An In-Depth Guide To Warehouse Productivity And Efficiency

Sharline Shaw

One of the least-acknowledged aspects of business flow nowadays but one of the most crucial parts is logistics, especially warehousing. Warehouses store a physical inventory of products that businesses provide for future sale or distribution. Industries that need bulk items use these to set schedules, organize, and ship at a later time.

Due to today’s heavy supply chain and business demand, warehousing has expanded significantly over the decades. Allowing bulk orders to be stored safely in these warehouses provides more efficient business dealing and a faster supply of the market’s demands.

Warehouse Productivity And Efficiency

Three Aspects In Managing A Warehouse

Managing a warehouse can be challenging, as you need a plan requiring proper skill, workforce, risk-taking, continuous innovation, and keeping the right connections. For a warehouse to function correctly and increase productivity and efficiency, you need to manage three significant facets—the management, the system, and the services.

Usually, the number of products that warehouses hold depends on the product type and the time of the year. Many businesses have a high volume of orders during peak holidays. The warehouses ensure proper inventory and stock prepared for these occurrences to avoid the mess and unavailability of products in the market and keep up with the demands.

To improve warehouse productivity and efficiency, you must address present or possible issues in the three critical points of warehouse management. That said, here is an in-depth guide on the three aspects you must focus on in managing your warehouse and some tips to improve these areas that would result in warehouse productivity and efficiency.

  1. Warehouse Management

One of the critical factors in successful warehouse management is its workers and their effectiveness. Even though modern technology is now in place to aid in this work environment, human workers are still the most efficient in doing these tasks. This need is why managing and staffing them are crucial in increasing productivity and efficiency. Here are some tips you can apply for effective warehouse management:

warehouse management
  • Have A Good Relationship With Suppliers And Third-Party Distributors

Without items provided by the suppliers, the business industry will not need a warehouse. A sound management system must keep proper and good connections with its suppliers so that they may consistently provide the warehouse with its demand. At the same time, ensure that the third-party distributors are reliable and practical to ensure a smooth flow of items according to the market demands.

  • Cross-Training The Workforce Instead Of Specialization

Some of the challenges that warehouse administrators encounter include finishing numerous tasks and reaching a daily productivity quota. Various tasks need a workforce to complete every day, and everyone’s work input is required to achieve a productivity quota. Chances of your workers needing a day off or leave are necessary. However, this can impact productivity as there is less workforce for a specific task. This scenario is where cross-training becomes essential. 

Suppose the workers are knowledgeable about different functions. In that case, they can take over in case of a workforce shortage, and the transfer can be possible. Also, cross-training increases efficiency as you will have more diverse workers. You don’t need to find an immediate replacement if a specialized worker leaves the work, saving you resources instead of rehiring. 

  • Gauge Worker’s Performances

To increase productivity, you need to recognize which workers are completing their tasks on time and doing work efficiently. Also, in the worst-case scenario, there may be a need to transfer or remove underperforming ones, which can affect the warehouse’s capacity and efficiency. These workers can cost profit losses and items in the process. Use an effective and fair evaluation system. Recognize your top-performing workers while addressing issues that underperforming workers may have. After this, settle for a proper arrangement to benefit the warehouse management and the worker.

  • Having Incentives For Workers

Workers need to meet a certain adequate productivity level for their daily jobs. This level is essential in ensuring the tasks they are assigned and the required task to complete in the requested timeframe. However, if the warehouse needs increased productivity, offering incentives for workers could be a good idea.

Incentives in workplaces, especially those with many employees, significantly increase the amount and quality of work input. Incentivizing those who manage to meet and exceed their needed work is most beneficial in holiday or in-demand seasons where a more considerable work input is necessary.

  • Safety As The Top Priority

Due to the large workplace, several items present, machinery, and people in a warehouse, accidents, and injuries are common, and warehouses should consider measures to avoid these and mitigate risks. Compliance with the local Occupational Safety and Health Administration (OSHA) regulations is a must, and ensure signs are in the whole place. Routine equipment checking and evaluation are also needed, especially for machinery such as forklifts. Most importantly, ensure that workers have specific and adequate training for their tasks and the proper knowledge of the possible risks and hazards in a workplace such as a warehouse.

  • Allow Feedback From Workers

Since the warehouse’s workers are the most hands-on in all the processes and tasks, be sure that their inputs are appropriately acknowledged. The warehouse management should recognize the opinions and comments and their ideas that can be helpful in more efficient and productive housing management. The workers are the ones that are on the ground with the process. They can provide input in detail that supervisors and managers do not usually see, from minor equipment adjustments to large-scale systems. Have a regular meeting or a drop box to hear and read their suggestions and recommendations, which the management can discuss and may implement if deemed possible and helpful.

  • Warehouse System

A warehouse should have an organized plan as to where each item should be categorized and where they should go, as well as other features such as accessibility and security. Since managing bulk items and ensuring they meet the market’s demands can be demanding, a warehouse should have a proper system. Some tips you can apply to provide higher efficiency include:

  • Use Proper Labelling Methods

Depending on the item supply, a warehouse can hold many bulk items of different ranges. With this, recognizing which is which can be tremendously tricky without proper labeling. Therefore, you should use a sequential system, and easy to read and find labels containing consistent letters and numbers. These labels should also include the areas, aisles, shelves, racks, packing, and shipping stations. This system can save time and resources, increasing overall efficiency and productivity.

  • Conduct A Selective Inventory Control Or An ABC Analysis

Implementing the ABC analysis is essential to know and measure which items are the most important to the least important. Since a warehouse can contain many items, transporting, organizing, and moving these now and then can be a tedious task without proper prioritization.

For category A, items should be the costliest and need accuracy in the control and handling. These usually have a minimal number of products. For category B, these items have moderate value and require average accuracy. They have a more significant volume than the first category. And placed in category C items that are low cost and need minimal control and accuracy. These are usually the largest in number, primarily in bulk. The ABC analysis allows the workforce and management to recognize which to prioritize and take care of.

  • Measure And Track Damage Rates In Items

Acquiring items’ deterioration is unavoidable in any operation, but these can cost the warehouse much injury. The management should first address and determine the source of the damage and the warehouse’s liability scope. If the damage is known to be beyond the warehouse’s scope, file necessary reports on this occurrence. If it is in the warehouse, an account is also needed, along with the details of the damage.

A check on the types of equipment, handling, and workforce performance is necessary to find where the problem arises and the cause of damage rates. By fixing these issues and keeping track of the damage rates in the warehouse, the management can measure the cost that can be deducted or fined, mitigating future occurrences.

  • Create And Maintain A Standard Process

Time is an essential factor that warehousing facilities need to consider, as specific deadlines in the market demand should be met accordingly and with the highest possible accuracy. Having a standard process that’s efficient and productive and maintaining this process can effectively save time, cost, and human resources for warehousing. Make sure that everyone is well-informed about this process; the task needs the amount of work input essential and the smooth flow of operations in warehousing.

  • Ensure A Secure System In the Warehouse

Since the primary purpose of a warehouse is to ensure that items are safe, organized, and ready to go, the warehouse should implement a proper security system at all times. After the things transfer from the supplier to warehousing, they are under the warehouse’s liability and security. Any damage or loss when the items are stored is charged and lies with the warehouse management. These occurrences can cause additional warehousing costs, less efficiency and productivity, and may even lead to losing a good relationship with the supplier.

A way to do this is to employ a human security system, such as guards stationed in the warehouse. The warehouse management can also install technological devices such as cameras, locks, and sensors. Also, ensure that the items are safe and secure from any possible damage they may encounter while in the warehouse.

      3. Warehouse Services

Most importantly, the purpose of a warehouse is to keep items safe and store them properly and efficiently to meet demands. A warehouse also needs to ensure that both companies and customers are satisfied with the product. To provide the efficient and proper service required from a warehouse, consider applying the following tips to improve warehouse services which in turn increases productivity and efficiency:

  • Recognize And Organize Cognitive Supply Chain

This process can be a tedious task if solely done by workers. Therefore, reliance on technology is needed. The cognitive supply chain is the analytical process of recognizing the market ecosystem, such as point-of-sale, inventory of the items, work-in-process, and inbound shipment, weather forecasts, social sentiment, and current market trends.

By being aware of the cognitive supply chain, the warehouse can recognize which items to prioritize and secure and know which are currently in demand. This knowledge allows them to define which needs proper control and direction from the supplier and the third-party distributor.

  • Optimize The Space In The Warehouse

The key to successful warehousing is efficiently utilizing the space given without sacrificing safety or considering expansion, which can be costly. Use as much space as possible while keeping in mind the limitations of your racks and areas needed in the aisles to pass workers and machinery and make every item accessible.

You can extend your racking vertically as long as the weight is still at a safe level. Also, slotting related things together limits the space they consume and makes it easier to access and pull them out. You can also add half-pallet locations for smaller items to be placed, saving more room for more oversized items. Remember that all of these should still properly comply with safety guidelines.

  • Implement New Aisle Systems

A warehouse can choose different aisle systems, and if the best approach is selected, it can significantly increase the productivity rate in the process. The I-shaped layout for high-volume warehouses is known to be the most efficient. It allows easy access to every item and saves proper space for a good workflow. The storage area is in the center, with the loading and unloading areas at the ends of the layout. L-Shaped warehouses are also widely used, with loading and unloading areas on both ends and storage in the middle. The U-shaped design is efficient for any warehouse, as the loading and unloading areas are next. A gap in the middle provides access for storage in the back part. Whichever aisle design the warehouse implements, correctly map it out first and ensure that the methods can adequately work for your system.


Managing a warehouse can be a monumental task. Still, keeping the flow efficient and productive is essential to allow companies and businesses to provide customers with the items and products they offer.

To adequately address issues and develop a warehouse, the management must consider all sides of warehousing. These methods include the administration or people directly working to ensure the process’s effectiveness. The system is also vital in providing an efficient and secure service, as well as the service or purpose of the warehouse itself, which is to manage and deliver the market’s needs by working with items from companies. Considering all these factors can aid in making a warehouse increase productivity and efficiency.

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Article by:

Sharline Shaw

Hey I'm Sharline, the founder of Leeline Sourcing. With 10 years of experience in the field of sourcing in China, we help 2000+ clients import from China,Alibaba,1688 to Amazon FBA or shopify. If you have any questions about sourcing , pls feel free to contact us.

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