It is the season for New Year Resolutions! Optimizing your warehouse is one way to enhance customer service and add dollars to the bottom line. First, let’s review some things that can be done without any capital investment. Second, we will look at areas where an investment may increase efficiency and productivity, returning a significant savings in the future. Third, we’ll review and identify personnel opportunities that will optimize areas. 

Review your Design
Ask yourself these questions:
• Has your operation changed since you first designed the receiving area? 
• Is there a more efficient way to lay out that area to eliminate walk time and touch time?
• Do you receive in stages? 
• Would it make more sense to receive and putaway in one move? 
• Is there paper in this area, and what are you using it for? 
• Are you adding license plates to pallets; if so, how many? 
• Are you checking for count, quality, etc for all vendors or just a few, and can this be streamlined? 
• Are you keeping a vendor scorecard so you can reconcile problems that continue to happen over and over again?

Putaway is the next logical step. Are you putting the product away to a reserve storage location only to have someone else move it the same day to an active pick zone? What is your putaway logic, first available slot, family group, picking area? If you change your putaway logic, will it make your travel time less and increase your replenishment efficiency?

Replenishment to Active Pick Zone. This is an area that is oftentimes overlooked but can have a big payback. Review how many times you replenish an active pick zone a day or week. Can a change in the size of the location in the active pick zone reduce replenishments and keep the order filler from waiting on product? If your replenishment personnel are replenishing a pick module with carton flow rack, a good habit to enforce is pushing the product forward. Too many times the order filler has to stop picking and reach back in the rack to get the new product that is stuck at the end or mid-way. If you have a lot of “grabber poles” for the order fillers, that will prove there is opportunity in this area. The idea is to keep the order fillers picking and not fixing other problems. Do the rails in the rack need realignment or have they popped out of their station, does it flow and the dividers are working?

How is your warehouse slotted? Slotting is the next huge opportunity. Have you optimized your warehouse space utilization, or is there honeycombing (empty spaces in the middle) happening in the storage area? The design you currently have may have been perfect initially but business process change has now reduced its efficiency. A good idea is to re-look at the warehouse as if you are just starting it up and see if you would lay it out in the same way. In the active pick area, re-slotting the area can many times increase order picking efficiency by 15-20%. Areas that are overlooked are: heavy items on top, family groups of items that are picked together, size of the location appropriate to velocity of item. Fast movers should be in the golden zone to reduce bending and reaching for the order fillers. 

Value Added Services In some warehouses, this area is set up in stations and ergonomically has some opportunities. Watch the person performing the task and see how much bending, twisting and turning is being done. Are they sitting? Usually, sitting is not the most efficient solution. Can the station be organized in order to have ample supplies for a day’s work so the packing person doesn’t have to refill the station daily? If you have more than one shift, is the next shift being set up for success so that the people working that station are productive as soon as they come to work? Setting the next shift up for success in every functional area of the warehouse is a good idea because usually the workers stop being productive at least a half hour before quitting time. You can take advantage of that non-productive time by at least eliminating or reducing the amount of time the next shift has to spend getting ready to do the work. Review the amount of time each area takes to actually get started to work on the shift. Sometimes it can be 45 minutes or more before they gather all their tools to perform the work for the shift.

Order picking is an area usually with big opportunities in optimization. One easy way to identify your opportunities is to benchmark your picking rates. Are you on the upper level of piece picking? Case picking? Pallet Picking? If not, you have opportunities to optimize. If you are still picking with a paper pick list, look at it. Is it easy to discern the quantity or is it in a 6pt font? 

How about the location? If you are using a RF gun, how many scans do you require? Is this the most efficient method? If you are using pick to light order picking, your order filler has the opportunity to be very efficient, so remove any barriers to that efficiency. For instance, box or tote availability, packing materials, opening the box in the rack (consider moving this task to the replenishment person), pack size errors, etc. 

The packaging and shipping area usually has opportunities for an ergonomically redesign. Keep the packers doing their jobs and not running all over the place looking for boxes, tape, box cutter, etc. Review the design and packaging material. Is it still the best solution for your business? 

WMS Are you using a warehouse management system? Software has the potential to increase your productivity and throughput sometimes up to 50% or more. Technology has advanced so much in the last few years that there are many good systems out there that will meet your needs. Some have better widgets than others, but if you are looking to select a new system, a good idea is to equate a new widget with a return on investment. Don’t forget about visibility tools because these can help your operation go from a reactive organization to a proactive organization. Investigate your options thoroughly and don’t always believe what the salesperson tells you. 

If you already have a WMS and it is more than five years old, you may want to review what the new upgrades will add to your operation as far as return on investment. You may also have an opportunity for training. The odds are there has been some turnover since the system was initially implemented and the domain experts have left the company. Usually when this happens, all the knowledge about what the system can actually do has not been exchanged; therefore, companies could be using only 30% of the available functionality. 

Order Management- This is another opportunity for optimization. When are orders being released? Is the customer service department holding them and releasing them in one lump sum, or are you getting them as they are processed and then batching? This area is another hidden gem!

People-Saved the best for last! Your people are your most valuable asset and can help you get optimized and organized. The New Year is an opportunity to evaluate your team and come up with motivation plans, passion building plans and succession plans for a super star team. It may be a good time to upgrade some key folks or to coach them to success. Examine your turnover rate; if it is high that could mean your team is lacking some leadership skills or that your people need the focus. Reducing the amount of turnover will eliminate a lot of headaches and is a key factor in increasing optimization. Focus on your team by functional area and challenge your leaders to get incremental increases in throughput or productivity. Be creative on motivation techniques. Career Systems International did a study and the top five reasons people stay at companies had nothing to do with compensation.

Susan Rider is Owner, Rider & Associates and Logistics and Supply Chain Consultant. for more information.