A bonded warehouse is a designated space where imported goods can be securely stored without paying duty, taxes, and other fees for up to five years.
There’s more to running a warehouse than just piling inventory on shelves. The design of your warehouse can make or break your overall operational efficiency.
Warehouse layouts need to be optimized for clear visibility, smooth transfer of goods, and easy equipment accessibility. And no one design will work for everyone.
Most companies use one of three main warehouse layout styles. These layouts address items like the needs of different industries, the warehouse building size and shape, shipping and receiving volume, and budget.
So, what’s the best way to arrange your warehouse? Let’s dive into the options to help streamline your workflow and make the most of your warehousing space.
Here’s what we’ll cover:
What does warehouse layout mean?
Warehouse layout refers to both the physical structure of your warehouse and the many components within it. A proper warehouse layout also ensures workers have enough space to operate at maximum capacity, leading to a smoother inventory flow with less wasted time.
Warehouse layout design factors
There are several considerations for optimal warehouse design and workflow. You’ll want to consider all of them before deciding on the best space for your team.
Building a warehouse from scratch to custom specifications is expensive and time-consuming. While hiring a warehouse design expert to create a layout based on your requirements would be ideal, most companies need to work within a more limited budget.
Make sure to conduct a cost-benefit analysis and see which structures and equipment best fit your budget. You’ll also want to take existing warehouses into account. There might be an available warehouse space already on the market that’s a pretty good fit for your business needs. In many cases, warehouses for lease might already include some warehouse equipment like shelving.
Warehouse space needed
When planning your warehouse layout, how you divide the space determines your warehouse’s capacity and ability to store goods. For example, if you need to include office areas and break rooms, you’ll have less space to store and prepare inventory.
To maximize your warehouse’s storage capacity, make use of vertical space by stacking products. You can form clusters of products by grouping and stacking them together — which leads to quicker sorting later.
To operate at full capacity, warehouse equipment such as shelving, conveyors, forklifts, lifting and packing tools, pallet racks, and safety equipment are required. Forklifts, in particular, are one of the most important pieces of equipment for warehousing operations, and you need to consider this tool’s cost and the space it needs to operate as you design your warehouse.
In addition to the equipment moving around, you’ll need barriers to protect your inventory and workers. Barrier rails work great when combined with mirrors and bollards. After analyzing your equipment needs, you can evaluate the best-suited warehouse layout and go from there.
Understanding staffing requirements can help you estimate how many people you’ll need and shift timings.
It’s important to make sure your warehouse’s layout does not impede the movement and productivity of your employees. The layout should also be designed while keeping the future in mind — you should have enough space so new employees, products, and materials can be added comfortably down the line.
The safety of your employees is a prime concern. While designing your warehouse layout, ensure compliance with safety guidelines according to your local authorities and government.
This helps prevent both employee injuries and legal actions.
3 types of warehouse layouts for workflow
The three most commonly used warehouse workflow layouts are U-shaped, I-shaped, and L-shaped. Each style has benefits and drawbacks; let’s look at them in detail so you can determine the best possible structure for your needs.
The U-shaped warehouse flow
U-shaped warehouse flows are the most popular due to their simplicity and ease of replication. All the inventory is arranged in a “U” shaped semicircle, the middle portion (the bend of the “U”) is used for storage, and then shipping and receiving are performed at the ends of the “U.”
After receiving orders, products are placed in the staging or reception area to be sorted and then placed at appropriate storage locations. Storage locations are split into two categories:
- Static Storage is for slow-selling products that are more likely to sit on the shelves for a longer period of time.
- Dynamic Storage is for products with higher demand and turnover.
The “U” shape helps streamline inventory flow and keeps everything separate. By keeping incoming and outgoing shipments apart, the U shape also helps avoid bottlenecks.
Plus, because shipping and receiving are on the same end of the building, employees can swiftly move products between these two stages, and you may need less loading and unloading gear.
However, some people consider this a downside because the proximity of the entrance and exit can lead to congestion.
The I-shaped warehouse flow
The I-shaped warehouse flow is most often chosen by enterprise businesses that have larger warehouses. The I-shaped design offers a clear “in and out” view of product workflow for these bigger companies producing higher volumes.
In this layout, receiving and unloading are on one end of the warehouse, storage is in the middle, and the shipping area is at the opposite end of the building. The I-shaped design allows for a linear flow from receipt to shipment.
From a bird’s eye view, the flow is similar to an assembly line, which both helps minimize bottlenecks and reduces back-and-forth movement.
The most significant drawbacks of an I-shaped warehouse design are that two sets of loading and unloading equipment are needed, and products must travel the complete length of the warehouse. With products being accessed on both sides of the “I,” you may also need a larger operational space for equipment like forklifts.
The L-shaped warehouse flow
For “L” layouts, the receiving and unloading areas are on one side of the warehouse, and the shipping and picking areas are on an adjacent side, creating a 90-degree angle. The remaining space is then designated for storage purposes.
While “L” shaped warehouse layouts are often used to fit an “L” shaped building, that’s not the only benefit. Like the I-shaped flow, the L-shaped flow also reduces back-and-forth movement. It also separates the receiving and shipping areas on different sides of the warehouse to help prevent traffic congestion.
However, the downside of the L-shape is that it requires considerable space to run your operation smoothly, and you’ll still need two sets of loading and unloading equipment.
Best practices of warehouse layout design
Regardless of your chosen warehouse layout, you’ll need to optimize it to ensure efficient operations. Here are some tips you can implement to make the most of your warehousing strategy.
While finalizing the schematics of your warehouse’s design, you should make sure to get the most accurate measurements possible. You’ll also need to label each area of the facility according to its function. Keep in mind that a 2022 survey found the typical company only used 85.6% of its warehouse space.
Each workflow should be established from entry to exit. Once the workflow is designed, you’ll be able to understand how each function connects. After that, you can define the best work processes and train your employees correctly.
Optimizing picking processes
When you adequately plan your picking and packing workflows, you’ll be able to ship the right products to the right customers. There are several picking methods that you can implement to improve your processes.
- Batch picking consists of picking similar orders in batches, all at once. This method is faster than picking one order at a time, and it allows you to fulfill similar orders that include the same SKUs.
- Zone picking is when pickers are assigned specific zones and only pick orders from that area. Zone picking is commonly performed one at a time. If an order needs products that are outside a specific zone, a conveyor belt is often used.
- Wave picking is helpful for warehouses with more significant volumes of products with many SKUs, and combines batch and zone picking. In this method, the picker has to stay within the zone assigned to them, and they are able to pick multiple orders simultaneously.
- Discrete picking is often used in small businesses with fewer SKUs. Whenever an order is received, the picker retrieves all items for the order from different zones of the warehouse. This is time-consuming because pickers are only able to process one order at a time.
As always, you should select the picking strategy that best suits your business and your warehouse. Whatever method you choose, you should focus on maintaining high picking accuracy to reduce the risk of returns.
Ideally, it’s best to have picking areas close to storage areas — which can dramatically reduce the time spent to select ordered items. To increase the efficiency of the picking process, you can also install conveyors.
Improving warehouse accessibility
It’s crucial to place all necessary tools and equipment in spots that are easily accessible to your warehouse workers. There also needs to be enough space for equipment and staff to move freely along designated paths. This speeds up the order fulfillment process to deliver more quickly to customers.
Streamlining the shipping process
The shipping area is where final packing and preparation for shipping take place. Ideally, you want to keep this area separate from other spaces to avoid mixups. It should also be laid out so that staff doesn’t backtrack to complete steps in the process.
Keep best-selling products near shipping areas and products that don’t sell as well farther away. This helps minimize travel picking time and can be accomplished most easily with L- and U-shaped layouts.
Testing and collecting feedback
After finalizing your layout and warehouse flow, you should make sure to run tests and confirm that everything flows smoothly. Equipment like forklifts and conveyors should also be tested.
Allow the employees who will be handling the equipment to test it out and take their feedback into account. Since your picking team will constantly move around the warehouse, you should also work with them to optimize routes for faster fulfillment and less confusion.
You can optimize your strategy and determine the best possible configuration and processes based on feedback and test results.
Final step: Choosing a warehouse management system
Once you decide on your warehouse’s layout and flow, it’s time to choose your warehouse management system. You’d be surprised how much smoother your day-to-day operations and order fulfillment can become with the right management system.
A warehouse management system gives you a real-time view of your inventory’s performance and helps you significantly optimize your warehouse. In fact, 77% of organizations consider warehouse automation systems a crucial part of maximizing performance.
If you’re interested in implementing a warehouse automation system for your business, contact the Cin7 experts to learn more about how we can help.
Frequently Asked Questions
What is the most common warehouse layout?
The most common warehouse layout is the U-shaped warehouse. This shape is popular because it is easy to replicate and has a simple setup.
The U-shape also helps avoid bottlenecks by keeping shipping and receiving on opposite sides of the same end of the building while storage is in the middle.
What is the best warehouse shape?
The best warehouse design for your business really depends on a number of factors. Budget, inventory size and type, number of orders, safety requirements, and your warehouse space can all affect which is best for you.
U-shaped warehouses are good general designs that work for a large number of situations. I-shapes are great for large order volumes or the use of conveyor belts. L-shapes help reduce back-and-forth movement, which is helpful for large products and controlling traffic flow.
Fans of “The Office” may remember when Michael Scott placed golden tickets into five different boxes — promising a discount to customers who received the tickets. A successful tactic? Not really. But it is an insightful glimpse of the challenges of managing a warehouse.
Comedic mishaps are unlikely in a real-life warehouse, but mistakes are bound to occur. When managing thousands of products, delivery dates, and incoming stock, human error will occur.
Warehouse management systems are abundant in 2023, many of which are designed to fit the specific needs of different industries. Recently, advanced technologies specifically designed to address warehouse management issues have emerged. With a comprehensive and efficient warehouse management system, a warehouse operating at optimum levels is within reach.
Stay with us as we break down the different types of warehouse management systems, the benefits of a WMS, and explore a few of the best options to explore.
Types of warehouse management systems
All warehouse management systems seek to accomplish the same goal, but there are a few key types of warehouse management software, which include:
A cloud-based WMS refers to software that is hosted by a vendor instead of on a company’s server — meaning businesses can take a completely hands-off approach to WMS software since the vendor handles and fixes all bugs and errors that may arise.
Typically, businesses will pay for a cloud WMS on a subscription basis. If you opt for an on-premise solution, you’ll face a high upfront cost because you’re responsible for hosting the solution. A Cloud-based WMS tends to be more cost-efficient and time-saving for businesses.
Learn more about what a cloud-based WMS can do for your business.
A standalone WMS is a software solution that’s sole function is to optimize warehouse efficiency and generally lacks features that work to optimize other business processes.
A standalone WMS differs from broader ERP solutions and inventory tracking software that include warehouse management as a feature in a larger library of tools. If you only need a tool that optimizes warehouse management, then a standalone solution is your best choice. However, if you’re looking to optimize processes like inventory management or accounting, a more comprehensive solution will give you the most bang for your buck.
Integrated ERP or inventory management software
Unlike a standalone WMS, an integrated ERP or inventory management software (IMS) generally includes warehouse management as a feature within a larger suite of tools. Integrated ERPs or inventory management software will typically manage your warehouse processes alongside accounting, invoicing, shipping, and supply chain management.
Integrated ERP or inventory management software also gives you insights about your company at a more granular level. Since the software manages the order process end to end, it can help you make data-driven decisions about restocking and order management.
Supply chain modules
Supply chain modules are warehouse management systems that integrate with supply chain platforms to provide a big-picture analysis of logistics and supply chains.
With this type of warehouse management system, you can easily make warehouse and logistics decisions concurrently as you can view the processes together. As a result, you can optimize processes more efficiently.
Benefits of warehouse management systems
Warehouse management systems improve businesses’ efficiency by offering a few key benefits. Some of these include:
One of the most significant benefits of inventory management software and WMS is that they offer visibility into inventory from the second it arrives in a warehouse up until the moment it leaves. Through improved visibility, businesses can more accurately forecast demands and make data-driven decisions about different products — not to mention having improved traceability throughout the process.
Connection between inventory lifecycle
Every great inventory management process is rooted in connection. You need a product that integrates with all your processes to connect aspects of the inventory lifecycle.
If you’re using an ERP or inventory management software (IMS) that features warehouse management, you’ll gain holistic insights that allow you to optimize warehouse processes for success.
Accuracy is key in inventory management and warehouse management, and mistakes often get made when dealing with large quantities of inventory.
Warehouse management systems use automation to eliminate manual errors when logging inventory data, thus improving efficiency and creating stronger processes.
Better customer relationships
Perhaps the most underrated, but also the most important, benefit of a WMS is improved customer relationships. When you optimize warehouse management, you speed up order fulfillment and improve the accuracy of orders. As a result, you get happier customers who are more likely to buy from you again.
While some ERPs, IMSs, and WMSs may be pricey, the best software solutions should save you money in the long run. Warehouse management systems help you optimize warehouse space, make informed decisions about which products to prioritize, and identify perishable or date-restricted products that must go off the shelves first.
As a result, the right system will help you better manage your inventory and your space, thus reducing waste and overall costs.
Ability to scale
Growing companies should focus on efficient growth, and a WMS reduces time spent on manual day-to-day operations so you can think more about the company’s future.
Additionally, the best warehouse management systems scale with you, so they can adapt as your business grows. And with reduced time and money spent on warehouse operations, you can sell more at a lower cost.
5 Best warehouse management systems
If you need a warehouse management system, there are a few software you should consider immediately — if they make sense for your business. Here are five of the best warehouse management systems.
Cin7 provides comprehensive inventory management software with an integrated warehouse management system and WMS mobile app geared to help small and mid-size businesses with:
- Receiving shipment
- Packing products
- Racking inventory
- Picking products
With visibility into every aspect of the product life cycle, Cin7 customers can assure accurate order fulfillment for their customers while optimizing their internal processes. Cin7’s warehouse management software is mobile-optimized, so customers can scan products at every stop.
Price: Starting at $325/month
Start a free trial of Cin7 to optimize your warehouse management today
2. Oracle Warehouse Management System
Oracle’s WMS is a solid solution for enterprise companies looking for software with advanced features tailored to large organizations. Used by large wholesalers and retailers, Oracle’s product helps companies cut inventory costs, add new sales channels, boost productivity, and more.
Price: Available upon request
3. SAP Extended Warehouse Management
SAP’s Extended Warehouse Management software is a solid solution for enterprise companies looking to navigate complicated supply chain logistics and control large inventory volumes in their warehouse. Through automation, SAP takes most of the legwork out of manual processes.
Price: Available upon request
4. NetSuite WMS
Another strong option for enterprise organizations, NetSuite’s WMS aims to help companies eliminate monotonous manual processes so they can sell more, deliver faster, and reduce costs. Especially for companies with multiple warehouses, Netsuite’s software makes it simple to manage complex processes.
Price: Available upon request
5. Manhattan Active Warehouse Management
Manhattan’s WMS is constantly adapting to roll out new features and updates that adapt to the changing supply chain landscape. Manhattan claims to have a “unified” approach to warehouse management and gives customers control over fulfillment, labor, slotting, automation, and more.
Price: Available upon request
How to choose a warehouse management system
You should do careful research before investing in warehouse management software. Here are some key features you should look for when choosing a WMS.
- Warehouse automation: Automation and robotics are key factors in streamlining warehouse operations and ultimately reducing time and error.
- Mobile integration: Mobile devices allow warehouse workers to do their job much easier.
- Cloud-based: Cloud-based WMSs are also current with the latest technology to fix bugs and errors automatically.
- Scalability: The right WMS should scale with you as your company grows.
- Connectivity: Your WMS should connect with the rest of your inventory processes to eliminate waste and unify your systems.
Still have questions about warehouse management systems? We’ve got you covered. Here are some of the top questions and answers about WMSs.
What are the four types of warehouse management systems?
The four types of warehouse management systems are standalone, supply chain management modules, built-in to an ERP or IMS, and cloud-based.
What is an example of a warehouse management system?
Cin7 Core is an example of an inventory management system with built-in warehouse management, meaning that it contains warehouse optimization features within a larger suite of tools. The benefit of integrated software like Cin7 is that every feature integrates — so you can enjoy a unified approach to inventory performance.
What is the difference between WMS and SCM?
The difference between a warehouse management system (WMS) and supply chain management (SCM) is the scope of which they cover. SCM focuses broadly on the supply chain, while a WMS focuses specifically on managing a warehouse.
What does a warehouse management system do?
A warehouse management system is responsible for optimizing each part of the warehouse process, from when products arrive at the warehouse until they leave. The right warehouse management system should reduce time and costs and leverage automation to reduce manual labor and errors.
The future of warehouse management systems
An effective warehouse management system will help a business’s bottom line and lead to higher and more efficient productivity. Monitoring the latest trends and innovations in warehouse management is imperative to staying competitive in an ever-changing inventory management landscape, and the right WMS will ensure you never fall behind.
Start a free trial of Cin7 Core today and see how a partnership with us can help save you money, time, and effort.
Can you believe we live in a world where robots and humans work together? It sounds like the plot of a science fiction movie, but it’s actually happening. From large corporations to small businesses, the future of warehouses is automated.
Warehouse automation has shown stunning growth since the 2010s, as projections indicate the market could be worth $41 billion by 2027. We can attribute most of this growth to the e-commerce industry, and projections indicate those sales will reach $8.1 trillion by 2026.
But it’s not just e-commerce retailers who use warehouse automation. BMW, for example, optimizes its warehouse processes with Automated Guided Vehicles (AGVs) and inventory management software. Walmart recently invested in Symbiotic, a robotics and warehouse automation company, and plans to automate warehouses and retail locations over the next few years.
Warehouse automation uses automated technology to optimize processes, improve efficiency, gather data for insights, and minimize repetitive tasks for workers. More than robots, warehouse automation is made possible by automation software, Internet of Things (IoT) devices, automated vehicles, and even the blockchain.
As automated warehouse systems become the norm, businesses must stay ahead of market trends and technological developments. Basic knowledge of warehouse automation can help business leaders make informed decisions. In this article, you’ll learn the:
- Types of warehouse automation available
- Benefits of warehouse automation in business
- Challenges of warehouse automation
- Top warehouse automation trends
4 types of warehouse automation
Warehouse automation technology comes in many forms that you can combine in simple or complex ways. This spectrum of complexity spans from basic conveyor systems to advanced robotics integrated with AI technology. We want to provide a list of available methods by explaining the types of warehouse automation technology available in today’s market.
Receiving and shipping
Automation can’t change fuel prices, but it can improve the efficiency of outbound shipping and inbound receiving processes. These efficiencies can save businesses money and improve customer satisfaction by minimizing touchpoints and decreasing the Total Cost of Ownership (TCO). Here are a few leading methods in automating logistics:
- Automated inbound receiving technology: This technology combines automated versions of conveyors, scanners, labelers, and order verification to simplify inbound receiving tasks. A complex automated receiving system can move, identify, label, and verify all goods against the purchase order without requiring human labor.
- Automated outbound shipping technology: Outbound shipping automation can detect important labels (including human writing), detect damage, measure items for shipment, and ensure order accuracy. The shipment information is made available immediately through an integrated warehouse management system (WMS).
- Drones and delivery robots: Drones and delivery robots are changing last-mile deliveries. Customers can receive goods faster and without needing human labor in the shipping process.
Storage and retrieval
The physical act of storing and retrieving goods can be repetitive and dangerous for humans. Offloading these tasks can improve productivity while minimizing safety concerns. Goods-to-person (GTP) technologies can improve accuracy and efficiency when storing or retrieving goods. Be it for manufacturing or order fulfillment.
In one example, Kubota Canada recovered 83% of their floor space by using Vertical Lift Modules (VLM) and horizontal carousels in their distribution center. The benefits of their reduced storage were twofold: Their warehouse became more efficient, and they used the newly freed space for profit.
Available solutions are detailed below.
- Automatic storage and retrieval systems (AS/RS): AS/RS systems combine robotics and computer systems to augment storage and retrieval in a warehouse. The optimization of storage can increase the density of goods and maximize available storage space. The AS/RS category has many products, including vertical storage systems, horizontal carousel modules, and VLMs.
- Automated guided vehicles (AGV): These vehicles can carry loads and handle materials with little human input or operation. Companies will primarily use them within warehouses, distribution centers, assembly lines, and manufacturing facilities. In general, their movement is limited to fixed paths and rail systems.
- Autonomous mobile robots (AMR): AMRs are similar to AGVs, except that robots have the advantage of dynamic mobility. AMRs use advanced sensors and AI processing to adapt and redefine their paths in a warehouse setting. For this reason, they can work safely near humans.
- Exoskeletons: Exoskeletons are machine suits that augment a human’s capacity for work. They currently address gaps in automation, where a human is required to perform physically demanding tasks unsuitable for robots. Exoskeletons use sophisticated automation and sensors to improve a worker’s ability to lift and move heavy objects.
Picking and sorting
Picking and sorting costs can add up in the long run. According to the Georgia Institute of Technology, about 63% of a warehouse’s operating costs can trace back to order picking. Combining automated picking and sorting technology can decrease costs and increase efficiency.
Consider the following examples of picking and sorting automation:
- Collaborative mobile robots: Companies may program these robots, sometimes called “cobots,” to assist warehouse workers, and quickly augment manufacturing and warehouse processes such as assembly, handling of materials, and quality assurance.
- Automated sortation systems: These systems combine scanners with product handling technology such as conveyor belts. They can be fully or semi-robotic. Certain systems can apply labels, wrap packages, and more. Depending on the items and system, sorting capacity can range from 20 sorts per minute to 833 sorts per minute.
- Automated picking systems: This category encompasses a range of robotic and semi-robotic systems capable of picking, organizing, routing, and shipping. A high-speed system can accurately pick up to 450 items per minute.
- Pick-to-light: This automated picking system functions as a guide for human pickers. Pick-to-light uses LEDs and other lights to show exact pick locations. They can reduce overhead costs by minimizing inaccuracies, streamlining the picking process, and reducing cognitive load for workers.
- Voice picking and voice tasking: Just like the name suggests, these systems use voice recognition to augment the picking process for human workers. Workers come equipped with headsets that relay picking information to them hands-free. Workers can then respond verbally or communicate with the program using scanners.
Warehouse management systems (WMS) are the heart of an automated warehouse system. For example, robotic systems communicate with these systems as they receive, store, pick, sort, and ship goods within the warehouse. Warehouse management software can also integrate with third-party logistics (3PL) solutions and automate manual processes.
These systems can optimize warehouse storage space, calculate inventory, schedule purchase orders and deliveries, manage product demand fluctuations and returns, and integrate with 3PL.
WMS offer a range of capabilities using automation. Some of the main capabilities of WMS include:
- Cloud-based inventory management: Cloud-based systems are integral for modern warehouse logistics. Real-time management allows for automated inventory adjustments in response to fluctuating demand and availability. Their cloud-based functionality supports integration with robotic and automated warehouse systems.
- Reports and forecasting: WMS simplify forecasting by automatically pulling data from all available sources. These systems use automation to compile and aggregate data to streamline reporting and forecasting. You can optimize order fulfillment by using this quick and accurate data pulled in real-time from all warehouse departments.
- Order management and fulfillment: Automated order management systems can speed up fulfillment, replenishment, purchasing, and sales orders. Using real-time information, the WMS can send POs automatically when inventory reaches a certain volume. Branch transfers can automatically occur as determined by pre-set conditions.
- Built-in Electronic Data Interchange (EDI): Rather than using a third-party solution, WMS can support built-in EDI. This allows the automation of workflows, including order download, shipping, and the processing of invoices. Manual data entry can also be reduced by rule-based automation.
4 benefits of warehouse automation
Every business should consider how automation can benefit their particular use case. No two businesses are the same, so any automation must be onboarded with deep consideration. The warehousing industry has many pain points that automation can alleviate. Here are a few of those benefits.
1. Real-time visibility
One of the immediate benefits of warehouse automation is real-time inventory visibility. Cloud data supports visibility from warehouse storage to distribution and everything in between. A prime example is e-commerce, where response times and customer satisfaction are key to a successful business.
Knowing exact stock levels at all times allows businesses to:
- Accurately forecast demand
- Keep optimal stock levels
- Make quick decisions
- Create data-informed strategies
- Keep customers happy by avoiding stockouts and backorders
2. Reduced cost
Warehouse automation can reduce costs associated with just about every process and procedure. For example, optimizing storage and freeing up floor space creates new revenue opportunities. Up to 80% of basic shelving can be considered wasted space. Automation makes it possible to reduce this waste and recoup those costs. Labor productivity increases as humans work more efficiently alongside their automated counterparts.
Warehouse automation reduces costs by improving:
- Human labor and manual processes
- Reporting and forecasting
- Storage capacity
- Warehouse scalability
3. Reduced error
Automated systems reduce error significantly in comparison to non-automated systems. Human error is an inevitable factor in manual processes. According to a study by the University of Hawaii, manually updating inventory spreadsheets can lead to error rates as high as 86%.
Automated systems are not prepared to fully automate all aspects of a warehouse. But automation can greatly reduce error in certain areas. For example, automated storage and retrieval systems can increase the accuracy of associated tasks by up to 99.99%.
Overall, warehouse automation can reduce errors by:
- Minimizing the need for manual input
- Augmenting manual input with rule-based automation
- Reducing worker fatigue
- Supporting proactive decision-making with real-time data
4. Reduced risk of injury
Fatal work injuries in transportation and warehousing are some of the highest in any industry. There were 976 fatal workplace injuries in transportation and warehousing in 2021. Construction was number one, with just 10 more fatalities per year.
A study by the University of Pittsburgh showed that work-related injury rates were reduced due to the introduction of robotics. Other data in the study indicated a 4% decline in “physical job intensity” and a 5% drop in disability. Whether it’s picking or inventory management, automated warehouse systems can reduce manual work requirements and the associated fatigue. Workers can stay focused and avoid injury in a warehouse setting by reducing fatigue and cognitive load.
3 challenges of warehouse automation
With significant benefits come challenges. Many of these challenges occur in the early phases of automating a warehouse. Take stock of which challenges will impact your business the most so you can plan to address them.
Create an implementation committee to oversee the automating project. They can keep stakeholders informed, organize efforts, ensure regulatory compliance, and support a smooth transition toward automation.
We’ve outlined some of the main challenges associated with introducing warehouse automation below.
Integrating any new systems or technologies can be challenging, especially when those systems involve a lot of essential customer data. Furthermore, new technologies require training and a period of adjustment for teams.
For example, a business may want to stick with its enterprise resource planning (ERP) system if it already has a warehouse management system (WMS) feature. This feature may work now, but switching to a dedicated WMS is important for scaling with increasing complexity, and it will have more robust functionality than the ERP system’s WMS feature.
Small and medium-sized businesses can implement an inventory and warehouse management system much cheaper and faster than a traditional ERP. This solution combines inventory management system (IMS) and WMS technology with automation that is built to scale. Integration is important, and choosing an all-in-one solution can save time while reducing startup costs.
There is no simple solution when automating a process that involves many steps. Depending on the complexity of your warehouse automation, it can take 4-12 weeks of onboarding. During this time, your task force must pay close attention and prepare to remediate any issues.
2. Upfront costs
While warehouse automation pays off in the long run, the upfront costs can be significant. Average costs can range from $15,000 to more than $200,000 depending on the size and complexity of your operations. We’ve provided some averages for you to consider regarding your warehouse automation needs:
- AS/RS systems have varied costs, ranging from $70,000 for a Vertical Carousel Module and $1.5 million for Robotic Cube Storage.
- Robotic arms alone can cost anywhere from $50,000 to $80,000.
These solutions can be worth the investment when warehouse labor takes about 65% of most operating budgets. Budgets should plan for all upfront costs, such as the number of users, required peripheral devices, and installation costs.
3. Launch day
Some stress is normal leading up to a new system launch. Did we set it up right? Are there issues we aren’t seeing? Growing pains are common for any business that bravely enters a new territory. Organize your launch days thoroughly to mitigate any issues during this exciting phase.
Remember these best practices:
- Plan to monitor, test, validate, and potentially abort the launch.
- Budget for extra resources required during the launch phase.
- Communicate with vendors and make sure they are available to supervise during the launch process.
Establish automation committees well ahead of launch day. The committee can establish key metrics for validating processes and potentially aborting the launch. A dedicated party can communicate with multiple stakeholders and ensure everybody has the resources they need for a successful launch.
5 warehouse automation trends
The warehouse automation market continues to grow, potentially exceeding $69 billion by 2025. Warehousing is more predictable than other industries, like construction, which makes it a prime environment for automation. Here are some warehouse automation trends we’re seeing right now.
- Automated guided vehicles: The AGV sector is predicted to reach $9.18 billion by 2030. Autonomous vehicles are restricted now but have the potential to be highway ready in the future.
- Additive manufacturing: This application of 3D printing creates spare parts (and more) in an industrial setting. The market was valued at $16 billion in 2022 and is predicted to reach $94 billion by 2032.
- Blockchain: This technology creates a decentralized record of transactions that all partners in a supply chain can access. These digital ledgers can improve visibility, accuracy, and accessibility. The adoption rate for blockchain technology could potentially reach 45% percent by 2030.
- Internet of Things (IoT): These “things” can relay valuable data that leads to powerful business insights. For example, businesses can use IoT data for predictive maintenance, which reduces breakdowns by 70%.
- Cloud solutions: The reliability and scalability of cloud technologies show no signs of slowing down. The cloud automation market is predicted to reach $480 billion by 2030.
How do you automate warehouse processes?
Warehouse processes can be easily automated when they are repeatable and somewhat predictable. Warehouse automation technology continues to advance in ways that make it increasingly flexible, adaptable, and scalable. Whether you consider a robotic picking system or a cloud-based order fulfillment solution, it all comes down to your business needs.
A warehouse management system is one of the key components of an automated warehouse. No sophisticated system can rely on manually updated spreadsheets — you need a reliable WMS to connect all your order, inventory, shipping, and accounting workflows.
Take your business to the next level with Cin7 Inventory and Warehouse Management Software solutions.
The global supply chain is growing at a tremendous rate, putting pressure on wholesalers and retailers to get more mileage out of their warehouses. These giant storerooms must hold more inventory, and stock has to be processed faster. A good way of achieving this is by adopting a lean method of warehouse management.
What is the lean approach?
Developed by Toyota for its auto manufacturing plants, the lean approach is all about paring processes down to a minimum, leaving only what’s necessary and essential in place. When applied properly and strategically, a lean approach can significantly reduce costs. It can also improve customer satisfaction.
What is lean warehousing?
Just as the lean approach cut out anything unnecessary in Toyota’s manufacturing plants, in a warehouse, it means having the least amount of inventory to satisfy demand while streamlining processes to ensure there are no extra steps.
In addition to reducing overall cost and increasing efficiency, lean warehousing also leads to more accurate control over inventory. With such control in place, the whole supply chain runs smoother and more efficiently, and customers get their products in good time.
Here are a few more ways lean warehousing helps retailers and wholesalers:
- Provides better visibility into warehouse activities,
- Enables quicker decision-making,
- Reduces lead times,
- Improves operational efficiency,
- Ensures the accuracy of data, and
- Reduces unnecessary inventory.
How does the lean approach reduce waste in a warehouse?
Less wasted inventory
With the lean method, a warehouse stocks a bare minimum of inventory, holding only what’s going to be used or sold in the near term. As a result, there’s less chance of a company being left holding stock it can’t sell.
More cost-effective transportation
Here, the lean approach means finding direct routes when making deliveries. To meet customer expectations, transportation should be aligned with customer service so the entire transportation process becomes smooth and cost-effective.
Efficient flow of inventory
The route taken by inventory in a warehouse should be the quickest and most effective. This route goes from collecting the items to getting it to the packing department and the packing process itself. In other words, every time inventory moves from one area to another, it should only be in the service of the actual fulfillment process. This also eliminates the time inventory sits in the warehouse.
A system is overprocessed when it has steps in it that have no direct purpose. Those steps are a waste. By applying lean warehousing principles, the whole process can be analyzed and tracked to ensure that every action taken is there for a reason: to fulfill orders as fast as possible.
No more paper
Lean principles make the warehouse go paperless. That means no paper pick tickets, packing slips, or other such paperwork. Lean warehousing shifts all these forms to electronic devices like cell phones, computers, and tablets. This can lead to big savings over time, while cutting down manual errors.
What are the five S’s of lean warehousing?
There are five practices that have to be paid attention to with the lean method. Each is equally important, and each begins with the letter “S.”
This is about stock control, making the best use of the inventory. You should:
- Remove damaged, outdated, surplus, broken and defective stock from the warehouse.
- Only move inventory around the warehouse when it’s necessary.
- Automate inventory control, logging it in and tracking its movement with electronic devices like scanners.
When you’ve sorted out the stock, you have to make sure it’s organized in the best way.
- Place frequently used items in areas that are easy to get to.
- Clearly label the inventory, and tag everything.
- Put up signage that clearly shows where everything is and gives directions to get to it.
This is about the whole facility being clean and tidy. When the warehouse is well-maintained, efficiency is increased and accidents are reduced. When applying shining, you need to do the following:
Have the warehouse cleaned after every shift.
- Maintain hygiene in the warehouse.
- Place garbage cans everywhere to prevent littering.
In a warehouse, all employees and managers should follow the same procedures to ensure the warehouse is run well. Warehouses are standardized in the following ways:
- Set standards and clearly defined processes that help weed out ambiguity.
- Make all the standards easily accessible to the staff.
- Translate processes and procedures into simple pictures, and place them visibly around the warehouse.
Sustaining means making sure good operational procedures and processes are continued over time. Here’s what you need to do:
- Implement behaviors and habits that will maintain standards in the long run.
- Frequently evaluate success by conducting regular audits and reviews.
- Follow up on creative ideas from the employees, and use them when they’re good ones.
Make your warehouse lean with Cin7 Omni
If you’d like to introduce lean practices into your warehouse, take action and get in touch with a warehouse management team that knows the method inside out. At Cin7 Omni, we’re confident in our ability to streamline your warehouse processes and can help you implement all of the five “S” operations.
Reach out to our team today, and let us help you eliminate warehouse waste, cut down overall costs and optimize your warehouse operations. Book a demo with our experts now! We are all eager to assist you.
A manufacturer’s inventory is its lifeblood, the basic ingredients for whatever is being made. When it comes to storing materials in the warehouse, there has to be enough materials on hand at all times, and they have to be in good condition. If these requirements aren’t fully met, a factory could shut down. Therefore, managing inventory in the warehouse well is incredibly important.
Warehouse inventory management is part and parcel of inventory management. Both involve overseeing and controlling stock and its levels, but whereas inventory management concerns the entire supply chain from ordering to delivering, warehouse management is about just the inventory in the warehouse. Let’s look at eight practices for streamlining inventory management in a warehouse.
8 practices to streamline inventory management in the warehouse
1 Have a floor plan that promotes efficiency.
The overall design of the storage facility is a critically important factor. The layout will determine how staff and machinery maneuver the space, as well as how items are placed in, and removed from, storage. When the floor plan is a good one, inventory can be moved in, out, and around the area in a simple, free-flowing stream; when that isn’t the case, bottlenecks and errors can occur.
There are three basic designs for warehouse layouts:
- L-shaped: Here, storage is on the long side while a loading/unloading dock is situated on the smaller adjacent side.
- U-shaped: The ends of this shape are reserved for loading and unloading respectively, and the long curved area is used for storage.
- I-shaped: Basically a long oblong, a loading and unloading dock is placed at one end and the rest is taken up with storage.
These three floor plans have come to be recognized as the ones that work best for warehouse design over time. This isn’t just because they’re good for flow; however, the efficiency they create is reflected in the bottom line.
2. Organize the storage space with flow in mind.
What we’re addressing here is the frequency with which items are needed, and using that measure to gauge where best to place them. You have:
- Fast-moving items: These are the ones that are most in demand.
- Slow-moving items: They’re used, but not very often.
- Non-moving items: Rarely used, or no longer needed.
For the most efficient placement, fast-moving products should be placed near the front and be as easy to get to as possible, while those used but less in demand can be further back. High racks and difficult-to-access areas can be reserved for those non-moving items.
3. Track inventory accurately.
Knowing exactly what you have in storage is the core of good warehouse inventory management. While it’s relatively easy for small companies to keep on top of this, it becomes increasingly difficult for businesses as they grow. For them, technology is a necessity.
Inventory management systems (IMS) use barcodes and QR codes to track inventory. QR codes can hold much more information than barcodes. In addition to storing information about a product, QR codes know exactly where each item is stored, so they are much better for larger facilities. An inventory management software like Cin7 Omni, can maintain an accurate record of warehouse stock, letting you know exactly what’s there and tracking it as it moves in and out the storage area. This is the kind of information you need to manage the inventory on a daily basis.
4. Hire a warehouse manager you have confidence in.
The importance of the warehouse manager cannot be overstated. They don’t only oversee the pool of staff that works in the warehouse, they’re in charge of the inventory itself, making decisions every day about where to store it and when to move it. If they don’t do this in the most efficient way possible, goods can be damaged and extra costs can be incurred.
Warehouse managers should be tech-savvy. They need to be able to operate the software and handle all the automation and machinery that moves the inventory around from robots to forklifts.
5. Put a good workflow in place.
The workflow in a warehouse starts the instant inventory is brought into the building and ends the moment it leaves. It covers all the processes involved in moving the items around, including administration. Individually, warehouse workflows depend on the design of the facility, the product, and frequency of its use. Warehouse flow is usually the province of the warehouse manager. He or she will make the decisions about how and where inventory is stored and when any of it should be moved.
A well-thought-out plan will ensure unheeded flow of the inventory and make the best use of workers’ time. Like any business plan, though, workflows should be revisited often so that updates and tweaks can be made in response to any changes.
We’ve already discussed the benefits of using inventory management software to keep tabs on stock that’s in the warehouse and know at all times exactly what’s in storage. But these IMS systems can actually do much more. They can:
- Register goods as they’re received,
- Classify the goods,
- Direct where the goods should be placed in warehouse,
- Note where goods are stored and keep track of their quantity,
- Instruct how to make the best use of the storage space,
- Track the goods as they move around the warehouse,
- Store and issue shipping instructions,
As mentioned, Cin7 Omni is a good way to automate. As a complement to the functions listed here, the software will increase the speed, accuracy, and security of the inventory management process. It also reduces the employee workload, including that of the warehouse manager, leaving them free to take on other tasks.
7. Have visual oversight of the facility.
Theft, unfortunately, is a fact of life, and the possibility of it happening has to be taken into account when discussing inventory management in the warehouse. One way to stop theft is by putting up closed-circuit surveillance cameras and security systems like alarms. Letting only essential workers into the warehouse space and having them sign in and out when they report for work and go home can also be a help with this problem.
8. Carry out regular inventory audits.
Even when the inventory in your warehouse is automated, audits are necessary. In addition to checking to see that the information in your financial records tallies with the records you’re keeping on your storage space, audits are a great way to point out items you don’t need to keep any longer. These could include items that have been there for so long, they’ve gone out of style and can’t be used, or, for food, have passed their expiration dates. Apropos of #7, theft, an audit will also throw into sharp relief goods that may have “walked.”
A critical factor in warehouse inventory management, audits can be carried out internally by a member of management or externally by an outside agency. Either way, when conducted regularly they ensure that the records kept on inventory are as accurate as possible, and that, in and of itself, is a major cost saving for the company.
The bottom line
The way inventory is managed in the warehouse has repercussions both for the efficient handling and tracking of the stock and the bottom line of the company. We’ve laid out eight aspects of inventory management and have suggested measures that can be put in place to get the system working at its best. Hopefully, you’ll find them helpful in streamlining your system.
We think you’ll find Cin7 Omni a good tool to achieve this. To find out more about how the software can improve inventory management in your warehouse, click here to book a demo.
Warehouses can be hazardous. First, the items they hold are stacked high and close together to make the best use of space. Second, a lot of pickers and machinery are going back and forth between the aisles and up and down the storage bins all the time. If the items haven’t been stored properly, if a worker is careless, or if a machine malfunctions, an accident can happen.
To prevent this, there should be strong safety measures and procedures that everyone should follow, and they should be enforced. We’ve honed them down and categorized them into seven main areas.
7 measures to take to ensure safety in warehouses
#1 Keep all spaces clean and tidy.
Dirt, grease, or messes of any kind can be a hazard. Workers could slip on them, and machines could stumble. At the very least, if these obstacles don’t cause a bad accident, they could severely affect workflow in the warehouse.
It’s important, then, for floors and work areas to be kept as clean as possible, which means not just sweeping, but washing them frequently. Any spills should be swept or wiped up immediately; and if any of that spillage could be from harsh chemicals that are being stored, having a special spill kit that can deal with it on hand is imperative.
Hygiene is also a factor to take into account, especially when Covid is still around. Have hand sanitizer prominently placed in several areas, keep all equipment clean, and request that your employees stay home if they feel ill.
#2 Provide regular safety training.
While safety training for new employees happens frequently, it’s just as important for existing staff to review safety precautions regularly. Safety training should cover everything from ensuring work spaces and equipment are kept safe to instructions on actions to take when anything goes wrong or an unforeseen emergency happens. Providing training every three or four months is ideal. It’s also a good idea to distribute a safety manual to your workforce.
In addition to making everyone aware of safety in the warehouse, all employees should know what to do in an emergency like a fire or an earthquake. Training and drills should take place on a regular basis. It’s also important to have exit routes clearly marked and accessible at all times and to have enough of them in the building for the size of the space.
#3 Put up clear signage.
Signs that warn about potential hazards are essential. These signs should let employees know where dangerous or inflammable materials are stored, if heavy equipment is nearby, or even which items in storage are heavy. When it comes to the building itself, letting everyone know about design elements that could trip them up, like steps at the end of an aisle, is a good idea.
Since warehouses are more often than not huge spaces in which one section looks the same as another, finding your way can be a challenge in an emergency. To overcome this, there should be large signs with bold lettering that point to emergency exits.
#4 Have the right safety equipment.
Proper safety gear, like lifting belts, should be provided to ensure your employees’ well-being. Depending on the type of material your workforce has to handle or the conditions they’re working in, other forms of safety equipment, such as respirators or hearing protection, might be needed. Utility knives with protective sheathing and walkie talkies also come under this category, the latter being especially needed in ultra large warehouses.
On a wider level, fire and smoke alarms should be adequately placed, along with fire extinguishers. If your company handles hazardous materials, your fire extinguishers should be the right ones for whatever the materials are. And, of course, first aid kits should be available in easy-to-locate areas.
All safety equipment should be checked regularly.
#5 Give out protective clothing.
Here we include safety goggles, safety vests, safety gloves, hard hats and even steel-toe boots. Protective clothing should be a good fit for the individual worker. Loose clothing could get caught in machinery, and a badly fitting hard hat is no use to anyone.
#6 Ensure heavy equipment is used correctly.
Forklifts and pallet jacks could cause serious injury if not handled correctly or if someone gets in their way. Make sure heavy equipment is only operated by properly trained personnel, and that the equipment has its own pathways in the warehouse. Equipment should be restricted by a speed limit that is enforced.
#7 Store items properly.
Warehouses store items on high shelving where they are packed tightly together. To prevent anything from falling and causing injuries, everything should be placed with care, one thing stacked straight on top of another, and heavier pieces should be stored on lower shelves.
Make the most of your warehouse with Cin7
When you put recommended safety measures in place, you’re less likely to have downtime caused by injuries. Plus, your workforce will feel much safer.
To optimize warehouse operations even more, there are warehouse management systems (WMS) like Cin7. This software helps organize your warehouse, which helps you maintain a safe working environment.
To find out more about Cin7’s WMS and how it can make your life as a warehouse manager easier, book a free consultation with one of our experts.
When managing a warehouse with thousands of products and having to determine and organize inventory, monitor delivery dates for incoming stock, and ensure the correct delivery schedule, human error is all but certain to occur.
Thankfully, new technologies have emerged that are designed to specifically address warehouse management issues. With a comprehensive and an efficient warehouse management system, a warehouse operating at optimum levels is within reach.
Defining a warehouse management system
A warehouse management system manages and controls all activities, such as shipping and receiving, picking of goods, and inventory control, within the warehouse. Having such a system increases efficiency across all warehouse operations and inventory management, making sure products are handled until they are delivered or sold once they enter the premises.
What is a warehouse manager responsible for?
Warehouse management operations are complex and require attention to detail to keep business operations running smoothly.
The most common tasks that warehouse managers undertake include but are not limited to:
- Managing and optimizing warehouse space,
- Accurately calculating inventory,
- Scheduling deliveries and purchase orders,
- Managing fluctuations in product demand,
- Managing return orders and damaged goods.
There are many more responsibilities that warehouse managers must perform, but, thanks to technology, warehouse management can be more automated and precise.
Future of warehouse management system
1. Warehouse management robots
The warehouse management robot is a classic example of an automated system, and they ease labor-intensive jobs to a great extent. From transporting goods from one panel to another to streamlining the warehouse operations, warehouse management robots seemingly do it all. They save time, energy, and help eliminate human error.
There are various types of warehouse management robots, but ones designed for picking, packing, and storage are:
- Collaborative robots (“cobots”),
- Articulated robotic arms.
Note: In fact, cobots also come with sensors that help them smoothly navigate a warehouse.
2. Drones for warehouse management system
We have seen drones being used at large functions such as weddings and corporate events.
Drone technology has improved so much that it can be used as a modern world application in warehouses. Drones are known to complete warehouse activities 50% faster than people can. The drones scan and record each barcode on every panel, capturing their product details, location, and relevant information.
As a result, organizations save a lot of time and effort by properly utilizing drone tech.
3. Smartphones for warehouse management system
Smartphones for warehouse management are also known as mobile warehouse management systems.
We have seen technology progress in the past couple of years, from tracking inventory through paper and pen to using computers (and then laptops). But now getting things done on the go is possible because of smartphones.
We can do all kinds of work with the help of our smartphones, like scanning QR codes, capturing data, tracking inventory and productivity, and installing workforce applications to unburden the working process.
This way, you can always track the most recent information, receive real-time updates, and have the warehouse management operations at your fingertips.
4. Real-time inventory management for warehouse management system
Real-time inventory management is an integral component of a sustainable and robust warehouse management system. With instant access to data on inventory, picking, packing, and shipping, an organization gets a clear picture of incoming and outgoing inventory, damaged goods, returned goods, and customer reviews. As a result, they know what products to order and when to order them, keeping the inventory flow running smoothly.
5. Wearable devices for warehouse management systems
Small, computerized devices fitted on the arms or wrists for easy accessibility is another area of innovation that enhances any warehouse management system.
What these devices lack in size is more than compensated for in robust software, voice recognition, and even Bluetooth applications. They help with the picking and sorting of goods, entering prices, and scanning products.
These wearable devices help with inventory management and increase productivity and efficiency along the way.
6. Smart forklifts and automated vehicles
Smart forklifts and automated vehicles have been a welcome addition to warehouses and organizations. Smart forklifts and automated vehicles have the ability to place the goods on their designated shelves and pick the assigned items from their allotted spaces for deliveries.
Like wearable devices, they have rapidly reduced the need for human resources and manual assistance, thereby ensuring smooth day-to-day warehouse operations.
Effective warehouse management will only help a business’s bottom line. Higher and more efficient productivity will improve profits.
It is imperative to monitor the latest trends and innovations in warehouse management. Doing the due diligence will help companies to better distribute their workforce and resources and concentrate more on generating revenue.
Get a demo of Cin7 today and see how a partnership with us can help save you money, time, and effort.