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Top 6 Ways to Improve Warehouse Operations

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Ways to Improve Warehouse Operations - Warehouse with employees
Steve Thompson
Steve Thompson
September 23, 2022

At the top of your list of ways to improve warehouse operations should be an audit and review process that looks at the big picture. Make a list of vulnerabilities that require your attention for upgrading, and then expand upon the following six areas of improving warehouse operations.

1. Optimize Your Warehouse Layout

Well organized warehouse

One of the most effective ways to improve warehouse operations is to rethink the layout. It should allow easy passage to move inventory in and out and focus on team safety. Certain warehouse areas should be set up for picking and packing, separated from repair, quality control, or other work. The ideal layout reduces the need for workers to move around much. The "5S" method for organizing workstations emphasizes Sorting, Setting in order, Shine, Standardization, and Sustainability.

Ultimately, an organized warehouse helps improve order fulfillment and maximizes vertical space. It will allow for a more efficient and productive workplace. The key is strategically placing workstations so that loading and unloading can be done safely and on time. Heavy equipment can contribute to clutter and accidents unless set up in safe locations.

2. Build Strategically-Placed Fulfillment Centers

Another way to improve warehouse efficiency and increase productivity is to build a network of fulfillment centers located strategically to make shipping more efficient. The Amazon warehouse design has helped inspire this direction, as the online retailer has built 145 fulfillment centers worldwide.

Amazon has used a strategy called "random stowage" for over two decades that is now used by about half of all warehouses. Essentially, inventory items are stored randomly rather than in fixed locations. The benefit of random stowage is that it maximizes space more efficiently. The company can locate scattered inventory electronically. It cuts down on wasted space and improves picking accuracy. Cutting the cost of fulfillment allows Amazon to lower its prices to customers.

3. Aim for a Leaner Warehouse

Going leaner on inventory is another way to improve warehousing. Instead of loading up on inventory to fill warehouse space, focus more on maximizing space. Think about reducing or getting rid of safety stocks. Another strategy is to ask suppliers to deliver lower quantities more often. You must also look at ways to make the picking and packing process more flexible so that it's easy to adapt to changing market conditions quickly.

A lean warehouse allows for reduced handling time and less time spent checking inventory. More focus can be put on improving the picking and packing process, leading to greater accuracy in order fulfillment. With a leaner operation, there's less chance of items getting forgotten or lost. One of the most efficient ways to organize items is with "ABC Analysis." You simply divide and prioritize your inventory into three categories (A, B, C) based on ordering frequency.

4. Invest in Powerful Warehouse Technology

Man using warehouse management software

One of the best ways to improve warehouse productivity and engagement with supply chain partners is through a digital platform such as a warehouse management system (WMS) or enterprise resource planning (ERP) software.

Employees can be more productive using technologies that support hands-free operations in a warehouse environment. Communications equipment and scanners that locate inventory products through RFID tags are crucial for modern warehousing. Workstations should be set up so that necessary tools and equipment are easily within reach.

Embedding your warehouse with IoT sensors that connect with your inventory management software in real-time brings empowering qualities to your operation. You'll have a much more accurate view of inventory with greater awareness of where specific items are located. A modern WMS integrated with AI can improve supply forecasting.

5. Train Employees to Emphasize Efficiency

When warehouse management hires new talent, a key concern should be experience, especially for complex operations. Working in a warehouse requires a strong memory, problem-solving skills, and communication ability. The focus should be on people who are fast learners and want to contribute to a fast-paced team. It's important to give workers thorough training, so everyone contributes to a cohesive and consistent team.

The goal to improve warehouse productivity depends on getting team players to adopt best practices. Sustainability should be a top concern at every warehouse, where supply and demand are balanced, and waste is steadily eliminated. Since the environment ties in with health and safety, it's critical to emphasize how a clean and safe workplace contributes to greater efficiency and productivity.

6. Offer Incentives

Woman offering money

An effective way to motivate a team is to offer impressive incentive pay. You can set up bonuses for workers who exceed expectations, giving them reasons to step up performance. The incentive method works as part of a larger holistic system in which the company rewards its employees in numerous ways. The primary key is to treat employees equally and fairly with respect and acknowledge their contributions to the team. Adding pay incentives helps create a more fun work environment while encouraging self-motivation.

If the budget is too tight to offer pay incentives, consider offering vacation time. Making the workplace more flexible for employees to spend more time with their families is another way of letting them know you care about their wellbeing. Retaining a warehouse staff these days is vital to the bottom line, so it's important to make the work as attractive and rewarding as possible.


Examine these ways to improve warehouse operations and how they apply to your situation. The more you focus on cutting out errors, waste, and inefficiencies, the more productive your warehouse team will be, improving your warehouse and bottom line. Remember to maximize space by investing in the right pallets for your warehouse.