How To Optimise Warehouse Operations And Deal With Increasing Demand

Last Updated: 

February 9, 2024

Every business manager dreams about leading a thriving and fast-growing enterprise. As your business grows, so does the scale, intensity, and complexity of pressure it applies on its various moving parts. In particular, your warehouse can inadvertently become a bottleneck and make efficient ecommerce fulfilment harder.

If you want your warehouse to work for and not against your business, it is vital that you optimise operations in tandem with soaring demand. Check out the following tried and tested tips to boost warehouse efficiency.

Key Takeaways on Optimising Warehouse Operations as Demands Increase:

  • Maximise Space Use: Use vertical space and adjust shelving types to optimise storage and reduce the need for additional warehouse space.
  • Organise Warehouse Workstations: Arrange workstations to minimise staff movement, improving safety, efficiency, and reducing errors.
  • Zone Products by Demand and Association: Position high-demand products near the entrance and group frequently ordered items together for easier access and dispatch.
  • Optimise Inventory: Implement lean inventory management strategies to ensure only necessary products are stored, complemented by accurate inventory tracking.
  • Adopt or Improve Warehouse Management Technology: Utilise a Warehouse Management System (WMS) or an Enterprise Resource Planning (ERP) system with a robust warehouse module to automate operations and increase productivity.
  • Streamline Returns Process: Establish a clear process for handling returns, including tracking and analysing return data to improve fulfilment processes and reduce future returns.
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1. Maximise space use

When faced with soaring demand, the natural inclination is to buy/lease even more warehouse space. Often, this is the wrong move. Take a closer look at your current warehouse, and you will notice a substantial amount of unused space you are paying for. Think about vertical space, for example. You could install taller shelving units as well as invest in tools and equipment that simplify the process of picking and storing items at height. 

Another opportunity may lie in changing or diversifying the type of shelving, racks, and pallets used. Instead of having one type of shelving for both small and large objects, have smaller shelves for smaller objects and larger shelves for larger objects. Having small items in large storage slots is a waste of precious floor space.

2. Organise warehouse workstations

Arrange warehouse workstations in a way that reduces the distances staff have to move when discharging their duties. Make sure each employee can reach products, tools, and equipment without having to move from one end of the warehouse to the other. 

The longer the distances warehouse staff have to move, the lower their throughput, the higher the fatigue, and the greater their chances of order errors. The right placement of workstations improves safety, minimises mistakes, eliminates clutter, and creates room for warehouse equipment manoeuvre.

3. Zone products by demand and association

Demand is likely to roughly follow the Pareto Principle if you are selling different products. About 20 percent of your product catalogue may be responsible for 80 percent of your order volume. Your warehouse’s layout should take this disproportional demand into consideration. 

High-volume products should be near the warehouse entrance for ease of access and dispatch. Regularly ordered products should be positioned close to one another.

4. Optimise inventory

With growing order traffic, every warehouse shelf matters. You want only the products that need to be in the warehouse, to be there. Adopt a lean strategy in inventory management. Lean inventory is just as beneficial for warehousing as it is for manufacturing. 

It may be necessary to cut down your safety stocks or request manufacturers/suppliers to deliver smaller batches but more frequently. These measures should be complemented by elaborate inventory tracking to forestall any looming stockouts. 

5. Adopt or improve the warehouse management technology

Chances are your warehouse does depend on some technology. Whether it does so or not though, increasing demand is a time to think about getting the right warehouse management system (WMS). If you already have an enterprise resource planning (ERP) system with a robust warehouse management module, that could do the job. Otherwise, you may have to procure a standalone WMS.

The benefits of a good WMS are vast. The resulting automation improves coordination, increases accuracy, cuts down on wasted work hours, and lifts overall productivity. Settle on a WMS that seamlessly integrates with your existing applications.

6. Streamline returns process

Returns are an inevitable component of a business. They occur for various reasons such as product defects, poor fit, wrong address, wrong item, late delivery, buyer’s remorse, and even fraudulent practices like wardrobing. According to the National Retail Federation, 16.6 percent of US retail sales in 2021 were returned by customers.

Returns can disrupt warehouse operations. Establish a well-thought-out process beforehand on how to handle them. The returns process should be as elaborate as the fulfilment process. A good WMS should capture useful returns data including when and why a product was returned, who returned it, refunds due and any freight rates or other costs of return. 

The idea of returns tracking is not just to know what happened with each return but to make changes to the fulfilment process and reduce the likelihood of a similar return in the future.

Wrapping up

Optimising warehouse operations is not a one-off process. There will always be shifts in the market, order flow, regulations, best practices, technology, and other factors that require regular tweaking to get things working smoothly. 

Make the most of warehouse performance feedback and data from customers, warehouse staff, and your WMS. That way, you can preempt and/or correct problems well before they cause substantial disruption and loss.

Author Bio: Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an eCommerce fulfilment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

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