3 WAYS TO SET UP YOUR WAREHOUSE FOR SUCCESS

When you're in the process of setting up a new warehouse, you really only have one chance to get it right  - so every decision counts. From selecting the right racking system to choosing the most efficient material handling equipment, each choice will ultimately impact the overall efficiency and effectiveness of your operations.

Unfortunately, many warehouse managers fall into common pitfalls that can hinder productivity, growth and lead to costly mistakes. We’ve seen it first-hand through our many years in the industry and we want to share the three common pitfalls that crop up again and again so you can avoid them.

THE THREE MOST COMMON FAILURES IN WAREHOUSE SETUP 

Common pitfall 1: Prioritizing pallet density over stock management

"We need to maximize the pallets we can store at our facility," say many operations managers. However, while prioritizing pallet density over stock management may seem logical, it’s crucial to consider the implications for stock management. What do such difficulties look like? Here are five for starters…

1. Inefficient stock retrieval processes. Opting for floor-stacking or selecting a high-density storage system versus a racking system that’s aligned with your stocking requirements can make it challenging for warehouse staff to access and retrieve the stock that needs to ship. Such inefficiencies can result in longer lead times for order fulfillment and increased labor costs.

2. Inaccuracies in inventory tracking: A racking system which doesn’t align with your inventory, for example, the number of different SKUs you stock, what quantity of each SKU you stock and whether your stock has FIFO or other requirements, makes it challenging to accurately track inventory levels. Without clear visibility into stock levels, warehouse managers can struggle to maintain accurate inventory records and ensure stock rotation, which can lead to discrepancies between physical and recorded inventory and spoilage. These inaccuracies can then lead to stockouts, overstocking, wastage and ultimately, loss of revenue.

3. Delays in order fulfillment - difficulty in accessing and retrieving stock can lead to delays in order fulfillment. If warehouse staff have to spend excessive time searching for specific items, this results in longer processing times and delayed shipments to customers. This then has the further knock-on effect of customer dissatisfaction, loss of business, and damage to your warehouse's reputation.

4. Compromised safety - overcrowded storage areas aren’t safe storage areas, with tightly packed inventory increasing the risk of accidents such as falls, trips, and collisions with equipment. Additionally, inadequate space for maneuvering can make it challenging for forklift operators to navigate the warehouse safely, increasing the likelihood of accidents and injuries.

5. Wasted space - very often we see wasted space through not taking advantage of the vertical space in a warehouse or due to inefficient layout configurations often as a result of transferring old storage systems to new facilities. This can have long-term effects, limiting the ROI of the warehouse and eliminating the advantages of reconfiguration.

Common pitfall 2: Sticking with familiar solutions and missing an opportunity 

It happens more than it should. Warehouse managers opt to stick with solutions they’re familiar with instead of exploring new and more efficient options. We understand; there are many reasons why sticking with what you know might seem like the best option. Here are some entirely valid concerns:

1. It avoids disruption. Implementing a new solution requires time and effort for training and adaptation, that’s true. So managers may choose to stick with what they know to avoid disrupting existing workflows and minimize extra learning for their team.

2. It sidesteps (perceived) risk. Trying a new solution obviously involves some. Managers often take the familiar route for fear that unfamiliar systems could lead to unexpected problems or inefficiencies and impact daily operations and customer service.

3. It avoids (perceived) cost escalations. We understand, investing in new equipment or systems often entails upfront costs and budget considerations. Many warehouse managers are hesitant to allocate resources to unfamiliar solutions without being certain of their benefits or return on investment.

4. It saves time. Operations managers are often under pressure to meet tight deadlines and productivity targets. Exploring and implementing new storage or material handling solutions may be perceived as time-consuming, especially if it involves extensive planning, testing, and adjustment periods.

5. Lack of awareness. In some cases, warehouse managers may simply be unaware of newer, more efficient solutions available in the market. Without exposure to innovations or industry developments, they may default to familiar methods out of habit or tradition.

While these are all common and, on the face of it, valid reasons for choosing not to give new solutions a go, in the long run it can be the epitome of a wasted opportunity. The best time to implement a new solution is at the critical juncture of setting up a new warehouse. Getting it right the first time avoids higher costs and inefficiencies in the long run.

Common pitfall 3: Mismatching material handling equipment, racking, and products

"This isn't working" - we’ve heard this when mismatched material handling equipment, racking, and products are at play. The thing is, without proper alignment between these key elements, the day-to-day operations in the warehouse becomes inefficient and hard to manage, which in turn leads to wasted time, increased labor costs, and decreased overall productivity.

3 WAYS TO AVOID THESE COMMON PITFALLS 

Arriving at the best solution for your warehouse setup requires three key components.

1. Thorough knowledge of material handling equipment and racking systems - understanding the capabilities and limitations of different equipment and systems can help you make informed decisions that align with your specific needs.

2. Experience from diverse warehouse situations - draw from your experience when setting up a new warehouse; leverage past learnings to anticipate challenges and identify opportunities for improvement. If you’re new to the game, then speaking to an expert in the area is an essential first step.

3. In-depth study of the products you are storing - lastly, conducting an in-depth study of your stock requirements and rotation is essential for success. By thoroughly understanding the products and operations, you can tailor your warehouse setup to meet the stock requirements, ensuring maximum efficiency and happy customers. 

TO SUM UP

Avoiding common pitfalls in warehouse setup is crucial for achieving success in your operations. By prioritizing stock management, embracing innovation, and ensuring alignment between equipment, racking, and products, you can create a streamlined and efficient warehouse environment that maximizes your ROI and drives growth and profitability. 

To avoid headaches down the road, we advise taking a proactive approach to quality racking planning today. If you're feeling uncertain about your current racking situation or need a hand in upgrading to safer and more efficient solutions, our team is here for you every step of the way. Your warehouse's safety and success mean the world to us, too.

Get in touch with us today to find out more