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Written by Derrick Weiss

12 Essential Warehouse Management Best Practices

Manage your warehouse effectively by following a dozen of the top best practices. From receiving procedures to inventory tagging to constant iteration, these tips will ensure that your warehouse is operating at peak efficiency.

Let’s be honest.

Nothing here is going to be brand new or groundbreaking. You’ve probably already implemented many of these best practices in your own warehouse.

But nobody is perfect. So what you’ll get out of this article is a quick reference guide for some of the top best practices for warehouse management, and what they mean for your business.

Warehouse Management Best Practices

Here’s a quick list of what to expect:

  • Don’t rely on manual input
  • Plan picking procedures
  • Reduce touch points
  • Make popular products easy to reach
  • Dedicated information sharing
  • One item, one SKU
  • Track your warehouse KPIs
  • Prioritize warehouse safety
  • Standardize vendor operations
  • Be prepared for emergencies
  • Allow 360 degree feedback
  • Iterate on operations

Don’t Rely on Manual Input

Human beings make a lot of mistakes. That’s totally natural. But we have a rich history of creating tools to help us be more efficient and do things we couldn’t do otherwise.

This includes inventory management.

Handwritten, typed, or any other kind of manual entry can be a disaster waiting to happen. Your team should have barcode or RFID scanners, and use some system that’s as simple as point and click to tag or scan products.

This should connect to your inventory management system to maintain a system of record for all inventory.

Plan Picking Procedures

How you pick is really up to you, but the process of picking should be standardized and easy to follow. In order to set up more streamlined picking procedures, you’ll probably need a warehouse management system to facilitate, but you should already be picking in batches or waves instead of as incoming orders come in.

If you can, assign resources to picking to maximize efficiency. But keep in mind, you’ll want to test this to find what works best for your operations.

Reduce Touch Points

Cutting down on the number of physical touch points that products have is a good way to remove unnecessary steps from your fulfillment process.

In some cases, this may be unavoidable, but every touch point that you remove will reduce potential wear and tear, and speed up the process in general.

Make Popular Products Easy to Reach

By performing an ABC analysis of your inventory and products, you’ll be able to define which are the most sold, highest value, and everything in between. Since the C products will be the most frequently ordered, make sure they are the easiest ones to get to.

It seems obvious, but oftentimes inventory is arranged by vendor, which isn’t as efficient.

Move the high volume items close to packing stations, and you’ll be able to cut down on time to fill orders.

Dedicated Information Sharing

We’re far past the days of having one system for every location, or even different systems for retail and warehouses.

Having a warehouse management system enables information sharing across the enterprise, retail locations, and to every stakeholder.

This is the ideal solution, because:

  • Visibility across the organization
  • Easy to track inventory locations and levels
  • Fulfill to or from retail locations
  • Single system of record
  • Connects to accounting or ERP systems

It also allows for a reduction in costs - since inventory is tracked or tagged the same way in every location.

One SKU Per Item

This may be difficult, especially with vendors, sales, and inventory functions. There may be a different SKU from the vendor, versus your internal SKU.

The ability to consolidate and manage skus effectively can reduce errors, increase inventory accuracy, and stop manual verification.

You will likely need an inventory management system to keep track of this, since it will be an automated process to consolidate SKUs.

Track Your Warehouse KPIs

This is a combination of fulfillment and inventory KPIs, which combined will give managers a good snapshot of how their processes are shaking out in the real world.

Monitor these on a regular basis - whether it’s weekly, monthly, quarterly, or annually  - depending on your business size and volume. You may find some need to be tracked on a much closer basis, and some can be set and forget.

Prioritize Warehouse Safety

This goes without saying, but warehouse safety makes a huge difference in efficiency of a warehouse. Meeting the minimum requirements is one thing, but this isn’t somewhere to cut corners or costs.

Safe warehouses have equipment that lasts longer, happier, more productive employees, and fewer dips in productivity. Taking the proactive approach also means employees are less likely to injure themselves, resulting in a lower overall cost of insurance and workers compensation.

Standardize Vendor Operations

There are a few key factors to managing vendors to create efficient receiving operations:

  • When they deliver (time of day, day of week)
  • How they deliver (packaging, boxes, volume)
  • Your receiving area and processes

Aligning these three factors can have your receiving operations humming productively. Vendors should have assigned windows for delivery, and almost always deliver products the same way. That might not be the case if the amount you’ve ordered starts increasing dramatically, but try your best to standardize this.

Be Prepared for Emergencies

You can’t control everything.

Whether it’s a natural disaster or a data breach, be sure to have a plan in place to handle the unexpected. Obviously, the more effort you put into prevention, the fewer of these emergencies you’ll have - at least the man-made ones.

Regardless, contingency plans are always better to have and not need than need and not have.

Allow 360 Degree Feedback

Great ideas don’t always come from management or executives.

The front line team might be able to identify areas of improvement that the higher ups simply don’t see. If this is the case, they need to be able to share that feedback with someone who will listen. On the flip side, managers may see many other parts of operations that employees don’t see.

Iterate on Operations

You’ll never be perfect, so don’t aim to be perfect. Aim to be a little better than you were last month or last year.

Always evaluate what you’ve been doing, how it’s going, and see if there is anything you can test or change.

If you’ve ironed out your best practices but are stuck trying to implement them in your system, consider SkuNexus. Our platform wraps around your processes, instead of forcing you to stuff them into a one-size-fits-all system.

Ultimate Guide to Order Management

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