Setting Up Your Warehouse for Efficiency and Growth

5 Steps for Optimizing Your Warehouse Space

A common question brokers are asked is, “How do I plan for future growth while creating the most effective process for today?” A tricky yet solvable issue. Having a strong team is the first step in building a solid backbone with your warehouse process but also identifying how to streamline operations and keep them moving in a direction poised for growth. Here we’ve broken down the steps necessary to achieve these goals.

1.       Addressing Inefficient Layout/Processing in Your Warehouse

Mistakes in a warehouse can affect how a business overlaps with loading, shipping, and processing. Not having an efficient floor plan laid out can lead to small mistakes costing big dollars. Workflow is important in understanding how to increase profit and decrease overhead costs, dollars that could be invested towards another aspect of warehouse management. Understanding how to effectively lay out a warehouse can take some time on the front end; however, utilizing a team that specializes in warehousing along with an architect and engineer can help drive the exercise to receive optimal results.

2.       Understanding Inventory and Space Needs Particularly During Supply Chain Disruption

Covid brought about many unknowns and left us with more questions as it pertains to how to assess product storage needs correctly. Not being able to understand product needs can lead to failure during surges as well as inadequate warehouse space.  Lack of product due to supply chain constraints has become more common but knowing how to plan for the next shipment or consistent shipments with growth down the road is integral in avoiding mistakes that can cause a delay in product being received or shipped out.

3.       Multi-market Locations and Efficient Warehouse Operations and Layouts

Many warehouse users have multiple locations that need to be equipped to handle receiving and shipping in order to outpace demand. Recognizing how to distribute effectively can be a tricky aspect to pin down, especially when port cities are involved and locations in areas that are not as accessible. Weather, location, and access can add to the margin for error and create situations that lead to lost profit.

Understanding where to send certain product can create structure around shipping and receiving and provide the ability to better track inventory, which leads to efficient warehouse layouts. For example, if a company sells both surfboards and skis, instead of sending inventory to whichever warehouse has more vacancy at the time, it makes more sense to store the surfboards in the Los Angeles warehouse and the skis in the Minneapolis warehouse.  

This could mean that product is not being stored based on the lowest shipping cost and may have a longer trek to make to end up at the designated warehouse; however, the ability to process the shipments would become more streamlined based on consumer demand and location.

4.       Investing in Automation, Warehouse Management Software, and PropTech

Don’t be afraid of technology that can help alleviate stresses within an operation. Warehouse Management Software, or WMS, has become more mainstream as of late and is required more and more as we see consumers demand products in shorter time periods. The expectation of satisfaction has increased due to the likes of Amazon and companies promising 15-minute deliveries or less. Businesses that fail to invest in appropriate WMS are likely to fall behind competitors and suffer lost profit.  Software not only benefits employees but creates an optimization within a supply chain. Features like location tracking, inventory growth, return count, etc. provide data for continued growth and improvement.

Automation is another key aspect to consider as a warehouse user. The benefits of automation far outweigh the negative pain points. Factors such as accuracy, time, reliability, and effectiveness relieve an organization’s ability to make small mistakes that lead to larger issues. Errors are caught earlier and removed to create a process that operates smoothly with little effort over time.

Automation helps identify real-time tracking to prevent issues with over-ordering, provides feedback for backorders, and processes shipping and receiving at a faster rate. In turn, customer satisfaction remains high, and employees are working smarter and not harder.

5.       Strategic Growth Planning with a Commercial Real Estate Expert

Planning for growth and scaling accordingly is the big question for most businesses. Understanding how to keep up with demand while not overleveraging can be tedious and feel like a guessing game. Having a strong team with the expert knowledge to help drive that strategy is critical. Your industrial broker can be vital in working towards a 30-day, 3-year, 5-year, and 10-year strategy that ties in multi-market warehousing. They can be working intently with employees to resolve issues that prevent growth and help you understand how your supply chain ties into your business plan in order to scale at an increased pace.

If you would like an industry expert to help you evaluate your industrial space and growth needs, reach out to a Rokos broker today. We are here for you and happy to help.

Rokos Advisors is an award-winning Minneapolis – St. Paul-based commercial real estate/tenant representation firm specializing in helping businesses find the perfect office or industrial space for their company.