Negosentro|Space Planning – 5 Tips to Improve Warehouse Efficiency
“Oh! You don’t need a brick and mortar store anymore.”
“Oh! The future is digital.”
“Business is so much easier.”
“Get a Facebook page and start working.”
“If it were so easier then, we’d have million-dollar enterprises today.”
They just don’t quit talking about everything the internet has done for small businesses!
“Internet has completely changed the industry outlook.”
“Who needs a physical space now?”
These days, people can’t stop gushing over the benefits of the internet and how ‘physical space isn’t needed anymore.’ If you also think that, well, we are here to make you rethink it.
You can’t stack all your stock for a business in your cupboard unless you have a Narnia back there.
Warehouses are still needed, but you have to be smart about them.
It’s a myth that only giant corporations need warehouse and storage. At one point or the other, every startup on the internet ‘needs to find adequate warehousing to fulfill its need for storage.’
So, no matter what happens or what revolution is brewing on the internet, the fact of the matter is that warehousing is still relevant today. After all, if you won’t aim big, how will you be big?
Now that we are over the myth of spaceless business, it is vital to consider the ‘warehousing essentials’ in business. It is not just about warehousing essentials but about business growth.
The world of the internet has and will continue to experience growth. In particular, the Asia Pacific region is one of the leading markets, both in terms of customer and production. It is because the APAC region forms the central manufacturing hub of the world.
The transport sector is one of the sectors that have the highest demand for warehousing. It accounts for the second-highest share of the sectorial total. Warehousing and support activities for transportation makes up the ‘second-highest share of value addition and employment.’
According to Zebra.com, about 26% of companies management views warehouses and distribution centers as a potential asset for business growth. So, even in a world where online spending boomed 15.9% over the previous years, ‘optimizing warehouses is essential.’
A warehouse is all about the space, the best method to optimize costs is to optimize it for space. You must know how to cut your warehouse costs to optimize your space and grow your revenue.
The 80:20 Ratio
The ‘80:20 ratio’ is about recognizing the movement of your products. This is used for products in the areas of your warehouse that are not readily accessed. The Pareto Principle says that about 80 percent of your total warehouse movements come from only 20% of your products.
Time is money in every business. To save both time and cost, it is crucial to understand the Pareto principle. Once understood, it becomes clear that ‘20 % of the products’ that move the fastest, must never be in the far corners of your warehouse.
Common sense dictates that the only products in hard-to-reach areas should be those that do not move as fast. Or, if we are to talk about unconstrained optimization, no space in your warehouse should be hard reach. Everything should be at an arm’s reach in your warehouse (metaphorically).
Consider Unique Requirements
While most warehouses follow a similar design and layout, the fact of the matter is that every warehouse has different requirements. However, these are often ignored during the initiation phase when the layout of a warehouse is being designed.
Keeping these considerations in mind, every business must plan for the future. Take into account your predicted future growth and the sales you would generate to design the most optimal layout for your warehouse.
Everyone talks about the internet. Everyone talks about the world of robotics and automation… and rightly so. It is one of the best things to ease your business. You could introduce it in your business to take over menial tasks that may be too boring for your human labor.
While automation may still be relatively new in warehouses, the world surely is picking up on it. Statistics show that only about 37% of total warehouses are not on the bandwagon of automation as of yet.
However, automation warrants several space considerations and requires unique installations for working; it must be employed to improve the productivity of your warehouse. You ask, why? Because research shows that upon upgrading to a proper inventory system, any company can enjoy a ‘25% gain in overall productivity.’
The Picking Process
In optimizing your space, one of the most important considerations is to make the ‘picking up process is seamless.’ Of course, accepting deliveries is also an important segment, then why would picking deserve more attention?
Stats give us an answer. Picking accounts for 60% of the total operating costs of a warehouse. Improving it means an instant reduction in your cost. So, if you want to learn how to cut your warehouse costs, ‘cut down on picking costs.’
A common problem that prevails in warehouses is that once they have been operational for a while, junk begins to accumulate in corners.
Warehouses are massive and it’s understandably cumbersome to clean them. Now, some of the stuff may not be junk, but also, may not be essential enough to take up the space inside your warehouse. To optimize your warehouse storage space, you must clear it out at regular intervals.
As the economies around the world demand more innovative products and services, businesses must try their best to come up with creative solutions to stay ahead in this race.
Here, space management and optimal utilization of resources becomes even more vital. It is important to always keep your warehouse at an optimum efficiency. Not only does it makes the warehouse operations simpler, it also drastically improves the chances for growth of the business who use warehousing services.