ERP Manufacturing Insights

Why Your Floor Plan Is Crucial to Warehouse Efficiency

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Why your floor plan is crucial to warehouse efficiency

Optimizing your warehouse’s layout is rarely simple. Thousands of factors come into play that have to be weighed and kept in balance. If you don’t have the luxury of starting from scratch, it can be even more difficult. Even a small warehouse often has trouble making the time and productivity sacrifices required for a full reorganization.

Nonetheless, it’s important to make improvements wherever possible, and identifying areas for evaluation is the first step. Here are six ways in which your warehouse’s floor plan can either aid or hinder your operational performance. 

Warehouse floor plan erp manufacturing
ERP software can help you manage space and inventory

1. Pickers need the easiest access possible to the items that receive the most touches.

The way your SKUs are slotted and arranged is key to improving the efficiency of your picking staff. For most warehouses, an effective layout is one that cuts pick times as much as possible by giving pickers easy access to the most commonly picked items.

An ABC system is one commonly used way to increase picking efficiency through smart layout design. SKUs that move the fastest and most frequently are designated in category A and placed as close as possible to the shipping and packing area. SKUs that move more slowly are designated in category B and slotted less prominently, while SKUs that rarely move are given category C and slotted in spaces that may take longer to access. In most cases, the productivity gains from increased speed in the A category will make up for any increased difficulty in accessing the C category.

This can be a good area of focus for businesses that don’t have the capacity to completely redo a warehouse layout. In fact, many warehousing authorities recommend regular reslotting to ensure that SKUs are placed for optimal picking speed. 

2. Smart organization is important for inventory management.

Your warehouse’s organization system should complement and streamline your inventory management system. (When possible, it’s preferable to have these elements designed and tested simultaneously.) Think of your layout as a series of channels that direct the workflows of inventory management. Are they operating smoothly?

Employees should easily be able to walk through aisles and have plenty of room to maneuver while taking inventory and pulling orders, and they shouldn’t have to climb onto racks and shelving in order to scan or pull items. Try to bring all of your elements into sync here. Your management systems, particularly distribution software such as ERP platforms, should be working alongside your layout, not against it. 

3. A well-organized loading dock is key for safe and efficient operation.

Inbound and outbound freight processes are common pain points for warehouse operations. The loading dock is one of the most common sites of warehouse accidents, and hurdles to efficiency often originate there as well. Many times, these problems can be traced back to suboptimal layouts.

Consider the effects of your warehouse’s layout on how you ship and receive stock. When inbound freight arrives, can it be quickly checked in and added to inventory? Does your dock have clear lanes that allow outbound freight to be loaded efficiently? Is your dock layout safe to operate any necessary warehouse vehicles such as forklifts? Asking these questions will point you to ways in which you can improve your loading dock’s layout to increase safety and productivity. 

4. Disorganized warehouses can present genuine safety hazards.

Your warehouse probably uses equipment such as forklifts and pallet jacks to manage your inventory. A warehouse layout that’s not optimized for their use can turn these important tools into dangerous risks.

Common layout-related safety hazards can include aisles that are too narrow for safe forklift travel and blind corners. Areas that aren’t properly zoned are another concern, as they can lead to too many employees crowding into a space that’s not designed to accommodate them. Even a layout that’s simply inefficient can create safety hazards by way of the need for an increased number of trips, increasing the risk of an accident. 

Disorder also tends to breed further disorder. Employees who can’t find the right place for an item might put it wherever space is available, leading to items where they shouldn’t be. That can lead to overloaded shelves, items obstructing aisles and other hazardous safety situations.

Erp warehouse efficiency software
Lean inventory systems can offer gains in productivity

5. Lean inventory systems often require good organization.

Is your organization using a lean inventory system such as just-in-time (JIT) inventory management or thinking about implementing one? These systems can offer considerable gains in productivity, but an optimized warehouse layout is a critical factor in making them run smoothly.

That’s because JIT and other lean inventory systems rely on ultra-efficient warehouse operations and inventory tracking to work. If your layout isn’t conducive to effective inventory management, it can create significant obstacles to correct implementation.

If your business is considering a radically different inventory system like JIT, reslotting your SKUs may not be sufficient to create the layout you need. You may need to dig in and reorganize your entire layout. If you’re going this route, make sure that you’re working with your IT and warehouse departments to harmonize your layout with any manufacturing ERP software or systems that you’re using. 

6. Unoptimized layouts can be obstacles to growth.

Finally, warehouse layout is often a key factor in determining whether a business can successfully scale its operations. Many businesses think they need more warehouse space as soon as they begin scaling, but the truth is often that they would be better off optimizing the space they already have.

Before your business goes looking for a new warehouse, take a look at your warehouse space utilization practices. Can you get more use out of the same space by increasing your vertical storage capacity? Could you implement distribution ERP software that can help you manage space and inventory (along with many other benefits)? Are you wasting space by keeping too many slow-moving items on hand? There’s no one-size solution, but there are many techniques your business can use to improve your organizational practices that require less investment than renting or buying additional space. 

Supply chain manager erp warehouse

A good warehouse floor plan is an investment. It requires time, planning and, often, considerable labor. These factors mean that warehouse floor plans aren’t something most businesses can radically alter overnight. But for your business to reap the productivity benefits, it pays to begin evaluating and strategizing now. 

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