How to Improve Warehouse Efficiency with Better Best Practices

In a world of 2-day shipping, fast warehouse operations are vital to meeting seasonal consumer demands and expectations—but that kind of turnaround is not the result of realistic workplace standards. At the end of 2020, Amazon had issued 13,000 disciplinary notices at a single warehouse, admonishing even those employees whose performance fell slightly short. Efficient warehouse operations do not fall solely on the shoulders of employees. Recruiting seasonal employees should not be the only strategy companies employ when ramping up warehouse operations this holiday season. Ahead of this busy period, you can work with your leadership team to improve warehouse efficiency, add best practices, and streamline your warehouse operations. 

Understanding warehouse best practices

What are warehouse best practices?

Warehouse best practices are standard procedures that produce optimal results. They should be easy to replicate and implement across multiple warehouse locations. An efficient warehouse operation follows established best practices to stay on track with overarching company goals—usually lowered cost and risk, and a high level of service. 

Defining warehouse efficiency

How is warehouse efficiency measured?

Many metrics can measure warehouse efficiency: packages processed, error rates, or the number of five-star customer ratings. An efficient warehouse maximizes its space, streamlines its operations, and promotes productivity among employees.

To fully understand where there are gaps in warehouse efficiency, map out all key processes in your operations. If it’s helpful, create a visual—put pen to paper (or whiteboard)—or make a detailed list. 

An example: If reviewing your order-picking procedures, analyze each step in the process. How are your employees receiving the order, and what information do they have access to? Where do they need to travel to collect each component of the order? Which pieces of equipment do they use regularly? How many items are they gathering at once? 

Doing this will help your team to identify opportunities to minimize inefficiencies and create uniform, transferrable best practices.

How can we improve warehouse efficiency?

The easiest way to improve best practices: ask your employees for their feedback! Even the most efficient warehouses improve by focusing on the human element of their operations. Your employees hold valuable insight due to being closest to your day-to-day warehouse operations. 

Improving employee productivity is a vital component of warehouse efficiency. Treat your team well, and they will be more effective at their jobs. 

1. Focus on retention – Facing a challenging hiring climate, it is less expensive to pay an experienced employee than it is to hire and train a new one. 
2. Appreciate top performers – These employees are role models for your team. Verbally recognize their contributions and offer fun rewards like gift cards. 
3. Maintain a flexible workforce – Overtime should be the exception, not the rule. Bring on temporary workers to avoid burnout on your core team. 
4. Conduct ongoing training – Safety training and development opportunities go a long way in making your team feel respected as working professionals. Instead of lecturing, use conversational language and encourage questions. 
5. Offer financial incentives – Measure your employee’s productivity rates and offer bonuses for meeting or exceeding targets. This is arguably the most effective tactic. 

How to redefine best practices

What factors contribute to the efficiency of warehouse operations?

In addition to employee productivity, warehouse process improvement should include considerations towards maximizing the use of warehouse space and streamlining warehouse operations. 

Some factors to examine when redefining best practices include: 

• Warehouse layout – Is your warehouse easily navigable? Are you using vertical space with expanded shelving units?
• Storage options – How long does it take your employees to sort through inventory bins? Are the bins organized and uniform? Do you need different sizes?
• Labeling & signage – Are restricted access zones and areas with forklift traffic marked? Are goods marked with barcodes, QR codes, or RFID tags?
• Lean inventory – Do you have more inventory than you need? Consider eliminating safety stocks and asking suppliers to deliver smaller quantities more frequently. 
• Picking & packing methods – How are workstations organized? How are products organized? Consider grouping items that sell quicker than others, products most frequently sold together, and seasonal items. 
• Receiving – Have your employees been trained to receive new shipments accurately? Consider delegating these tasks to more experienced employees.

Benefits of optimizing warehouse operations

Why is warehouse efficiency important?

Efficient warehouse processes help your business maintain a competitive advantage in an increasingly innovative sector. Currently, Amazon is introducing robot systems due to a growing need for automation. 

The greatest benefit of optimizing warehouse operations? Your company remains relevant in the ways that matter:

• Quick, timely, accurate shipments
• High-quality customer service
• Cost reduction and maintaining the bottom line
• Employee productivity increases

Gather feedback from your team and conduct an audit of your warehouse operations ahead of the holidays. Establishing best practices will keep your operation running smoothly for the rest of the year.

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About the Author: Meghna Jaradi is a freelance writer and events manager with experience working for the Seattle Times, Kitchen Arts & Letters, Book Larder, Peddler Brewing Company, and more. You can contact her on LinkedIn.