top of page

Question answered in Quora - How do I optimize a warehouse?


This is a very broad question. There are many things to optimize, the most important thing is whatever you want to optimize you need to measure, what you cannot measure you cannot manage, so you cannot optimize, also the more you focus on measuring, the more you can make people accountable, and also people will focus and execute on what they are measured on

The most important thing for any warehouse is to ship orders, the more orders you ship the more you can invoice and more you can get paid.

So keep that in mind and work backwards, so what is your typical volume look like, how many orders. How many boxes/cartons? How many items? How many units? So how many people will you need to pick those units? Are you picking unit by unit or boxes by boxes, with people buying through Internet crazily, there are a lot of Ecommerce operations that have come up, for them the order profile is picking 1 or 2 units, so batch orders so a person can pick a batch of 10 or more orders and do it efficiently, then there is retail, shipping to a store, usually like dozen of a specific item, so boxes of dozen are picked and shipped, then there is also wholesale, where pallets of items are shipped to a wholesale buyer, once you get the volume and the number of order pickets you need, then determine how much inventory you need to receive, put away and replenish, based on that determine the number of people you will need for the operation, also determine why peak volume will look like, you need to have a way to optimize processes and also get additional labor to support peak volume, usually that is done by coming with processes that run in cordoned off areas to ahip the most bought fast moving SKUs, also hire temp workers, also have any tools these temp workers need

Here are some very high level aspects that can be optimized

1-Labor

2-Throughput

3-Inventory

1-Labor - To optimize labor you need to measure and manage labor. Basically every single minute of everyone on the floor needs to be measured, there are labor management systems that can do this, you can come up with engineering standards for every single job that is performed in the warehouse, then Engg standards can be applied and you can measure what are called SAMs, Standard Allowed Minutes, the actual minutes to takes to get a job done, based on that you can calculate efficiency of the person by seeing how long the person is taking. Then you need to display these numbers on a daily basis, if you can show this realtime to warehouse operators that will be even better

2-Throughput-This is the amount of product you are able to push through the warehouse, it varies depending on the channel, for Ecommerce orders the throughput can be measured in units/cartons, whereas for a retail channel you would typically move boxes, but you have to measure the right thing, measuring units for retail channel cannot be compared to units for Ecommerce channel. So be careful in what you are measuring

3-Some warehouses measure this at the warehouse level, some don't, some might look at this across the entire supply chain, the most important thing is inventory accuracy, once your inventory is accurate, let us say to the level of 99.9%, then you can look at optimizing the inventory in the warehouse, the least you can keep on hand it is better, the most important thing is you need to have enough inventory to fulfill every single order, the last thing you want is a disappointed customer that is not able to buy what they saw in the store or your website, the lost sale is the every retailer's dreaded scenario

Hope this helps, if there is a specific question will be happy to answer that one.


ABOUT THE AUTHOR 

Puga Sankara is the co-founder of Smart Gladiator LLC. Smart Gladiator designs, builds, and delivers market-leading mobile technology consisting of Smart Gladiator Wearable Scanguns, Tablets, Mobile Tech & Apps for retailers, distributors, and 3PL service providers. So far, Smart Gladiator Wearables have been used to ship, receive, and scan more than 100 million boxes. Users love them for the lightweight, easy-to-use soft overlay keyboard, texting&video chatting ability, data collection ability etc. Puga is a supply chain technology professional with more than 17 years of experience in deploying capabilities in the logistics and supply chain domain. His prior roles involved managing complicated mission-critical programs driving revenue numbers, rolling out a multitude of capabilities involving more than a dozen systems, and managing a team of 30 to 50 personnel across multiple disciplines and departments in large corporations such as Hewlett Packard. He has deployed WMS for more than 30 distribution centers in his role as a senior manager with Manhattan Associates. He has also performed process analysis walk-throughs for more than 50 distribution centers for WMS process design and performance analysis review, optimizing processes for better productivity and visibility through the supply chain. Size of these DCs varied from 150,000 to 1.2 million SQFT. Puga Sankara has an MBA from Georgia Tech. He can be reached at puga@smartgladiator.com or visit the company at www.smartgladiator.com. Also follow him at www.pugasankara.com

bottom of page