How to Improve Warehouse Efficiency

Every company understands the pivotal role that warehouse operations play in their organizations. When these operations run smoothly and efficiently, companies cut costs, and customers remain happy.

Warehouse efficiency is not just about having everything at their right place and ensuring that products roll out on time. It is more about maximizing the utility of the available resources to maximize productivity and save time.

All successful companies have streamlined warehouse operations, and all warehouse managers should make it a top priority that their operations run as smoothly as possible.

The efficiency of warehouse operations does not only apply to the titans of supply chain but also small warehouse managers. Every manager should be looking towards adopting the right blend of warehouse processes that will maximize efficiency and productivity in their company.

Tips on improving warehouse efficiency.

  1. Use all available space.

To improve the efficiency of a warehouse, you need to use your storage space effectively. Instead of increasing the square footage of your warehouse and incurring extra costs, why not utilize your vertical space. Using the space above will create more space for storage and other warehouse activities. The capital you would have used to acquire more space can be used to install sturdy, durable, and taller storage racks to store more goods in the same square footage.

  1. Embrace technology.

A lot of time is spent by employees in your warehouse, moving between orders and locating orders to be shipped. The average warehouse uses about 65% of its operating budget on labor, and about 60% of the warehouse’s labor cost goes to order picking.

Make use of the warehouse management software available to smoothen operations and significantly reduce overhead warehouse costs. For instance, an inventory management software would keep all product data, including the location of goods in the warehouse. Consequently, an employee who is trying to locate a particular product would be directed by the system to where it is stored, which significantly saves a lot of time and the employee’s energy.

  1. Manage your workforce.

Regardless of technological advancements, every warehouse must have employees working on picking or packing goods. They are the heart of all warehouses, and warehouses cannot function without them. These employees need to be motivated so that they can put more effort into their work in the little work time they have. An effective way of boosting employee morale and productivity is by offering them incentives.

Not only would you want your employees well-motivated, but you also need them adequately trained. A well-trained workforce ensures that the operations in your warehouse run seamlessly. This is because they are familiar with the supplier’s and customer’s needs, warehouse workings, and other pivotal operations in the workplace.

  1. Stay on top of your inventory.

Inventory management plays a key role in warehouse efficiency. Overstocking and dead stock usually lead to many losses than realized. It would be advisable that you put measures in place that will ensure that you have control of your inventory.

Embracing technology is one of the ways that you could control your inventory. As aforementioned, warehouse management software can allow you to check and track your inventory automatically.

  1. Manage incoming and outgoing freight.

Your warehouse efficiency is significantly affected by the way you manage your freight. Ensure that all goods to be received are appropriately planned for by communicating with the suppliers beforehand. This allows you to know the amount of cargo coming in and their arrival time. Accordingly, you can prepare for the receipt and storage of the incoming goods.

The proper management of freight enables you to prepare your goods for order and shipment quickly. Similarly, warehouses must manage their freight to avoid conflict in their schedule or products arriving a day when they are poorly staffed. With careful planning, you can manage your shipments and improve your warehouse efficiency.



Alex is a small business blogger with a focus on entrepreneurship and growth. With over 5 years of experience covering the startup and small business landscape, Alex has a reputation for being a knowledgeable, approachable and entrepreneurial-minded blogger. He has a keen understanding of the challenges and opportunities facing small business owners, and is able to provide actionable advice and strategies for success. Alex has interviewed successful entrepreneurs, and covered major small business events such as the Small Business Expo and the Inc. 500|5000 conference. He is also a successful entrepreneur himself, having started and grown several small businesses in different industries.