses and capabilities.
A WCS is focused on the movement of materials within a warehouse, and the most efficient way to move them into storage, out of storage into packaged orders, and then out the door.
A WMS, by contrast, is focused on the overall management of all aspects of running a warehouse, including inventory management, order management, and coordinating all other facility activities.
Many businesses will opt for a WMS or WCS based on their specific needs. However, a WMS and WCS can work together to offer a more comprehensive software solution for your warehouse operations with the WCS focusing on materials and WMS focused on overall operations management.
The end result–through using either or both systems–is improved efficiency, satisfied customers, reduced costs, and increased profits.
Enterprise Resource Planning is an all-encompassing process companies use to holistically manage the many critical areas of their businesses. Examples include planning, purchasing, budgeting, revenue forecasting, sales, marketing, accounting, finance, and human resources.
While WMS and WMC both focus on warehouse management, ERP focuses more broadly on your entire business. This can include supply chain operations, like order management, sales forecasting, and coordinating warehouse activities like sourcing materials and distribution of final goods to retailers.
An ERP can be used alongside a WMS and/or WMC for maximum efficiency and customer.
Here are some of the factors to consider when choosing between an ERP or another software solution:
With a stronger understanding of warehouse operations, businesses can ensure they run at maximum efficiency and minimize pain-in-the-neck disruptors.
While there are many variables to warehouse operations, planning and research play a considerable role in success. Through leveraging technology–and using best practices we’ve outlined in this article– your business can stay ahead of the curve in managing both warehouse operations and your bottom line.
Talk to an Epicor team member today about how we can help optimize and future-proof your warehouse operations. We have decades of experience and expertise we’re happy to share, and we’d like to learn more about how we can help your business.
