7 Effective Ways to Optimize Your Warehouse Processing
Today warehousing became the most important part of every business either it’s small, mid or a very big. Having a warehouse in big cities costs you very much in terms of skyrocket property prices and a messy warehouse may damage your business and profit as well. As per Forbes report, Amazon ships 2.5 billion packages a year, to do so, you need a professional and proper design of your warehouse and adequate inventory management will give you peace of mind along with cost cut, ultimately it will turn your balance sheet in the green zone.
Today, I will discuss each warehouse process in order to understand and effectively optimize your operations. After each process is explained, general recommendations to optimize each one will be discussed, and in-depth optimization resources will be linked for your convenience.
7 Effective Ways to Optimize Your Warehouse Processes
1. Receiving in Warehouse
Receiving is the first warehouse process and one of the most crucial. To perform the receiving process properly, the warehouse should be able to verify that it has received the right product, in the right quantity, in the right condition, and at the right time. Failing to do so will have consequent impacts on all subsequent operations.
The act of handling products into a warehouse and onto a system. Receipts may be for single products, objects, liters, cartons, packets, crates, kilograms, or full pallets. Items may be large such as pallets, or as small as a split pin. The best way to receive products is via an Advance Shipping Notice (ASN) from a supplier. With this information on the system, operators can scan consignment bar codes to bring up the ASN. If the delivery matches the ASN, then goods can be system-received. But at this point, they are still at staging, albeit ready for put-away. Some systems allow for goods to be received into inventory at this point, whereas others require the goods to be delivered to a specific stock location before inventory is updated. This depends entirely on the customer requirements and how the system is set up.
Receiving also involves the transfer of responsibility for the goods to the warehouse.This places accountability on the warehouse for maintaining the condition of the goods until they are shipped. Properly receiving cargo will allow you to filter out damaged goods and avoid liability for them.
How to Optimize:
The aim of optimizing the warehouse receiving process is to receive cargo efficiently and correctly and to avoid accumulation at the receiving docks. Solutions such as power pallet trucks and conveyors will allow you to unload cargo and clear dock areas faster and more efficiently. In addition, dimensioners automate the capture of weight and dimensions of parcels and pallets to accelerate your receiving processing and obtain certified measurements. Finally, software such as labor management systems and dock schedulers allow you to properly allocate the right amount of personnel by accurately anticipating upcoming shipments.
Top techniques to optimize your warehouses receiving process in order to make it as smooth and error-free as possible, so that your customers are never without product.
- Compile the Correct Metrics
- Labor and Booking
- Shipment Identification
- Product Count
- Product Inspection
- Receiving Documentation
- Label Correctly
- Error-Ready Replenishment Process
- Be Thorough with the Inspection
Lesson: Organize ASN on your system for automatic receiving and put-away. Ideally, use RF equipment for scanning and updating your management systems.
A good system will prompt put-away staff with a note indicating that stock is in staging waiting to be transported to a storage location. The process commences when operators accept the put-away task from the Enterprise Resource Program(ERP) or Warehouse Management System (WMS), and then scanning the relevant bar code of goods to be put away. If there is no bar code, then a manual entry can confirm that the goods have been identified. At this point, the system will be directing the put-away staff to deliver goods to the relevant storage location.Once at the location, the operator will either scan the relevant stock location bar code or manually confirm that the correct location has been found, then place the goods into the slot before confirming that the put-away process is complete.
When goods are put away properly, there are several benefits
- Cargo is stored faster and more efficiently.
- Travel time is minimized.
- The safety of goods and employees is ensured.
- Warehouse space utilization is maximized.
- Cargo is easier and faster to find, track, and retrieve
How to Optimize:
The aim of optimizing the put-away process is to move goods for storage to their most optimal location in a fast, efficient, and effective manner. Software such as slotting and space management systems automatically assign optimal spaces for each cargo to allow for a streamlined put away process and maximized space utilization.In addition, put away mobile applications and devices direct clerks to store cargo in the right location.
Lesson: Use a system that can direct put-away to vacant slots according to the demand of the goods.
Storage is another important part of the warehouse process in which goods are placed into their most appropriate storage space. When done properly, the storage process fully maximizes the available space in your warehouse and increases labor efficiency.
How to Optimize:
Optimizing your storage process is only possible when the right KPIs are properly tracked. Having software that automatically calculates your warehouse storage utilization and tracks the right storage KPIs will allow you to determine how efficient each aspect of your storage process is. Slotting optimization system scan also help you by assisting with the allocation of the best storage location for a given cargo. Lastly, utilizing the right warehouse storage system according to the size of your facility and product mix allows you to maximize your horizontal and vertical spaces while improving warehouse efficiency.
Lesson: An effective storage is the most important key factor of your warehousing and it also reflects on your warehousing costing, so always follow the best practices for adequate and proper storage inside your warehouse.
There are two main types of picking.
Primary: This is the first picking of goods. In some cases, the first picking is delivered directly to a staging area or packing bench for finalization, consigning, and dispatching, thus the first picking becomes the last picking.
Secondary: This is a second picking process. Some primary picks are subject to a second picking process, particularly where picked goods must be allocated to clustered orders (a bunch of orders), or discrete orders (single orders) via a sortation process or system. With the boom in online sales across many industries, far more companies are conducting secondary picking processes than ever before.
Once orders are received, it is common for orders to be released ‘real-time’ or in waves’. Real-time orders are downloaded as they are received. Orders accumulated for specific picking times and transport routes are called ‘waves’.
Waves can be released at the discretion of the DC manager according to criteria that they determine. As alluded to above, picking may be discrete, i.e. one order at a time, clustered, i.e. multiple orders at a time, or batched, i.e. picking all the goods at once to sort to specific customer orders.
Often, companies may use all three types of picking. With increasing online orders, companies are increasingly installing picking apparatus such as put walls,put-to-light systems, goods-to-person systems, and cross-belt sortation systems, to cope with the larger volume of small orders.
What about the accuracy of picking? This is one of the most common questions asked by warehouse managers. Should you scan the product or location, or both during picking?
This depends largely on the degree of accuracy required. If both are scanned accuracy increases, but picking velocity will be lower compared to simply scanning the location. Where voice systems are used, no scanning will be used, but check digits at the location services to ensure the operator is at the correct location. Voice picking obviates the need to scan at all, but with a touch of risk. The risk lies in the operator achieving the right count, upon picking, without making a mistake.
While companies worry about the accuracy issue, evidence suggests that voice picking and/or scanning the location only, gives a surprisingly high level of accuracy, without impeding picking velocity. For ‘accuracy intensive’ warehouses, accuracy can be enhanced by a statistical example of QA checks, normally around 10 to 20% of orders.
How to Optimize:
One of the ways to optimize the picking process is by introducing the right technologies. Technologies such as mobile and wearables can streamline the picking process because they allow clerks to view picking lists wirelessly, access systems in real-time, and scan anywhere in the warehouse. Other viable options include conducting an ABC analysis to improve your warehouse layout, selecting the right picking methodology, and utilizing software to guide clerks in properly executing the picking process.
Lesson: Picking uses a large number of resources, and can reflect around 60% or more of warehouse staff. Smart picking systems and WMS are a must for increasingly complex businesses
There are scores of ways that goods are packed within distribution centers. Rather than delve into the specific details of packing processes, it suffices to follow five rules for successful packing:
- Goods picked must be traceable in terms of location from which they are picked, plus relevant ‘use-by’ dates and/or ‘batch’ dates and codes.
- Accuracy and QA checks must be built into the process.
- Goods picking from different zones within the warehouse must be easily‘combined’ and system-managed to ensure order completeness.
- Goods must be packed according to their size, quantity, temperature, toxicity, value, fragility, hygiene, and legislative requirements.
- Consignments must always be system-traceable to documents and/or invoice numbers for future traceability.
How to Optimize:
Optimizing the packing process can be done by utilizing software to guide people in executing the tasks. Provided that a packing system has all the necessary data,
such as dimensions and weight, the system can automatically determine the type and amount of packaging material that will keep the item safe and packing cost slow.
Lesson: Packing is an extension of the picking process and must be system-managed and treated with care to ensure that orders are complete and accurate.
The successful art of dispatch lies in the operation’s ability to have goods ready for departure, just in time for carriers to load their trucks. The DC manager must, therefore, balance and forecast packing and dispatching according to carrier pick-up times. Goods that are ready too early, for example, will clutter staging areas, while dispatches that are late, will delay loading and potentially cause late deliveries.
As indicated earlier, many firms resort to using their systems to release orders, for picking and packing in waves, aligned to specific delivery routes or carrier types.
How to Optimize:
To optimize the shipping process, having software systems to streamline many of the tasks is critical. Labor management systems let you allocate the right amount of resources to prevent over or under allocation. Having a shipping mobile application and device lets you have the right information on hand and in real time to verify shipments on the fly. And loading systems can let you have guides that clearly instruct how to load cargo safely and efficiently.
Lesson: Avoid jambs and late deliveries by scheduling picking waves to align with carrier picking up times.
This is something most companies wish will just disappear! However, returns are an intricate part of most businesses, and alas, the volume of returns is growing for many organizations – mainly due to the e-commerce revolution. Alarmingly, much of the returns for many firms is for just one item at a time.
The complexity around handling returns mandates the following rules:
- When customers return goods, they should seek, and be given Return Management Authorisation, which outlines what is being returned and why.
- All returns must be traceable, to their order, document and invoice.
- Companies must have a pre-determined returns process that delineates what is to bed one with the goods once received back into the warehouse, e.g. return to stock, repair, destroy, discard, recycle, return to the manufacturer, etc.
- All credits must be system-recorded together with reasons why the goods are returned.
- Inventory must be updated where goods are returned to stock, or held for further action.
How to Optimize:
- Dedicate an Area for Returns: The first step when optimizing your reverse logistics process is to have an area dedicated to storing returned items. Once you have a specialized area for returns, it’s important to sort them by category. You can use the three-bin system – restock, discard, and return to supplier – to keep your stocks organized and ensure that each item is routed to its appropriate destination.
- Determine Your KPIs to Evaluate Your Performance: A key performance indicator (KPI) is a tool to help you measure the success of your warehouse optimization initiatives. The following KPIs will allow you to closely monitor your reverse logistics process and determine how to achieve a cost-effective operation. 1: Return Rate, 2: Cost Per Return or Exchange, 3: No fault found rate, 4: Total Cost of Repairer Refurbishment, 5: Scrap rate
- Establish Strict Policy For Returns: Customer returns are almost inevitable, but strict return policy not only indicates confidence in the supplier but also helps reduce the number of returns in warehouses. It also increases the likelihood of the item reaching the warehouse in good condition.
- Advance Warehouse Technology: Technology is a key component when optimizing warehouse processes. And when it comes to the reverse logistics process, the use of warehouse mobility solutions and wearables might be the most appropriate solution.
Lesson: The reverse logistics process presents a constant challenge for the warehouse industry, but it also creates a great opportunity to obtain a competitive advantage.
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