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8 Tragically Common Mistakes in Warehouse Setup

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Efficiency in warehouse operations and logistics is an obvious way to curtail costs and improve overall customer experience. But some warehouse operations are doomed from the start: No matter how many efficiencies and innovations are introduced, they suffer from flaws stemming from common—yet easily avoidable—mistakes in warehouse setup.

Avoiding these mistakes does not require huge capital outlay or sophisticated technology. Nor does it necessitate complicated procedures—it isn’t rocket science. But, like most mistakes, avoiding them does require the presence of mind to spot them and make appropriate adjustments. Here, then, are some of the things you should be on the lookout for:

Mistake #1: Shipping and receiving areas overlap, or are on the same dock

As a general rule of thumb, matching locations to functions helps a warehouse operate much more efficiently. Failure to do so causes improper work flows. Having the same area, or even the same dock, serve both shipping and receiving leads to inefficiencies and mistakes.

For example, outgoing orders can be confused with incoming orders and accidentally get reshelved. Shipping and receiving trucks can bottleneck at your dock. People can become bottlenecked at computer terminals. The list goes on.

Mistake #2: The receiving area is too small

Even if shipping and receiving are separate, receiving areas often face a “space crunch,” which leads to inaccuracies. Receiving is a fundamentally critical function in a warehouse, because errors and problems there will cascade throughout the warehouse, creating a host of other inefficiencies. Those further inefficiencies erode profits.

Make sure your receiving area has adequate space, not only for holding inventory, but for performing quality control and labeling, breaking down larger pallets, staging items that might need to be returned or inspected further, and other receiving activities.

Mistake #3: Picking paths are not optimized

Efficient picking paths will lead to more efficient picking—that is, more time preparing orders and less time moving about the warehouse. On the other hand, if picking paths are not optimized, it can lead to excessive travel times, which culminate in slower turnaround times and unnecessary labor costs.

To avoid those costs, think about optimizing layout in terms of picking paths:

  • Items that are often purchased together should be stored near each other.
  • Orders should be fulfilled in such a way that individual items in one area are picked before moving to the next area.
  • Picking order should be linear, with warehouse employees completing their picking run at a location close to the final shipping area.

Mistake #4: No forward locations are set up or used

Another way to optimize picking is by using forward locations. Forward locations can be a huge time saver, especially with more popular or high-volume items. The idea is to minimize trips to more remote locations in the warehouse at the same time that you minimize the distance a picker has to travel to get an item.

Forward staging just means having a set amount of stock in forward locations close to where packing and shipping will occur. When an order for one of these items comes in, an employee can choose items from the forward location quickly. As the quantities in the forward location get low, replenishment stock from elsewhere in the warehouse (or from a less expensive off-site location) can then be brought forward.

Mistake #5: No plan for future growth or change

The mistake here is fairly understandable: Business owners want to optimize their warehouse space, because, more than likely, they are leasing space by the square foot. (Even if a company owns a warehouse outright, it is paying for things like insurance, climate control, and so on.) No one wants to pay for unused space unless they have a guarantee of carrying more stock in the future.

Still, many organizations fail to plan at all for future expansion and contraction. A good plan should anticipate shifts in market demand (including seasonal changes), inventory, and process changes at least five to 10 years out. It should also outline contingencies for dealing with these changes; for example, when and how to incrementally add pallet racks, how to manage overstock space, when to ship to a remote long-term storage location, and so on.

Mistake #6: No separate areas for dead stock, returns, etc.

Most organizations do not have a “dead stock management plan,” but they should. There are many reasons why items might need to be stored but are not ready and available for shipment: product recalls, customer returns, items that are no longer carried and destined to be sold in bulk at a discount, and so on.

These are typical situations; the problem comes when this “dead stock” is nestled among the regular inventory. At best, it gets ignored and just continues to build, taking up valuable warehouse space. At worst, pickers mistake it for live stock and reship items. Best to set this dead stock aside, making it noticeable at a glance.

Mistake #7: Lack of easily recognizable signage and shelf labels

Dead stock is not the only thing that should be easily recognizable in an instant. All of your inventory areas should be clearly labeled. This needs to go beyond mere barcodes for items (although barcodes are a good thing). Your employees should be able to visually distinguish different areas and items as well. For example, use large signs for different sections of your warehouse, and use color-coded areas for the different subsections.

Mistake #8: Treating Technology as a Toy, Not a Tool

We know our readers are smart. We know they can see through your typical plug for a software solution. And they know that infoplus provides such a solution.

We have seen warehouse managers and fulfillment centers invest in technology solutions, only to have those solutions become “the” focus of their activities. What gets left by the wayside are the human aspects of warehouse management: planning, layout, signage, communication, and so on. Technology should be a tool for quickly and easily optimizing one’s layout and operations, not an end-goal in itself.

In other words, the right technology solution should be almost invisible, working in the background to achieve peak efficiency, and drawing attention only to events that are outside of optimal operating parameters (i.e., exceptions). This is the philosophy behind all well-designed and effective warehouse technologies.

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