10 Ways to Improve Warehouse Efficiency & Throughput

In the world of logistics, the efficiency of warehouse operations is a key determinant of business success. As e-commerce continues to grow and customer expectations rise, the pressure on warehouses to perform faster and more efficiently has never been greater. The goal is clear: optimize every aspect of the warehouse to deliver goods on time, reduce costs, and increase profitability.

This article outlines ten foundational steps to streamline warehouse operations and discusses how the integration of an innovative storage solution, the AutoStore system, can further magnify these benefits. From enhancing layout design to adopting technology for improved accuracy, each step is a building block towards a state-of-the-art warehouse that not only meets but exceeds modern-day demands.

1. Optimize warehouse layout and flow
2. Implement lean inventory practices
3. Adopt advanced picking methods
4. Standardize processes
5. Integrate technology
6. Improve inventory visibility
7. Regular training and cross-training
8. Embrace automation
9. Equipment maintenance
10. Continuous improvement through analytics

1. Optimize warehouse layout and flow

A warehouse’s layout can significantly affect the speed and accuracy of inventory management. An optimal layout is about more than just using space efficiently; it’s about creating a flow that reduces the time and effort it takes to move items from storage to shipping. For instance, fast-moving items should be placed near the packing area to minimize travel time. Performance can be measured by tracking the average time taken from item pick to order shipment.

The AutoStore system enhances layout optimization by delivering items directly to the operator at the picking stations, thus eliminating wasted travel time. Its compact design allows for up to 60% more storage space, making it ideal for tight spaces and high-throughput environments.

2. Implement lean inventory practices

Lean inventory aims to minimize waste by maintaining a stock level that reflects consumer demand, which helps to avoid the overstocking of items and reduce carrying costs. For example, a company might use sales forecasting to determine the optimal stock level for each product. Efficiency gains are reflected in increased inventory turnover rates and reduced holding costs.

AutoStore's Grid system and Bin delivery mechanism simplify the management of lean inventory by providing an accurate, real-time overview of stock levels. This allows for tighter inventory control and the ability to adjust to fluctuations in demand without delay.

3. Adopt advanced picking methods

Advanced picking methods such as zone picking, wave picking, and batch picking can transform a warehouse’s throughput. For example, in batch picking, a worker picks multiple orders simultaneously, reducing the number of trips to each location. Throughput improvements are measurable by tracking the number of orders picked per hour and comparing the time spent on picking before and after implementing new methods.

AutoStore facilitates advanced picking by automatically delivering bins to pick stations based on optimized picking algorithms, which can streamline the picking process and enhance throughput significantly.

4. Standardize processes for consistency

Standardized processes ensure that every task is performed efficiently and uniformly, reducing variance in operations. It also makes it easier to onboard new employees and provide cross-training. For instance, a warehouse might develop a standard operating procedure for receiving new stock, which could include steps for quality checks, labeling, and storage. KPIs for standardization include task time consistency and error rates.

The AutoStore system supports process standardization by providing a consistent method for storing and retrieving items. Its intuitive, quick-to-learn user interface can guide operators through the picking process, ensuring that every step is executed uniformly.

5. Integrate technology for accurate and efficient operations

Technology such as a Warehouse Management System (WMS) can drastically improve the accuracy and speed of warehouse operations. By using handheld scanners, workers can quickly update the system on inventory changes, reducing errors and speeding up the process. Metrics for technology efficacy can include the reduction in manual data entry errors and improved order processing times.

The AutoStore system is designed to integrate seamlessly with WMS technology, ensuring that information is accurate and that inventory and order processing is as efficient as possible. For instance, as items are picked, the system updates inventory levels in real-time, eliminating discrepancies.

6. Improve inventory visibility

Good inventory visibility means knowing exactly what is in stock and where it is located at all times. This can be achieved by implementing real-time tracking systems that update inventory levels as items are received, moved, or shipped out. A clear measure of inventory visibility is the ability to account for stock levels at any given time with minimal discrepancies.

AutoStore significantly enhances inventory visibility with its Bin-centric approach. Each inventory Bin's location is known, and stock quantities are updated immediately, reducing the chances of lost items and enabling quick response to low-stock alerts.

7. Regular training and cross-training of staff

Efficient operations rely on a well-trained workforce. Regular training sessions can keep staff updated on best practices and new technologies. Cross-training, where staff are trained in multiple roles, adds flexibility and resilience to workforce planning. The effect of training is often seen in the reduced time it takes to complete tasks and the flexibility with which staff can be allocated to different roles based on demand.

The simplicity of the AutoStore interface makes it easy for staff to operate different aspects of the system after minimal training. This cross-functionality ensures that productivity remains high, even if some roles are temporarily understaffed.

8. Embrace automation for task efficiency

Automation can take over simple or complex repetitive tasks, allowing human workers to focus on areas that require more nuanced judgment. For example, automated sorting systems can process thousands of items per hour, far exceeding human sorting capabilities. The impact of automation is measurable in terms of throughput increases and labor cost reductions.

AutoStore Robots work tirelessly, retrieving and delivering inventory Bins as needed, which means that the physical burden on human workers is reduced, and tasks that used to take minutes now take seconds, resulting in a direct increase in productivity.

9. Equipment maintenance for reliability

Reliable equipment is the backbone of warehouse operations. Scheduled maintenance can prevent unexpected breakdowns that cause bottlenecks and delays in the supply chain. Metrics for evaluating maintenance efficiency include the frequency of equipment failures and the time taken to repair them.

Due to its robust design, the AutoStore system requires less frequent maintenance than conventional storage systems. This reliability translates into higher uptime and continuous operation.

Did you know that AutoStore is the most reliable warehouse automation system in the world with a global average system uptime of over 99,7%? Learn more.

10. Continuous improvement through analytics

Continuous improvement is facilitated by the regular analysis of performance data to refine operations. By monitoring KPIs, warehouses can identify inefficiencies and implement strategic improvements. This may include analyzing picking speeds, order accuracy, and customer satisfaction scores.

AutoStore provides detailed analytics that can identify bottlenecks in operation, such as slow retrieval times or high frequencies of certain items. This data is invaluable for making informed decisions on how to improve the overall efficiency of warehouse operations.

By focusing on these strategies, warehouses can significantly improve their operations. When complemented with the AutoStore system, these improvements are amplified, allowing businesses to achieve high levels of efficiency and throughput.

How to measure warehouse efficiency

Warehouse efficiency is quantified through several key performance indicators (KPIs) that together provide a comprehensive view of the operational health and productivity of a warehouse. These are the five main warehouse KPIs to measure warehouse efficiency:

• Order lead time: Measures the speed of warehouse processes, targeting the shortest time from order receipt to shipment without sacrificing accuracy.
• Cost per location per piece: Reflects the storage cost efficiency, aiming for the lowest cost that maintains inventory quality and security.
• Error rate: Indicates the accuracy of order fulfillment, with a goal of minimizing errors to reduce costs associated with returns and customer dissatisfaction.
• Return rate: Measures customer satisfaction and order accuracy, aiming for the lowest percentage of returns due to fulfillment errors.
• Average cost per order: Encompasses all operational costs related to order processing, providing a consolidated view of efficiency and cost-effectiveness.

The effectiveness of warehouse operations is often a balancing act between speed and cost. These KPIs serve as guideposts for maintaining this balance, ensuring operations are lean, responsive, and customer-centric. Through continuous monitoring and improvement, warehouses can adapt to the dynamic demands of the supply chain landscape, leveraging precise metrics to drive decision-making and operational success. Regular assessment and optimization of these KPIs are crucial steps toward achieving a state of operational excellence.

Read more: 5 Key Warehouse KPIs & How to Achieve Them

Maximizing throughput with the AutoStore System

Throughput – the rate at which a warehouse processes incoming and outgoing goods – is a critical measure of a facility's efficiency. The AutoStore system, with its innovative approach to storage and retrieval, is engineered to maximize throughput, ensuring that businesses can meet high demand and deliver orders swiftly.

The AutoStore system excels in optimizing throughput with its unique method of Bin preparation. Bin preparation is a process by which items are organized before they are needed, thereby reducing the time taken for actual picking when an order arrives. The system strategically utilizes "putaway" and "retrieval" tasks that are performed simultaneously to ensure that Bins are always ready for picking. This method of interleaving tasks ensures that the system is continuously operated at peak efficiency.

Read more: Learn how Yusen Logistics Increased Throughput by 1800% with AutoStore

AutoStore’s Robots are designed to retrieve and deliver Bins containing items to picking stations with precision and speed. While orders are being processed, the system is already preparing for the next batch of orders, shuffling Bins within the Grid to position them for quick access. This constant, dynamic reorganization of inventory means that the most demanded items are always within the quickest reach, a method known as "goods-to-person" picking.

Furthermore, the system is inherently scalable. Its modular design ensures it can be expanded both vertically and horizontally to match the growth of the business, and additional Robots can be added to increase throughput capabilities without the need for any downtime or restructuring. AutoStore's design also contributes to increased throughput by minimizing the space wasted on aisles, allowing more inventory to be stored in the same footprint. With more items stored within a reduced area, Robots can retrieve and deliver Bins much faster than traditional manual systems.

The system's efficiency and throughput are not only about speed but also about the accuracy and reliability of each transaction. By reducing the time spent on each pick and ensuring orders are processed correctly the first time, AutoStore minimizes the costly errors and rework that can slow down warehouse operations.

Conclusion

Optimizing warehouse efficiency is not a one-time project but an ongoing journey of improvement and adaptation to new challenges and technologies. By following the ten steps outlined above, businesses can create a robust framework for efficient warehouse operations. However, the addition of the AutoStore system takes optimization to the next level, enabling unparalleled improvements in space utilization, inventory control, and operational speed.  

As we have seen, each step of warehouse optimization, when supported by AutoStore's innovative technology, can lead to substantial gains in productivity and cost savings. In embracing these strategies, warehouse managers will not only keep up with the industry's rapid pace but set new standards for operational excellence in their facilities.

‍

FAQ

What are the four measures of warehouse efficiency?

The four measures of warehouse efficiency typically include inventory accuracy, space utilization, labor productivity, and order lead time.

What is warehouse efficiency?

Warehouse efficiency refers to the ability of a warehouse to minimize costs and time while maximizing the storage and flow of goods. It encompasses optimal use of space, equipment, and labor to fulfill orders accurately and promptly.

How to measure efficiency?

Efficiency in a warehouse is measured by evaluating key performance indicators (KPIs) such as order accuracy rates, inventory turnover, the total time taken from receiving to shipping, and the cost per unit shipped.

What is the best way to measure a warehouse?

The best way to measure a warehouse's performance is by using a comprehensive set of KPIs that reflect its specific goals and operations. These KPIs should include metrics on inventory accuracy, order processing times, costs of operation, and customer satisfaction rates. Regularly reviewing these metrics allows for performance tracking over time and identification of areas for improvement.