How to Organize a Warehouse – Tutorial

Is a lack of organization preventing your warehouse from fulfilling orders on time? A poorly organized warehouse can interrupt pickers’ workflow, sending them long distances to fulfill high-demand orders.

In this how-to guide, we walk you through the process of warehouse reorganization. By the time you’re finished here, you’ll know exactly what changes you need to implement to get back on track.

Here’s What You Need To Get Started:

• Warehouse Blueprints
• Inventory lists
• Pencil
• Paper
• Racks, shelves, totes, etc.
• Labels
• Signage
• Inventory management software

Step 1: Create a Floor Plan with Dedicated Storage Space

A fulfillment business is only as great as its warehouse’s flow. Even the most successful warehouses can benefit from ongoing organizational improvements. Each warehouse must access its shortcomings on a direct level. It might be your picking routes, your shelving, or your pack faces that are holding back.

Since business demands are constantly changing, you must continually reevaluate your current layout plan.

Set Aside Storage Space

According to the experts at Big Rentz, only 22%-27% of your warehouse space should be stored. You can use simple math to calculate the amount of available space in your warehouse and multiply its height by its weight and depth to get the area’s square footage.
From there, you can determine how much space is needed for storage, receiving, fulfillment, and shipping areas.

Maximize Available Space

Take a look at your warehouse blueprints and your current warehouse floor plan. There should be designated spaces for:

• Administration (offices)
• Equipment storage
• Receiving
• Storage
• Packing
• Shipping

Now, map out how products flow from one designated space to another. There should be a clear path from receiving to storage, storage to packing, packing to shipping, and so forth. Keep in mind that the breakdown of your layout and pathways should vary depending on the type of inventory in your warehouse.

Achieve Uninterrupted Flow

You’re initial warehouse floor plan, and you should do flow charts on paper. Use a hard copy blueprint of your warehouse or, better yet, a 3D drawing program to create a scaled representation of the space you’re working with. Then, sit down with your warehouse operators and pickers to ensure that the plan will work well in real life.

Ask yourself:

• Are there issues with the locations you chose for storage, receiving, sorting, shipping, etc?
• Is there enough room for equipment ( e.i. forklifts, pallet jacks, robots) to travel through aisles without causing congestion?
• How long will it take pickers to move from one station to another?
• Do your storage systems make the best possible use of the warehouse space?
• Are there any potential points of congestion on the current plan?

Practice Makes Perfect
If possible, test out your new warehouse plan before actually implementing it. Set up a series of mock orders for pickers to fulfill. Are setbacks in space or fulfillment technologies preventing you from running a successful fulfillment business? Are you open to investing in infrastructure improvements? I so, go back to the drawing board.

Don’t Try to Replicate Another Warehouse

Keep in mind that there is no one-size-fits-all floor plan for warehouses. Instead, you must work to design a space that works well for your specific business model. You’ll need to factor in the types of inventory you are working with, the number of employees on the floor at any given time, and the style of fulfillment you’ll be using.

Use Your Shortcomings to Make Improvements

If you’re reorganizing, take care to acknowledge the shortcomings of your previous setup. Businesses need to organize their warehouses with their current customer demands in mind.

Whether you have one or 100 employees, your goal should always be to optimize warehouse flow. Reduced backtracking and overall travel to accelerated fulfillment times.

Post warehouse flow charts, like the one seen here, at the end of aisles. These charts will serve as a subtle reminder to new and experienced employees. Remember that you should only ever use graphic representations in conjunction with in-person training.

A simple employee poll may help you identify and rectify problem areas quickly. Remember, warehouse flow requires constant collaboration, and your pickers should shed light on some of the more subtle flow issues within the warehouse.

Factor in Demand Fluctuations

Most businesses experience seasonal or sale-based demand. Organize your warehouse so that you can easily rearrange products to accommodate current order trends. That may be as easy as having backup schematic profiles with pre-mapped product slot switches. All products in your inventory should be accessible at all times. However, you may also have separate storage space for seasonal products and buffer inventory.

Step 2: Selecting and Installing Racks, Shelves, and Containers

Next, you need to start dividing your inventory. Use racks, shelves, and containers to organize comparable products, shipping materials, and other supplies. Popular warehouse storage solutions include:

• Static shelving: Stays in place, used for manual picking
• Mobile shelving: Usually on tracks, used for manual picking
• Pallet racking: Static shelving, Used with forklift or pallet jack
• Multi-tier racking: Offers multi-tier racking for areas with limited floor space, used for manual picking
• Mezzanine Flooring: Another multi-tier setup that’s used in warehouses with limited floor space, used for manual picking
• Wire partitions: Used to separate one area from another, improved flow

Select Storage Units That Will Help You Maximize Your Available Storage Space

Now’s the time to start reimagining your storage options. Do not limit yourself to using just one type of rack or organization system.

Utilize surplus overhead space to stack large or less in-demand items. Consider installing multi-tier racking or mezzanine flooring to expand upon limited floor space. Then, use large plastic bins or totes to consolidate smaller items within sections.

According to Rack Express, popular storage bins include:

• Stacking bins
• Shelf bins
• Straight-wall containers
• Stack and nest containers
• Attached lid containers
• Detached lid containers
• Divided boxes

As your doing this, try to conceptualize and consolidate picking zones. For example, one aisle you may dedicate to heavier products that require forklifts and pallet jacks for picking, while another area you may designate for hand picking. Early problem solving will help you avoid traffic jams and safety hazards down the road.

Installing Your Chosen System

Choosing a new racking system is the easy part. While the racks and bins you selected may seem perfect for the inventory you’re working with, they also need to be a good match for their installation location. There are a lot of logistics that go into storage system installation and very little room for error.

It would be best if you accounted for:

• Local, state, and federal building regulations
• The dimensions of the installation area
• Hazards such as beams, pipes, and ceiling fixtures
• The height, width, and depth of shelving units according to their inventory loads
• The weight of inventory regarding shelving load capacity limits
• Space for safety equipment

Many warehouse operators hire full-service rack system installation companies (like this one) to ensure that they are not liable for zoning or safety issues. Of course, your decision to hire a third-party provider may come down to your budget or the overall scope of your reorganization.

Maximize Picker Access

Traditional warehouses are centered around the pick and ship model of business. Unfortunately, warehouse managers often underestimate the need for spacious aisles, and employees need room to simultaneously stock and pick from shelving.

At the same time, they need to gain quick access to the fastest moving products. ABC analysis or slotting is an inventory categorization technique that will help you classify and organize the items in your warehouse. ABC analysis divides an inventory into three categories, which include:

• A: 20% of items that account for 70% of your fulfillment
• B: 30% of items that account for 25% of annual fulfillment
• C: 50% of items that account for 5% of annual fulfillment

Once you’ve designated your fastest and slowest movers, you can use that knowledge to make an impact at the ground level. You’ll want to make your fastest moving products easy to fulfill, which means you need to position them for quick access, packing, and shipping.

You’re likely to face some apparent roadblocks when positioning large or backward products, especially those that require a forklift or pallet jack for removal.

Channel

If your warehouse fulfills orders from various channels, now’s the time for you to eliminate constraints and maybe even consolidate your fulfillment paths. Omnichannel warehouses handle orders from multiple channels, including brick-and-mortar stores and e-commerce. Channel consolidation improves warehouse productivity, but it requires dramatic warehouse reorganization.

Implement Signage

Once you’ve settled on a layout, you’ll want to rope in all of your employees to ensure they are using the system properly. While you’re at it, consider placing signage at the end of aisles, and this will make it easier for pickers to identify the inventory categories within each passage.

Workplace signs can benefit warehouses in many ways, including:

• Directing traffic flow
• Increase picker efficiency
• Increase visibility and awareness
• Increase worker safety
• Streamline fulfillment processes

Step 3: Engage in Warehouse Inventory Accounting

You’re going to need a reliable warehouse inventory accounting system if you want to stay on top of constantly moving products. Your system should let you know:

• Incoming inventory
• Outgoing inventory
• Location of each item

Labeling

Implement product labeling within the warehouse using a label printer. You may adhere labels to storage units, bins, or totes to make picking and fulfillment easier for your employees. These labels should coordinate with aisle signage and warehouse maps, and employees should have access to these tools at all times. Remember that signage and maps make it much easier for new or relocated employees to assimilate.

Step 4: Warehouse Maintenance

Generate daily, weekly, and monthly warehouse maintenance plans, and stick to them. Your diligence will help you create safer working conditions for your employees. Generally speaking, a cleaner, more organized space promotes productivity and success.

Many warehouses implement regular inventory checks or cycle counts. This data can help warehouse managers understand what they can do to improve their warehouse on an ongoing basis.

Consider cycle counts to be micro warehouse assessments capable o shedding light on the overall picture. If a cycle count turns up several inconsistencies within your tracking systems, that theme will likely repeat itself in other sections of the warehouse.

You can do cycle counting on:

• Control groups
• Random samples
• ABS Analysis

Tidy Your Workspaces

All employees should be implementing some universal end-of-shift cleaning process. It may include but is not limited to sweeping, sanitizing, and taking out the trash. Create a bulleted checklist that employees can run through at the end of each work session. It will designate accountability while ensuring that issues do not go overlooked. Depending on your productivity level, you may even wish to hire a designated cleaner who can oversee cleaning during business hours.

Declutter
You don’t need to do a complete Marie Kondo, be we do advise you to assess what items you use and what items are not. Discard or donate items that no longer serve you. These small acts will help you regain valuable floor space while making aisles safer for pickers.

Deep Cleaning

Don’t wait till your annual health inspection to tidy up. Regular and random warehouse inspections can help managers proactively identify and fix problem areas. Utilize iAuditor’s digital maintenance checklist to ensure that you do not skip over any critical maintenance needs.

• Areas are clean and tidy.
• All walkways are clear of hazards, including boxes and electrical wiring.
• The lights are in working condition, and replacement bulbs are easily accessed.
• Shelves, bins, and totes are stacked appropriately.
• Safety signage and first aid kits are installed at the end of each aisle.
• Additional emergency equipment (fire extinguishers, smoke detectors, emergency exit signs, eyewash stations, etc.) is up-to-date and placed appropriately.

Wrapping Up

There’s no doubt that an unorganized, inefficient warehouse will lead to missed shipping appointments and, ultimately, disappointed customers. Meaningful warehouse organization and maintenance may be the springboard your business needs to become more productive and profitable. Major supply chains and small vendors can implement these warehouse organization tips.

While it’s not always possible for an active warehouse to reorganize in the middle of a workweek, there are plenty of small yet meaningful steps you can take to improve your warehouse one day at a time.

Are you looking to implement change in your warehouse? Let us know your goals, and we’ll be happy to comment back with some advice.