5 Ways to Maximize Your Warehouse Space & Efficiency

The demands of managing a warehouse are constantly evolving. Online and multi-store retailing alike are becoming more and more relevant when it comes to connecting products to consumers – which makes sense since customers want what they want when they want it.

As a result, business owners are scrambling for ways to increase warehouse space and efficiency. In fact, Supply Chain Dive recently reported that the average size of warehouses in the United States has increased by 143 percent since 2007, which they attribute to the rise of ecommerce.

This said, outward expansion is not a feasible or a desirable option for many mid-size companies. Even when warehouse expansion is on the horizon, it is still preferable to explore other measures of increasing efficiency before making the investment in adding square footage.

To help maximize space and increase efficiency in your company’s warehouse, consider the following five tips... 

#1. Operate with Minimal Inventory

While at first glance this might seem counterintuitive, excess inventory creates wasted warehouse space. Since excess inventory also creates clutter, it is a safety hazard and your employees will lose time searching for the correct product. Industrial Supply Magazine reports that “excess and obsolete inventory is costing the typical distributor 25% a year. If you start the year with $100,000 of obsolete products, that inventory will have cost your business $25,000 due to storage, damage, shrinkage, and the cost of money by year-end.”

In contrast, the cost of paying for more regular, smaller inventory shipments is negligible. When you decrease clutter, you will increase the accuracy of your warehouse operations and create a safer, less cluttered work environment for your staff.

#2. Use a Barcode-Based Labeling System

Attempting to track inventory without the assistance of a cloud-based warehouse management system is both time-consuming and ineffective. By barcoding all of the inventory in your warehouse and uploading it into your inventory management system, however, you will be able to collect and manage inventory data automatically. In fact, Camcode reports that barcoding your inventory is a minimum of 75 percent more efficient than manual data entry. Fortunately, with the right solution provider for barcoding, you can increase the accuracy of your shipment while tracking inventory from any location – making it easier to travel between warehouses. Additionally, working from a cloud-based inventory management system also eases reorders since you can set up notifications or automatic reorders when particular items in your inventory get below a certain level. 

#3. Reduce Travel Time

The time your employees spend traveling within your warehouse can cost you both billable hours and – you guessed it – time. F. Curtis Barry & Company report that as much as 70 percent of a warehouse picker’s workday can be spent walking, so it is important to streamline warehouse operations for your pickers by dividing inventory into categories. The process of grouping similar inventory together – also called “slotting” – reduces travel time and cuts down on opportunities for employee error. Slotting is a common practice in mid to large scale warehouses as it significantly improves operational efficiency. In addition, by considering the size and location of each individual order and planning trips accordingly, your employees will be able to streamline multiple orders into a single trip.

#4. Utilize Vertical Space

According to Multichannel Merchant, “warehouse space often represents 15% to 20% of the cost per order.” As a result, maximizing warehouse space can cut storage costs and eliminate the need for expensive expansions. Instead of building outward, consider optimizing vertical space with one of the following three shelving ideas:

  • Stackable shelf bins offer vertical storage at minimal cost.
  • Industrial shelving is perfect if you need to store such a substantial amount of inventory that you are concerned with how to balance the weight and adhere to safety standards.
  • Mezzanine shelving is a more permanent storage solution. It effectively adds another floor or level to your warehouse operations.

By utilizing vertical shelving in your warehouse, you will be able to expand in the most cost-effective way possible by utilizing all of your existing warehouse space. 

#5. Regularly Evaluate Warehouse Processes

Opportunities to create a better functioning, lean warehouse will continue to emerge as time passes. In a recent report, McKinsey found that warehouse inefficiencies such as storage to picking distance, time-consuming labeling, and movement within a single pick zone lead to surveyed warehouses operating 20 to 50 percent less effectively than they did in their price breakdown analysis. To help avoid these challenges, evaluate your warehouse for efficiency on a regular basis and partner with a data-based solution provider which enables you to access all of your operational data in one place.

Finally, by consistently evaluating your warehouse management processes and regularly reviewing internal data, you will be able to reduce operational costs and refine your warehouse processes to function at maximum efficiency. This efficiency, as a result, will ease your business operations while also strengthening your operational performance. It’s a winning duo you don’t want to overlook.

What are the key benefits a barcode driven inventory system can bring? Find out now in this expert guide.

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About the Author

Nicole Leinbach Reyhle is the Founder and Publisher of Retail Minded, a publication committed to supporting independent retailers through news, education and support, as well as the Co-Founder of the Independent Retailer Conference. Recognized for her expertise in independent retail, Reyhle has published thousands of articles about small business and is the Author of the book “Retail 101: The Guide to Managing and Marketing Your Retail Business” from McGraw-Hill. Additionally, Reyhle has contributed to Forbes, Fiverr, IBM and more, and has been the Spokesperson for Small Business Saturday from American Express since 2014. Learn more about Retail Minded at www.retailminded.com, at @RetailMinded on Twitter or at Facebook.com/RetailMinded.