We’ve noticed a marked increase in demand here at the Logistics Bureau for assistance in boosting warehouse performance.
We outline some of the main issues we’re addressing in warehouse management. Additionally, we provide straightforward warehouse solutions and highlight symptoms of poor warehouse performance to be mindful of.
Feel free to watch the video below for actionable steps to elevate your warehouse performance.
Analyzing Warehouse Performance Challenges
Over the past couple of years, we’ve tackled numerous warehouse performance issues. Today, I’ll delve into the causes, symptoms, and solutions we’ve been implementing.
Before getting into specifics, I think it’s worth acknowledging something that doesn’t get said enough: most warehouse problems aren’t actually warehouse problems. They’re symptoms of decisions made elsewhere in the business, whether that’s procurement buying in quantities that don’t suit your storage setup, or sales promising delivery windows that put impossible pressure on your pick and pack operation.
I’ve walked into facilities where the warehouse manager is tearing their hair out, and honestly, they’re doing a remarkable job given the constraints they’re working within. The real issue is often upstream or downstream, and the warehouse is just where everything collides.
Identifying the Issues
Space Constraints
Many clients approach us with concerns about running out of warehouse space. I recently saw one of the fullest warehouses ever, surpassing even a record in Malaysia at 115% capacity. Operating near full capacity, typically 85-95%, restricts operational efficiency due to reduced maneuverability and space for essential warehouse processes.
The thing is, running out of space rarely happens overnight. It creeps up on you. A new product line here, a supplier lead time issue there that forces you to hold more buffer stock. Before you know it, pallets are stacked in the receiving area and your team is playing Tetris just to get through the day.
Performance Concerns
Accuracy in picking and inventory management remains critical. Issues like slow-moving or obsolete stock (slobex) can significantly impact operational efficiency. Effective inventory management, including timely removal of slow-moving items, is crucial for maintaining optimal warehouse operations.
I’ve seen warehouses where a full third of the cubic capacity is taken up by stock that hasn’t moved in eighteen months. Nobody wants to write it off because it sits on the balance sheet as an asset. Meanwhile, the fast movers are crammed into whatever space is left, and pick rates suffer accordingly.
Rising Costs
Increasing operational costs are another common concern. Changes in order profiles or product lines can unexpectedly inflate expenses, making it essential to regularly review and optimize warehouse operations to control costs.
What catches a lot of businesses off guard is the shift in order profiles. Ten years ago, you might have been shipping cases and pallets. Now it’s eaches and units, sometimes hundreds of small orders per day instead of dozens of large ones. Your cost per order can quietly triple if your processes haven’t evolved to match.
Proposing Solutions
Optimizing Layout
Simple adjustments in warehouse layout can yield significant improvements. For instance, narrowing aisles to accommodate more storage without expanding the warehouse footprint has helped clients increase capacity by up to 30% in some cases.
Look, not every solution needs to be expensive or complicated. I worked with a distributor last year who was convinced they needed a new facility. We spent half a day walking the floor and noticed they had receiving at one end, dispatch at the other, and their fastest movers stored roughly in the middle. Just reorganising the slotting based on velocity data freed up enough capacity to defer that building project by at least three years.
Refining Processes
Streamlining processes such as adopting goods-to-person systems and conducting ABC inventory analyses can enhance efficiency and reduce costs over time. It’s essential to evaluate technology investments carefully to ensure they provide a solid return on investment.
A word of caution here: technology is brilliant when it solves the right problem. But I’ve seen plenty of businesses invest in automation or warehouse management systems without first sorting out their underlying process issues. You end up automating a mess, which just gives you an expensive, faster mess.
Implementing Slotting Strategies
Utilizing slotting techniques to organize storage effectively can minimize picker travel distances, significantly boosting productivity. Strategic placement of frequently accessed items near dispatch areas can streamline operations.
Recognizing Symptoms
Performance Metrics
Watch for declining picking rates, cluttered aisles indicating space constraints, or delays in stock put-away. These are signs that improvements in warehouse operations are needed to maintain efficiency and control costs.
There are other warning signs worth paying attention to as well. If your team is regularly working overtime just to keep up, or if customer complaints about wrong items or late deliveries are trending upward, those are red flags. Same goes for inventory accuracy, if your system says you have stock but the shelf is empty, that’s a symptom of deeper problems in your receiving or cycle counting processes.
The tricky part is that many of these issues compound each other. Poor slotting leads to longer pick paths. Longer pick paths mean more fatigue and more errors. More errors create returns and rework. And suddenly your cost per order has ballooned in ways that are hard to trace back to a single cause.
Getting Started
If any of this sounds familiar, the first step doesn’t need to be a major consulting engagement or capital investment. Start by walking your warehouse floor with fresh eyes. Talk to your team, the people doing the picking and packing every day. They usually know exactly what’s slowing them down, they just haven’t been asked.
