“Companies that manage their supply chains effectively tend to see faster revenue growth.”
Deloitte

Welcome to our comprehensive guide on Warehouse Optimization! Imagine stepping into your warehouse to find everything running like clockwork: inventory flows in and out smoothly, every item is stored perfectly in its place, and orders are picked and packed quickly. If this vision seems far from reality, don’t worry!

In this blog, we’ll dive deep into optimizing your warehouse operations to enhance efficiency significantly. From laying out your space to maximizing workflow and mastering the art of inventory management, we’ve got you covered.

Get ready to transform your warehouse into a model of efficiency with our expert tips and strategies.

1. Tips for Optimizing Your Warehouse Layout
2. Optimizing Operations for Picking Efficiently
3. Optimizing Check-In Process for Efficiency

1. Optimize Warehouse Layout

The perfect layout for your warehouse should use every square foot of space, streamline your workflows, and ensure that your staff can perform their duties effectively and safely.

Assess your current efficiency by thoroughly inspecting your warehouse.

Document your observations on accessibility, flow, and the overall organization. Here are some questions to ask yourself:

• How well is the current layout maximizing the available space?
• How easily can staff access the most frequently needed items?
• Are there any potential safety hazards due to the layout?
• Are there frequent bottlenecks or areas of congestion?

Once you’ve observed what is working, and what is not, you can employ these best practices for warehouse layout optimization:

Organize inventory by category or demand

Place high-demand items closer to the packing and shipping areas; this reduces the time your employees spend pulling items, which is a great way to optimize warehouse efficiency!

A great way to do this is by categorizing items, and then organizing them according to category and frequency of use.

Here is a list of categories an event rental company might use for organizing inventory in the warehouse: 

What does your warehouse look like?

The perfect layout for your warehouse is more than just the arrangement of shelves and aisles; it uses every square foot of space, streamlines your workflows, and ensures that your staff can perform their duties effectively and safely. But how do you know if your warehouse layout is living up to its potential? How can you optimize your space so that your processes flow smoothly?

To answer this question, begin by thoroughly inspecting your warehouse. Pay close attention to how space is used, and document your observations on accessibility, flow, and the overall organization. During your walkthrough, take detailed notes of anything you see that should be improved upon. Don’t be afraid to be brutal! This is not about ego or blame, it’s about optimizing warehouse operations! Be objective and fair, and then come up with a plan to increase efficiency.

Once you’ve performed your walkthrough and documented pain points, it’s time to get to business!

Ensure aisles are wide enough to accommodate equipment

Consider the size of your equipment and the typical load to decide the smallest necessary aisle width for safe and efficient navigation. Here are some examples of common equipment used in warehouses, and the clearance needed for efficient navigation: 

This chart is intended as a guideline. For a safe warehouse layout, always consider the requirements of your operation, including the size of loads, height of storage systems, and how much space it takes to turn your equipment. Additionally, make sure that there is enough room for workers to work safely around your machinery. 

Make Storage Easy-to-Access for Warehouse Optimization

When you receive new inventory, what do you do with it? It is essential to have a clear system for inspecting, sorting, and documenting received inventory.

Here is an example of what that process might look like: 

1. Once items are off the truck, inspect them for damage and defects. This ensures all your items meet your business’s quality standards before you store them. 
2. After inspection, sort the items into categories. They should be sorted based on category type and labeled if needed.
3. Document your new inventory levels in your Inventory Management System. This typically involves recording the item’s name, description, quantity, condition, and any serial numbers or unique identifiers. 
4. Move items to their designated storage area. Once items are accounted for, the final step is to move them to their storage area and organize them so that they are easily accessible. 

Transitioning to Technology

Many rental companies find manual inventory management challenging, especially those with large inventories. Modern technology offers robust solutions, automating the tracking and updating of inventory, which significantly reduces errors and improves warehouse efficiency.

Benefits of Integrating Techonology:

• Accuracy: Automated systems reduce human errors in data entry and inventory tracking.
• Efficiency: Technology speeds up all aspects of inventory management, from updating stock levels to retrieving items for orders.
• Cost-Effective: While the initial setup might be costly, the long-term savings in time and reduced errors provide a substantial return on investment.

When adopting new technology, consider your specific needs and the scale of your operations. Start with a system that integrates seamlessly with your existing workflows, and provide thorough training to ensure all staff are proficient in using the new tools.

Want to more tips on inventory management? Check out our article, “Best Practices for Rental Inventory Management“!

2. Improving Operations for Warehouse Optimization

Optimizing the picking process is crucial for enhancing warehouse efficiency, reducing errors, and increasing customer satisfaction. Identifying gaps in how your team picks and fulfills orders can lead to significant improvements.

Here are some tips on how you can increase efficiency in this department: 

 Use Virtual Picklists

Traditional pen-and-paper methods for pulling orders are becoming outdated. Here’s why:

• Mistakes Happen More Often: Manual entry is prone to errors, such as misreading handwriting or accidentally skipping items.
• Updates Aren’t Shared Quickly: Changes like stock adjustments aren’t updated in real-time, leading to confusion and delays.
• Slows Down Work: Paper-based methods hinder quick communication and require additional time for data entry.

Now, rental management systems offer virtual picklists. These are digital versions of the traditional picklist, and they allow users to quickly check inventory in and out on computers, tablets, and even smartphones.

By ditching paper, you eliminate the risk of someone holding onto an outdated copy. Updates made at the last minute are reflected instantly, and everyone always has access to the most current version of the picklist.

Best Features for Warehouse Optimization

If you don’t already have a rental management system, or you’re curious about how your current one could be more effective, look for these features: 

• Real-time Updates: As your teams pick items or inventory levels change, your inventory should automatically reflect these adjustments, ensuring accuracy and minimizing the risk of errors or duplicates. 
• Cloud-Based: Look for software that allows you to look at your lists on any device, anywhere. Whether you’re in the warehouse or elsewhere, you should always know what your teams need to pick. 
• Master View: For maximum efficiency, look for software that has a master view of all picklists over a specified period. Your teams should be able to pull up a single page, and quickly update multiple orders at once. This is especially useful when you are using the batch-picking approach! 

While there are several software options available, TapGoods offers a comprehensive solution that starts $19 per month. It’s designed to meet the needs of both small and large businesses, making it a worthy consideration for those looking to optimize their warehouse operations.

Create a Process for Picking

Processes are a huge part of optimizing warehouse operations for efficiency. Begin with assessing the specific needs of your warehouse, including your order volume, variety of inventory, and staffing. Depending on your needs, there are a few methods you can use for picking inventory: 

To maximize your warehouse efficiency, we recommend using a combination of the above methods! Analyze your order profiles to figure out common patterns. For example, you might find that some items are often ordered together, or that some days or seasons have a higher volume of orders. 

Consider organizing your warehouse according to demand to make life easier for your pickers! Group high-demand items closer to the packing area, and low-demand items further away. This will make accessing your most often picked items easier for team members.  

If you have a smaller warehouse or a less diverse inventory, assigning workers to zones may not be necessary. However, in larger warehouses with a diverse inventory, we recommend assigning workers to specific zones and having them familiarize themselves with that section. When you do this, you spend less time looking for items!  

If you tend to get smaller orders with similar inventory, batch picking is always the way to go. When multiple orders have similar items, batch picking can significantly reduce the number of trips needed to pick these items. After the inventory has been retrieved, it can be sorted and sent on its way! 

There isn’t a one-size-fits-all solution, so try out each of these methods, and decide what works best for YOUR team.  

3. Optimizing your Check-In Process for Warehouse Efficiency

Once you have set up your layout, squared away inventory management, and established picking protocols, it’s time to address what happens after an order is completed. One of the best ways to throw your warehouse operations completely out of wack is to neglect checking-in procedures.  

If you don’t have a check-in procedure, you can expect to encounter the following challenges: 

• Increased loss/damage: Without a system in place to inspect items as they return, damage or loss can go unnoticed until it’s too late. This could lead to higher replacement costs and potential disputes with customers over accountability. 
• Inaccurate inventory levels: Without correct check-ins, the inventory levels in the management system may not reflect what’s available. This can lead to overbooking or unfulfilled orders, frustrating customers and teams that are picking orders. 
• Decreased Productivity: A lack of procedure can result in inefficient use of staff time, as workers may spend unnecessary time trying to sort, inspect, and store items without clear guidelines.  

All of these issues can ultimately lead to frustrated teams, customers, and significant loss of revenue over time. It is important to take a proactive approach to prevent these issues from arising. So, if you’re optimizing warehouse operations, check out our step-by-step approach!

A Proactive Approach to Checking In (Step-by –Step)

1. Preparation

Set up a dedicated area in your warehouse for orders that are ready to be checked in. In this space, make sure that all tools (such as barcode scanners) are available and easy to access. Assign team members to each step of the check-in process, so that each step is performed thoroughly and accurately.  

Here are some examples of roles you may give team members during the check-in process: 

2. Notification

Use your system to keep track of when orders are expected to return to the warehouse and notify your team members accordingly. Make sure that all communication surrounding the return of orders is clear and easy to understand.  

3. Inspection

Have a team member conduct a thorough inspection of each returned item. Any damage or missing parts should be documented, and the next steps for damaged items should be known and documented. 

Any identified damage or wear and tear from the inspection phase should be addressed promptly. This could involve simple fixes, part replacements, or calling in a specialized technician for more complex repairs.  

Cleaning & Maintenance

Always assign a team member to handle the routine cleaning and maintenance of items upon their return. This is a crucial step that ensures that inventory is always in top condition for the next customer.  

Depending on the type of item, the cleaning process can range from simple wiping down to more complex procedures requiring specialized cleaning agents or equipment. For example, party equipment like tables and chairs may just need a wipe, while items like tents might need a deep cleaning to remove dirt and grime. Sanitization is also a critical step, especially for items that come into direct contact with users, like catering equipment or costumes.  

After cleaning and any necessary maintenance, your teams should conduct a final quality check to ensure that the item meets the company’s standards for the next rental.  

5. Updating Inventory

Once items are cleaned, repaired, and ready, update their status in your inventory management system. When you’re optimizing warehouse efficiency, you should always wait until all earlier steps are complete before you update inventory logs. This helps avoid any mistakes in the check-in process.  

If you do not wait for items to be ready, then you run the risk of inaccurately updating your inventory count, which can result in overbookings or loss of inventory. So be patient! By ensuring items are fully ready before they are listed as available, you avoid the need for last-minute checks or corrections.  

6. Put Inventory Away

Once all earlier steps have been completed, it is time to put the inventory away. Always make sure that your teams return inventory its designated area of the warehouse and is easy to access for later orders. This organization increases efficiency by ensuring that team members do not spend tons of time looking for inventory. 

Continue Optimizing Warehouse Operations to Figure Out What Works for YOU!

Remember, you should continuously review and adjust processes as conditions change. Your business may grow, your team sizes will fluctuate, or you may move locations. Check in with your teams regularly to see what’s working and what’s not, and don’t be afraid to try something new!  

Other blogs you may find helpful: 

Best Practices for Pricing Rental Inventory with a Calculator 

5 Reports that Rental Businesses NEED to Review Frequently 

The Importance of Equipment and Party Rental Contracts in 2023