Future of Commerce Blog

5 Tips to Improve Warehouse Management

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Inventory and warehousing facilities and technologies are a substantial investment for most retailers. The productivity and management of these processes have implications for every other part of your business and significantly impact your customers’ experience with your brand. Warehouse operations are notoriously labor-intensive, cost drivers for businesses. But instead of viewing them as a necessary evil, modern retailers are seeing their potential to maximize the value they provide. Here are five ways retailers can run their warehouses more efficiently:

1. Evaluate Your Operational Value Chain

Before you can begin optimizing your warehouse, it’s important to assess its current state. What are all the steps in your current warehouse system, and, more importantly, how are they connected and reliant upon one another? Mapping out your entire warehouse value chain will serve as your guide and launchpad for optimization.

2. Strategically Structure Your Stock Layout

Let’s start with the basics. By analyzing your order data and determining which items are most frequently ordered together, you can arrange them near each other to reduce picking time. Once your physical space is more organized, you can begin to think about automating processes with technology.

3. Increase Efficiencies With Barcoding 

Using barcodes in your warehouse reduces human error and provides added visibility. In a recent Stitch Labs customer survey, over 75 percent of respondents said the most frequent cause of an inventory or fulfillment issue was human error from manual processes. By scanning barcodes you can be confident what is being counted and/or picked is both the right item and is immediately recorded. In addition to quickly and efficiently processing orders, your warehouse employees can pick and pack for multiple orders at the same time.

4. Implement a System for Centralization

In order to support your growing business, implement tools that will help unify your team. Inventory management software like the Stitch Labs platform enables retailers and wholesalers to manage invoices, purchase orders, inventory quantities, and sales order data in one application. This centralizes information and keeps teams on the same page, which saves you time and money.

5. Analyze Warehouse Performance 

You can’t manage what you can’t measure. Once you’ve defined and implemented new processes and technologies, you’ll want to measure and track their progress to ensure they’re actually improving your warehouse’s productivity. Here are a few key warehouse performance metrics businesses should actively monitor:

  • Order Fill Rate: The number of items ordered versus the number of items shipped. Top businesses have a fill rate of 98% or higher.
  • Order Picking Accuracy: The percentage of orders picked without errors from either choosing the wrong product or quantity.
  • On-Time Shipment to Customer: The percentage of orders that shipped by the requested or defined date. Best in breed companies maintain 97% or higher on-time shipment rates.
  • Warehouse Capacity: Top businesses have over 95% of their storage space filled with products during peak seasons and an average of 91% warehouse capacity overall.

Once you’re measuring the effect of your new technologies and processes, you’ll get a better sense of how and where you can continue to optimize your warehouse operations. For more information on how Stitch helps improve your warehouse processes for maximum efficiency, check out Optimizing Warehouse Management, a chapter in our Ultimate Guide to Scaling Your Retail Business.

Megan Lierley

Megan Lierley is a content marketer focused on thought leadership and customer stories. When she's not writing, listening to podcasts, or exploring her native Bay Area, Megan enjoys traveling the globe in search of the world's best eggs Benedict.

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