A Complete Guide on How to Run an Efficient Warehouse 

More than 2.3 billion square feet (about twice the area of Manhattan) of new warehousing space will be required by 2035. 

That’s a huge area needing smart management to keep every process running smoothly. 

As your warehouse operations expand, managing an ever-growing inventory and ensuring efficient logistics becomes increasingly complex. 

In this blog, we’ll cover 5 innovative practices needed for running a successful warehouse.  

From using cutting-edge technology to optimizing layout and workflow, we’ll share the key strategies that can help your warehouse be prepared for future demands. 

By following these tips on running a successful warehouse, you can prepare your warehouse to meet future demands confidently and efficiently. 

Efficient Warehousing: Assessing Your Warehouse’s Performance 

An efficient warehouse is crucial for streamlining operations and boosting overall productivity in any logistics system. 
To determine if your warehouse is running efficiently, you can focus on the following three key areas:

1. Inventory Accuracy and Management

High inventory accuracy is a hallmark of warehouse efficiency.  

It involves conducting regular audits and reconciliations to ensure that the physical stock matches the recorded inventory data.  

Efficient warehouses minimize discrepancies, which helps in reducing overstocking or understocking. 

Assess your inventory accuracy to understand the level of your warehouse efficiency.

2. Order Fulfillment Efficiency 

Statistics show that order picking takes approximately 55% of total warehouse labor, and packing makes up an additional 20%. 

Efficient warehouses have streamlined picking and packing processes that minimize errors and speed up order turnaround.  

Techniques such as batch picking, or zone picking can be employed to optimize these processes.  

Measure how quickly and accurately your warehouse processes orders from receipt to shipment for improving warehouse operations. 

3. Space Utilization and Layout Optimization 

Effective use of available warehouse space is critical for improving warehouse operations. 

It includes strategically organizing products based on size, frequency of access, and compatibility.  

Warehouses often utilize vertical space with high stacking and innovative storage solutions like multi-tier racking systems to improve warehouse efficiency.  

See how how well you are utilizing your space and optimizing your layout.

5 Tips on Running a Successful Warehouse 

Running a successful warehouse is important as it shows the efficiency and productivity of your logistics operations.  

It involves more than just storing products; it requires strategic management, effective organization, and continuous improvement.  

In this section, we’ll explore five tips for running a successful warehouse that can help you optimize your warehouse operations, enhance performance, and reduce costs. 

1. Start With Optimizing Your Floor Layout 

Poor warehouse layout can lead to an increase in labor costs due to excessive travel time and inefficient picking paths.  This inefficiency often translates to higher operational costs and lower throughput. 

Optimizing the floor layout of a warehouse is essential for improving efficiency, reducing costs, and ensuring smooth operations.  

Here is how you can do that: 

• Use Vertical Space: Maximize the use of vertical space with tall shelving and racking systems.  
  It allows for more storage without expanding the warehouse footprint. Implementing mezzanine floors can also add additional storage levels. 
• Optimize Aisle Widths: Ensure aisles are wide enough for equipment and workers to move efficiently but not so wide that they waste valuable space.  
  Standard pallet aisles should typically be between 6 to 9 feet wide, depending on the size of the warehouse and the equipment used. 
• Assign Separate Areas: Create dedicated zones for receiving, storage, picking, packing, and shipping. This helps streamline operations and reduce congestion.  
  Use a Warehouse Management System (WMS) like Teamship integrated with automated picking and packing to optimize routes and minimize errors with dual-scan process. 

2. Optimize Inventory Management with ABC Analysis 

67% of respondents reported losing customers due to errors that led to overselling or being out of stock after orders were placed. 

Ouch! This highlights the crucial inventory rule: always maintain sufficient stock to meet customer demand.

One of the most effective warehouse improvement ideas is to use ABC analysis for inventory management. 

ABC analysis is an inventory management approach to categorize inventory based on turnover rates. 

Here’s how it works:

• A-Items (High Turnover): These are the top 20% of items that account for 80% of sales. They should be placed in the most accessible locations to speed up the picking process.
• B-Items (Moderate Turnover): These items make up 30% of inventory and 15% of sales. They should be stored in moderately accessible areas, balancing accessibility and storage efficiency. 
• C-Items (Low Turnover): These are the remaining 50% of items that account for only 5% of sales. They can be stored in less accessible areas to free up prime space for higher turnover items. 

By classifying inventory through ABC analysis, warehouses can focus resources on high-priority items and achieve better inventory control. 

3. Simplify Reverse Logistics 

With at least 30% of online orders being returned compared to only 8.89% in brick-and-mortar stores, efficient returns management in reverse logistics is crucial for maintaining warehouse productivity.  

Wondering how to improve warehouse efficiency when it comes to reverse logistics? 

Here’s how you can do that in three simple steps: 

• Centralize Processing: Designate a specific area for handling returns to ensure quick and accurate processing. 
• Automate Workflows: Use a Warehouse Management System (WMS) to automate returns and reduce manual errors. 
• Standardize Procedures: Implement clear guidelines for inspecting and restocking returned items. 

By simplifying returns management, warehouses can boost efficiency and enhance customer satisfaction. 

4. Automate Your Warehouse with a WMS 

Is your warehouse struggling with inaccurate inventory counts, inefficient picking and packing processes, or the challenge of managing multiple locations?  

Implementing a Warehouse Management System (WMS) can address these pain points effectively.

Curious to know how? 

• Improve Inventory Accuracy: A WMS provides real-time tracking and automated data entry, drastically reducing errors and ensuring precise inventory levels. 
• Optimize Picking and Packing: Automated task assignments streamline the picking and packing processes, making them faster and more efficient. 
• Centralize Warehouse Management: A WMS allows for the integration of multiple warehouse locations into a single, centralized system, enhancing coordination and oversight. 

With these features, a WMS can transform your warehouse operations, boosting efficiency, accuracy, and productivity. 

Reach out to us today to find out how Teamship’s WMS can do the same for your warehouse operations! 

5. Utilize Cross-Docking 

Eliminate unnecessary operations to boost warehouse efficiency through cross-docking.  

This method involves receiving goods and dispatching them almost immediately, minimizing or eliminating storage time.  

It ensures products are either housed briefly or not stored at all, streamlining the overall process. 

Find how out to optimize the cross-docking process: 

• Coordinate Scheduling: Ensure precise timing for inbound and outbound shipments to minimize wait times and streamline transfers. 
• Organize Docking Areas: Designate specific docking areas for different types of goods to facilitate quick and efficient unloading and loading. 
• Use Inventory Management Platforms: Use Teamship’s inventory management system for real-time tracking to manage inventory flow and improve coordination. 

Start following these tried and tested tips on how to improve warehouse operations and witness the magic yourself! 

How to Improve Warehouse Operations with Teamship? 

With labor costs accounting for 50% to 70% of a company’s warehousing budget, it’s clear that optimizing efficiency is important to control expenses and maximize productivity. 

Teamship is here to give you complete control over your warehouse operations with its easy-to-use platform. 

Our one-stop solution for warehouse management is designed to address common challenges and optimize your warehouse processes.  

Here are three key offerings that make Teamship the perfect choice for your business: 

• Manage Customer Warehousing: With Teamship, you can efficiently manage customer warehousing needs, from receiving inventory to order fulfillment.  
• Simplify Pricing with RFQ Wizard: Simplify and speed up the pricing process with Our RFQ (Request for Quote) wizard.  
• Use the Client Portal: Teamship’s dedicated client portal provides a centralized platform for your clients to manage their orders, track shipments, and access inventory information in real-time.  

See what we offer to both brands and 3PL/4PL warehouse operators to optimize their warehouse operations: 

Schedule a demo to see Teamship in action! 

Final Thoughts

As the warehouse industry continues to grow and evolve, staying ahead by adopting innovative solutions and continuously improving processes will be crucial for long-term success.  

By focusing on the discussed warehouse improvement ideas, warehouses can not only improve their current operations but also be better prepared for future challenges and opportunities. 

Frequently Asked Questions 

1. Which type of warehouse is best?

For wholesalers, distributors, and manufacturers, private warehouses are often a preferred choice. 

Although they are typically more costly than public warehouses, private warehouses provide business owners with greater control over their inventory management. 

2. What is a smart warehouse?

A smart warehouse utilizes advanced technology, including machines and computers, to perform tasks traditionally handled by human workers.  

This setup improves warehouse efficiency in storing raw materials and manufactured goods by automating common warehouse operations. 

3. What is the best warehouse structure? 

The U-shaped warehouse design is highly efficient. In this layout, inventory is organized in a U shape, with the middle section used for storage, and shipping and receiving operations conducted at the ends of the U.