Warehouse optimization: 7 tips for efficient operations and reliable processes

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Maintaining an overview of complex processes, permanently analyzing and improving procedures - this is the core of successful operational logistics. And where does this art become particularly visible? In efficient warehouse management. Well-managed Sites is characterized by a high throughput of goods, fast availability and smooth processes. In this article, we highlight the advantages and goals of warehouse optimization and provide you with useful tips.

Table of contents

  1. Warehouse optimization: definition and goals
  1. Optimize storage strategy
  1. Improve warehouse layout
  1. Apply methods of warehouse optimization
  1. Integrate logistics network into warehouse optimization
  1. Use software for warehouse optimization
  1. Reduce unwanted inventory
  1. Actively involve employees
  1. With warehouse optimization to higher added value

Warehouse optimization: definition and goals

The basic goals of warehouse optimization are almost self-evident. This process is about involving all internal and external stakeholders, structuring the processes in Sites more efficiently, eliminating unnecessary routes and time wastage, and maintaining an overview of warehouse stocks at all times. By definition, warehouse optimization is your tool of choice for improving internal warehouse processes from inboundpicking to shipping.  

This is associated with numerous advantages for you :

  • Shorter lead times
  • More efficient processes
  • Fewer unnecessary trips and empty runs
  • Better use of existing storage space
  • Increase in operational safety
  • More flexibility even for short-term requirements
  • Faster picking
  • Reduction of inventory damage

Make processes more efficient

In the course of warehouse optimization, you can design your logistics processes efficiently and in line with the market with well thought-out measures. This affects a wide variety of levels and activities in everyday business: from the adjustment of purchasing policies to the optimization of inventories and the rationalization of picking.  

In addition to internal cost and process efficiency, it is equally important to ensure a high level of customer service at all times. In the following, you will read seven tips for targeted warehouse optimization.

In order to remain competitive, it is important that the Sites is up to date and constantly optimized.

Tip 1: Optimize storage strategy

To outsiders, Sites often appears chaotic - insiders, on the other hand, know that everything from the planning of walkways to the arrangement of storage locations follows strict laws. Warehouse optimization begins with solid strategic planning. This starts with purchasing and inbound sourcing. Experience shows that an occupancy rate of well over 90 percent of the warehouse space - in relation to the individual product areas - considerably restricts handling and flexibility. As a result, partial stocks are stored elsewhere, which in turn results in unnecessary distances and less efficiency.  

One requirement in warehouse management is therefore not to overstress inventories. Another question: How can you place different product groups as efficiently as possible? "Fast-moving items", i.e. items that are needed frequently, are placed near the picking area and at the beginning of each aisle. Special sizes, on the other hand, are placed in special storage areas, emergency reserves in the less accessible storage locations. This brings us directly to the second tip: optimizing the warehouse layout.

Tip 2: Improve bearing layout

When choosing the perfect storage location, you should leave nothing to chance: A best practice is to classify both the items to be stored and the available storage bins in an A-B-C structure (A stands for top class) and assign them to each other accordingly. In doing so, you will of course take into account the usual size and weight dimensions of the storage units. A rule of thumb for an efficient warehouse layout is:  

  • The A-zone is located in close proximity to the start and end points of picking and is easily accessible. This means that fast-moving items can be packed quickly.
  • The B-zone belongs to less popular products or even special sizes.
  • The C-zone is furthest away from order picking, at the very back of the aisle or at the very top of the shelf - the perfect storage location for only occasionally needed spare parts, for example.  

Here's a tip: Don't concentrate A-Zones in one area to prevent employees from blocking each other during picking. Instead, A-zones are strategically distributed across several aisles and easily accessible areas of the entire floor space. This way, the right layout becomes the basis for successful warehouse optimization.  

With the ABC division of both the warehouse and the product portfolio, you simultaneously create the basis for an automatic, efficient putaway strategy. According to practical experience, this makes it possible to optimize routes and picking times by more than 30 percent compared to manually controlled warehouses.

Tip 3: Apply bearing optimization methods

What sounds like a matter of course is actually a multi-layered and complex task. It concerns both administrative and operational activities. A thorough analysis therefore includes numerous questions, such as:

  • How is the transport of goods between different storage zones organized?
  • What is the percentage of empty runs?
  • Are slots for delivery as well as for goods collection allocated and consistently monitored?
  • Which work steps are automated?
  • How many administrative activities are digitized, where is paper still necessary (reports, delivery bills, etc.)?
  • How can unnecessary or duplicate tasks be avoided?
  • In what way are you digitally networked with transport service providers and other external partners?

There is a lot of potential for your warehouse optimization in answering these questions and consistently avoiding redundancy or ineffectiveness.

Tip 4: Integrate logistics network into warehouse optimization

Theoretical concepts of warehouse optimization can only work in practice if all those involved are actively involved. In addition to internal resources, logistics processes also involve many external service providers. Therefore, address service providers and partners at an early stage, develop joint strategies for more efficient operations and processes. Another way is to focus procurement and delivery requirements on selected, particularly high-performing partners.

Collaboration with all involved supply partners and parties can be critical to the success of the warehouse.

Tip 5: Use software for warehouse optimization

In automated Sites , digital tools take the place of paper, and management software ensures real-time, up-to-date data at all times. For example, inventory management systems allow you to reduce human error and optimize inventory planning - right down to ordering strategy and more efficient stock distribution to your ABC storage bins.

Administrative efficiency also means always having the information available in real time when storing or retrieving goods. Since you always know the current stock level at the individual storage locations, search times and unnecessary routes are reduced.  

Tip 6: Reduce unwanted inventory

In addition to fast-moving items, almost every Sites also has literal slow-moving items - products that are hardly ever needed. It becomes a challenge when the inventory of these items continues to grow successively, blocking storage space that is urgently needed elsewhere. The solution: Improve purchasing already, check the stock of unwanted, stagnant inventory and reduce consistently.

With intelligent systems and digital evaluations, you can, for example, recognize the seasonality of certain items and adjust their stock accordingly. The allocation of goods to ABC storage space can also be continuously improved on the basis of solid data. In this way, you create value-added storage space for fast-moving and profitable items.  

Tip 7: Actively involve employees

Every Sites only works as well as the human factor. Therefore, involve employees in the overall process as early as possible in the course of warehouse optimization. Suitable measures include an internal ideas exchange, an analysis of the workplaces, a regular exchange to identify potential for improvement, and the identification and implementation of possible training needs.

More efficiency for your warehouse logistics

An important tool for warehouse optimization is intuitive logistics software that controls processes, optimizes delivery reconciliations and also offers numerous reporting and control functions in real time. With TradeLink, sustainable cost savings of up to 30 percent can be achieved in incoming and outgoing goods processes - while at the same time increasing warehouse capacity by up to 20 percent. Get transparency at any time and use all the possibilities of warehouse optimization and capacity planning now.

With warehouse optimization to higher added value

Efficient warehouse management means ensuring efficient processes in an "organized chaos". This involves not only the company's own employees, but also external partners and transport service providers.

Starting with the ABC classification of storage locations and goods to be stored, strategic warehouse optimization leads to sustainable value-added gains. The potentials are large, measurable successes for inbound and warehouse logistics can usually be realized quickly and purposefully. Your benefits: Reliable and resilient processes, higher warehouse performance and thus improved cash flow as well as higher profitability of your company.

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