8-Step Warehouse Organization Plan to Increase Efficiency

Warehouse organization helps businesses to productively utilize their stockroom space and maintain a smooth workflow. It also enhances employee morale, minimizes errors in the order fulfillment process, and prevents damages to inventory items.
These benefits will then help companies quickly meet their customers' demands and boost overall consumer satisfaction.
8-Step Plan to Increase Efficiency

To increase efficiency in the warehouse, management should implement an organizational system. Managers can do this by following the 8-step framework-
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1. Strategize the Warehouse Layout
By reassessing the floor plan, management can pinpoint where inventory, equipment, and tables should be located. Creating a strategic layout will allow the warehouse staff to navigate around the space safely and easily.
An organized and well-defined warehouse design will ensure accessibility to goods and maximize space utilization.
To examine the efficiency of an existing floor plan, warehouse managers should consider the two best practices-
- Review the Workspace
- Talk to Warehouse Staff
2. Utilize Storage Organizers

Depending on the type of business, warehouses can be made efficient with different types of organizers, such as shelves and racks. A proper storage system will maximize space and protect inventory from damage, which will further enhance the business's bottom line.
- Manufacturing
- Simple Manufacturing
- Traditional Inventory
3. Organize Inventory

Warehouse inventory should be organized based on how often it is used, moved, or purchased. For example, placing the best selling and popular stock next to the packing area will minimize the time staff would need to retrieve the item. Products that are less popular and are not frequently used can be placed on top of shelves or further back in the warehouse space.
To identify which stock to prioritize, managers can use the ABC analysis and categorize their inventory into 3 levels-
- Level A - Items that have high demand and have high-profit margins.
- Level B - Inventory that has moderate demand from consumers.
- Level C - Goods that are less important and have less demand, compared to A and B items.
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4. Have a Labeling System
Products, workspaces, and aisles should be well organized and properly labeled so that employees can efficiently navigate throughout the warehouse and locate the items they need. Placing safety signs are especially important to alert staff of loading zones and incoming forklift trucks.
5. Optimize Picking Processes

The picking process refers to identifying and selecting items in inventory to fulfill customer orders. Optimizing the process will ensure that orders are packaged accurately and customer satisfaction is maintained.
A method to streamlining the picking process is placing the packing area near inventory to minimize travel time. Order pickers can also utilize bar code scanners to speed the process of finding an item. These tools will scan stock-keeping units (SKU) to provide information on where the inventory item is in the warehouse.
6. Monitor the Receiving Process
To prevent delays in workflow, warehouse staff should be diligent when receiving purchase orders. This means ensuring that the right products were received and that the orders are in the right quantity.
Methods that managers can implement to optimize order reception are-
- Allocate Space - The receiving area should have enough room for employees to sort and check new shipments.
- Implement an Inventory Management System - Inventory management software with ordering features will allow users to monitor orders in transit, conduct inventory control, ensure their orders are correct, and send memos to suppliers when items are damaged or missing.
- Conduct Quality Control - Inspecting items once they are received will enable staff to identify any damage quickly. These defective products can then be set aside, ensuring that it will not be sent to a customer.
7. Frequently Clean the Warehouse

All work areas in the warehouse should be thoroughly cleaned and tidied by the end of the workday. To improve efficiency, supplies and equipment should also be placed back in the right places and any clutter should be removed from the floors and workspaces. This will allow staff to work productively and safely.
8. Review Warehouse Organization
Warehouse managers should reassess organization strategies to ensure that it is effective. It is recommended that management conduct reviews yearly and connect with employees to see if productivity was improved with the current organizational plan. This will give managers insight into whether or not any adjustments need to be made.
By implementing efficient warehouse organization strategies, management can make sure that their supply chain functions are operating smoothly and excellent customer service is being provided.
