4 Ways an Optimized Warehouse Layout and Design Can Improve Your Bottom Line
At the end of the day, your goal as a company is to make a profit from selling your product or service. Every business choice you make is intended to maximize your profit margin in the quickest, cheapest, and most efficient way possible.
Whether through modifying shipping procedures to reduce cost or adjusting the quality of materials to cater to a more high-end consumer, a growing company will typically focus on improving things outside of their immediate control to maximize their revenue. However, as business grows, so does the need for internal improvements so the business’s processes and individual employees can keep up with demand. Many companies will wait until it’s too late to make these internal changes, making it difficult to scale their processes with product demand and causing the company to shrink instead of grow.
An often-overlooked opportunity to improve internal processes and both employee and customer satisfaction is optimizing your warehouse layout and design. Improving your warehouse can also provide many opportunities for return on investment. In this article, we’ll show you just how much your warehouse can affect your bottom line.
1. Organize Your Warehouse Layout and Design to Prioritize Inventory
The most obvious impact optimizing your warehouse layout and design can have is improved organization. But how does the organization of your warehouse increase your revenue? The answer lies in a more efficient inventory system. The better the organization, the easier you can prioritize inventory and accessibility to more fast-moving products.
As business increases, your high-demand inventory will likely become a constant priority; however, your slow-moving product does not disappear. On average, 80% of your inventory will be slow-paced, and needs to be out of the way but still accessible. Designing a layout for your warehouse shelf systems that provides easy accessibility to both in-demand and surplus inventory, as well as using the right type of shelving that can withstand long-term storage of product, will allow you to move fast-paced inventory quickly and easily while also always having access to your slow-moving inventory when orders come in.
With a properly organized and prioritized warehouse layout, you can exponentially reduce processing time for new orders, allowing you to move more inventory faster, and ultimately sell more product.
2. Optimize Your Equipment Utilization and Navigation
Optimizing your warehouse layout and design isn’t just about organizing your inventory in the most efficient and accessible way possible. It’s also about organizing the flow of traffic within your warehouse. Employees will be using lifting equipment and moving around your warehouse constantly, and they will need room to maneuver not only themselves, but the inventory itself, both easily and swiftly.
When planning your warehouse floor plan, consider the optimal flow of employee traffic on the floor. Starting with how you have organized your inventory, how will your employees most often need to move around the system you have in place?
Also take into account the size, speed, and maneuverability of any equipment employees may require in order to stock and pull inventory from the shelves. If a forklift cannot easily get in and out of the aisles of your warehouse, your stocking and order processing times will drastically decrease.
Finally, factor in the location of your equipment storage area to ensure equipment is safely stored, but reasonably accessible when needed. Consider if you have a rush order, how fast can your employees reach their equipment to pull the proper products quickly and safely?
By applying these considerations to your warehouse layout and design, you can further increase your loading and unloading times for stock being stored for future use and new orders being filled, further increasing your product turnover rate.
3. Improve Employee Work Conditions and Labor Costs
Your employees are the most important part of your process and business. Creating a positive work environment where they can do their jobs with the least amount of interference is always beneficial to the bottom line.
By improving the organization and prioritization of your products and optimizing your floor plan to compensate for employee movement throughout the work day, you have already incorporated improved working conditions within your warehouse layout and design. You can continue to improve your employees’ experience through further organization methods.
With a new organization structure, an updated, easy to visualize, and easy to understand labeling system for your shelves and inventory is necessary to quickly help employees become familiar with the new warehouse structure. This makes employee training faster and daily activities easier and less stressful, improving employee productivity and reducing the need for overtime and retraining.
Finally, make sure you are considering proper safety measures and protocols when designing your warehouse layout. Ensuring the safety of your employees with properly positioned fire extinguishers, exit signs, and any other safety equipment and signage you may require for your particular space not only reduces the possibility of employee injury, but improves the subconscious trust your employees have for you as a company, which can decrease your employee turnover rate over time.
4. Enhance Customer Experience and Satisfaction
The benefits of improving your warehouse layout and design do not stop inside your warehouse’s walls. Even minor changes to your internal processes can have a significant impact to your customer’s experience with your company, impact which can make or break your customer relationships.
As we’ve already discussed, optimizing the layout and design of your warehouse can improve your processing time through a few different factors – your employees eagerness and ability to maneuver your warehouse and process orders, your optimal use of equipment, and your organization and accessibility to products. All of these updates reduce your order processing time and allow your customers to receive your products faster.
Your customers may also benefit from a better packaging process thanks to your new warehouse setup. Since your employees are saving time from storing and pulling inventory for orders, they will have more time to dedicate to a quality packaging process, ensuring your product is not damaged during delivery. The better you can make your customer’s experience, the more likely they will become repeat customers as well as refer you to others for your products.
Warehouse Layout and Design: Final Thoughts
There are plenty of active, direct ways you can increase your revenue and keep your business growing. But sometimes the less direct approach can wield just as great return on investment for you, not only in the immediate future, but over the long-term. In fact, these indirect, internal improvements can be the difference between your business continuing to grow and your business becoming stagnant.
Optimizing the layout and design of your warehouse can deliver many benefits to your company in the short and long-term, and more importantly can positively affect your bottom line. What ways can you begin to improve your warehouse to start seeing more income for your business?
Warehouse Layout and Design: Summary
- In order to increase revenue, many companies focus on improving products rather than internal processes and systems.
- Internal updates are often overlooked because they do not provide an immediate return on investment.
- Optimizing your warehouse layout and design will not only provide long-term increased revenue in multiple ways, it is vital to allow your business to scale with growing demand in the future.
- On average, 80% of your inventory is slow-moving and will need to be stored, but still be accessible when necessary.
- Proper organization of warehouse shelving, specifically to make fast-moving inventory always easy to rotate and slow-moving inventory still accessible is key to exponentially decreasing order processing times.
- Appropriate shelving that can handle high-load, long-term storage of products is vital to a good warehouse system.
- Manage the flow of employee and equipment traffic in your warehouse.
- Take into account the size, speed, and maneuverability of product-handling equipment when designing your warehouse floor plan.
- Figure out where you will store your equipment for easy but safe access.
- Employees are the most important part of a strong business.
- Your warehouse should be designed to make an easy, low-stress work environment for your employees.
- Make an easily visible and easy to understand labeling system for your warehouse shelving to reduce overtime, training time and stress for your employees.
- Incorporating safety features into your layout, such as easy to access exits and fire extinguishers, not only makes a safer working environment, but subconsciously improves your employees’ trust in your company.
- Warehouse improvements also help you provide a better customer experience.
- Decreased order processing time means your customers will receive their products from you even faster.
- Employees have more time to focus on quality packaging processes, ensuring your products will reach your customers in perfect condition.
At Specialized Storage Solutions, we pride ourselves on honesty, integrity, and service by helping you find the right warehouse solutions that will yield a positive ROI for your company.
To learn more about how we can help you maximize your warehouse’s operational efficiency and profitability, contact Specialized Storage Solutions today and ask about our Operational Efficiency Analysis. And be sure to check out our other blog posts on warehouse efficiency and optimization.