What are the factors influencing warehouse process optimization? (Part 2)

Published by Ngoc Tran on

Figure 1. Warehouse process optimization (Westgate, 2020)

Warehouse operations consist of a whole chain of processes: receiving, storing, picking, consolidating, packing and shipping. Therefore, various factors that could improve or worsen the performance of a warehouse. Warehouse design layout, order-picking routes, and storing policies are the first three crucial aspects that we discussed in the previous post. Today I’d like to give you a full picture by explaining the other factors to be taken into account when optimizing warehouse processes.

#4: Data input/output & digital systems

It can easily be seen that the data of several warehouses is fed by multiple distinct sources, which cause errors in master data, duplication, and high complexity in data management. Besides, software and systems are often not adequately organized. Therefore, it’s worth investigating a suitable Warehouse Management System (WMS) while identifying necessary data and data management techniques. Regarding WMS, a wide variety of software is available, namely Material Requirement Planning (MRP), System Applications and Products (SAP), Oracle, and Enterprise Resource Planning (ERP). Companies can also opt to develop in-house systems. For both options, it’s crucial to consider how to create an interface connecting with other internal and external systems.

In addition, a list of required data for warehouse management and warehouse performance to be fed into WMS, such as (1) stock-keeping units (SKUs), (2) inventory level, (3) demand/sales data, (4) locations of resources/bins/crates, etc., (5) inbound & outbound shipment data, (6) resources (e.g., pickers, unload teams, keyman, etc.), (7) order-picking time and travel speed per area, (8) unload time, (9) replenishment data, (10) routing, and (11) work schedule. These input data help you easier to measure warehouse performance, for example, current versus target warehouse processing lead time, which eventually contributes to optimizing warehouse processes.

Finally, it is highly important to organize data. It can be often seen that data consolidated throughout many years slows down or even crashes the system due to overcapacity. One of the simplest solutions is to save old data to an archive database annually. Besides, organizations should clean data, simplify data management process, and standardize and automate repetitive processes. Last but not least, apply the 3-2-1 methodology: Store 3 copies of your data, Use 2 types of storage methods with 1 of them stored offsite.

 #5: Employee satisfaction

Despite the application of robotics and warehouse automation, human employees still play an important role in warehouse process optimization. Thus, learning to enhance warehouse employee satisfaction is also essential. There are two common factors affecting a warehouseman’s efficiency, safety and health: perceptual, and physical. The perceptual factor is defined as the perception of a warehouse worker about his work. Imagine an updated IT system can be too complex to learn in a short time, which negatively influence the comfort of work. The physical factor is related to an activity that directly affects an employee’s physicality. For example, backpain of unloading worker results from constantly lifting boxes up and down. Some innovative solutions that increases employee productivity, as well as ergonomics, are pick by voice system, scanner, and smart glasses. Or simply try to organize teambuilding activities, ensure workplace safety policies, and simplify workflows. Furthermore, you can refer to The 8 Waste in Lean methodology, in order to find out the bottlenecks and creatively come up with suitable approaches to your situations.

#6: Product characteristics

Imagine: What kind of products do you expect to be stored in your warehouse? There are so many different kinds of products that require different storage conditions and locations. Steel plates, thin tubes, bolts and tires are distinct from each other in shape, size and materials. Products like chemicals require protection from moisture, light, temperature and contamination. There are products in variable volumes. Some can be more expensive (product value) or heavier (product weight) than others. Dangerous goods need to be stored separately from other goods to avoid fire or accidents. Stocks that need to be scrapped or reworked shall be placed in a way that are easy for the rework and away from normal wares. Products are also categorized as fast-moving, average-moving and slow-moving. Apart from commercial stocks, warehouses possess handling stocks, such as pallets, crates, barrels, boxes, clip-lok, containers, etc. How would you place these items in order to optimize warehouse processes?

To sum up, several factors have an effect on warehouse optimization processes. All make the whole warehouse processes much more complicated, especially in the current dynamic environment. Hence, a great deal of effort should be put into streamlining warehouse processes step by step, focusing on warehouse design, human aspects, and technology.

Thank you for reading and please share if you find it useful!

Recommended reading:

Case-study analysis of warehouse process optimization (M. Živičnjaka et al., 2022)

A Case Study on Optimization of Warehouses (V.Lesch et al., 2021)

The effects if storage utilization on warehouse efficiency and operational costs (K.America, 2020)

An overview of warehouse optimization (J.Karasek, 2013)

Influence of assortment allocation management in the warehouse on the human workload (I.Kudelska, G.Pawlowski, 2019)

Warehouse processes improvement by pick by voice technology (N.Dujmesic et al., 2018)

Improving efficiency in a hybrid warehouse: a case study (A.Freitas et al., 2019)



Image source: https://www.westgateuk.co.uk/news/internet-shopping-causes-boom-in-the-warehouse-sector/

Series Warehouse process optimization


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