Running a warehouse is such an important and varied business task that it’s almost like a completely unique aspect of your company. Some of the funniest scenes in the show The Office (the American version) were when characters from the sales team interacted with the warehouse workers.
One of the reasons these scenes were so funny is that they highlighted the different philosophies, missions, methodologies, and cultures represented by warehouse employees and employees from other sectors of a company.
The warehouse is like the guts of the business, the internal system that processes and orients all the raw materials that enter and leave the body. The following tips just scratch the surface of a full warehousing blueprint, but it’s a good starting point for any business owner who may not fully grasp the nature of a company’s warehousing unit.
Tip #1 – Make safety protocols your first priority
Safety is one of the most important aspects of running a warehouse. Operational safety standards must be followed to prevent workplace accidents, which can be life-threatening in some cases. Hazard prevention is why the Occupational Safety and Health Administration (OSHA) requires a certification for employees operating inside warehouses, including OSHA 10 certification for regular workers and OSHA 30 certification for supervisors.
Safety in the workplace requires having detailed emergency response plans and material handling procedures. Failure to adhere to such guidelines can get you fined and if workers are injured on the job, you may be liable for their medical bills or even larger settlements.
Tip #2 – Develop your best practices and goals to guide your warehouse design
In addition to safety protocols and emergency response plans, your warehouse also needs clearly defined best practices. It is critical that you create a repeatable process that will lead to warehouse efficiency. This should include streamlining product handling time, loading schedules, inventory management, and supply chain oversight.
Part of your best practices objective is to increase your ROI. ROI is, of course, the underlying metric in all business operations but it surfaces even in how you store and stock your warehouse. Some consultants use a system called FAST – an acronym for Flow, Accessibility, Space, and Throughput – to determine a customized plan for individual companies to store their products.
Tip #3 – Use a warehouse management system to utilize data
As they say, in the contemporary business ecosystem, Data Is King. No matter what size company you are, it is essential to collect, measure, and analyze data from your company’s processes. Warehouse management data (WMS) can include anything from automated asset tracking data to unique tracking numbers (both movable and fixed assets).
Such data is necessary if you are to do any kind of effective forecasting. Remember, that’s the point of collecting data: to be able to predict your spending and revenue. WMS is also important in organizing the layout of your warehouse and maximizing your distribution centers.
Many warehouses rely on automation these days – but that’s a whole other discussion.
Tip #4 – Organize your units the right way
Stock keeping units (SKU’s) are a way of organizing inventory strategically. One factor to be considered is storing the most high-volume products closer to the shipping area. It’s easy to think that you should store products together based on the manufacturer but the better method is to organize by the highest profit/volume units. Warehouse management is not about aesthetics, it’s about efficiency.
Tip #5 – Use automation if you can…but don’t overextend yourself
Earlier we mentioned automation and how it factors into warehousing. Ultimately, it will depend on your ROI forecasting. How much will automation help you to streamline repeatable tasks that can save you money and maximize your throughput.
Automation is almost a requirement in big companies now. Amazon, for example, has created an almost entirely automated end-to-end supply chain.
However, not all companies can afford this level of automation even if it might eventually give you better ROI. You can’t overextend yourself just for a slight potential edge on nominal profits years from now.
Fortunately, automation is scalable, meaning you can implement automated processes piecemeal into various sectors of your business – including your warehouse – and run tests to see how much it boosts your ROI.
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