Our tips for successful stock optimisation in your warehouse

As businesses grow, so do their stock levels. This means it is becoming increasingly difficult to find sufficient space to store goods. Poorly managed storage can negatively impact a company’s overall performance by causing delivery lead times, increasing costs, and decreasing customer satisfaction. To address these challenges, you need to optimise your logistics warehouse storage. Stock optimisation not only helps you be better organised but it can also save you time and money.

How do you optimise storage in a warehouse?

Making it easier to store and move pallets, simplifying picking for order pickers and optimising storage areas are all important elements for promoting productivity.

To efficiently manage a warehouse and organise it properly, you must select the appropriate storage system and assess the most relevant technologies to make processes smoother.

Choosing the right storage system

The chosen storage system must, of course, fit the company’s specific needs.

This means you must factor in several essential criteria:

• The warehousing capacity required;
• The handling speed required;
• The type of goods stored;
• The total cost of the selected system.

Many different storage solutions are available and must fit the business:

• Static storage maximises space use with shelving in rows;
• Mobile storage uses trolleys that can be easily moved around the warehouse when needed;
• Automatic storage and retrieval systems (ASRS) optimise labour costs through process automation.

The choice of shelving also has a direct impact on order picking and team performance. For safety reasons, you must always choose racks that comply with current standards. In addition, the working environment must also be factored in since the preferred material may differ based on certain hazards such as corrosion.

The shelving should be selected mainly according to the weight of the load it will have to support:

• Light load shelving (load less than 300 kg);
• Medium-heavy load shelving (load between 300 and 700 kg);
• Heavy load shelving (load over 700 kg).

Use appropriate technology

To achieve optimal efficiency and improve your business, you must also use the latest technology. It will enable you to optimise productivity and flexibility.

For example, inventory drones are one of the most relevant solutions in warehouses. They come in the form of devices that are piloted via remote control or a preset computer program.

Once the system is set up, these tools can take inventory of goods. More efficient than human operators, they reduce errors and allow you to redirect employees to higher value-added operations.

The best warehouse management methods

There are plenty of practical solutions to optimise logistics flows and improve warehouse efficiency. These tried and tested techniques mean you can streamline important operational processes and make operators’ work easier.

The ABC analysis

The ABC analysis is a stock management strategy that consists of storing items according to their turnover rate.

If you want to use the ABC method, you should rank items as follows:

• Category A represents the highest value items, which contribute to the majority of turnover (80% of turnover and 20% of products);
• Category B is the intermediate class (15% of turnover, 30% of products);
• Category C refers to the lower-value items that are in lower demand (5% of turnover and 50% of products).

By categorising your stock in this manner, you can focus on managing the higher-value items or supplies and allocating resources accordingly. For example, items in category A can be stored closer to shipping areas for faster processing, while items in category C can be stored further away where space is cheaper. This method optimises stock management, increases overall efficiency levels.

The Kanban method

The Kanban method is a production system used in warehouses to ensure that the right amount of materials and products are available when needed. Stocks are then replenished only when necessary.

This method uses “kanbans” (Japanese for labels), which are cardboard or electronically formatted signage cards. They are placed on bins or containers that indicate that it is time to order these items again when they reach the front of the line. This approach is very effective in maximising efficiency and reducing excess stock.

LIFO and FIFO systems

LIFO and FIFO are commonly used stock tracking methods in warehouses.

LIFO, which stands for Last in, First Out, ensures that the last item stored in a warehouse is the first one to leave. This reduces the risk that items will deteriorate or become obsolete while they remain in the warehouse. The principle behind this tracking system is that the oldest item will be removed from the warehouse before any new items are brought in. This helps maintain product quality and meet customer demand, as items are shipped in chronological order.

The FIFO or First in, First Out system is based on the principle that items added to the warehouse first should be sold or used first. This method improves organisation by ensuring that goods with a longer product life cycle remain in stock while those with a shorter product life cycle are shipped out first. The FIFO system maintains an organised workflow and helps prevent inventory issues, which saves money by reducing the number of unused items while improving customer satisfaction.

The importance of constant process optimisation

To maximise warehouse efficiency, you must constantly monitor the latest industry advances. Lots of new practices and innovations are uniting in what is called Warehouse 4.0.

These factors are promising greater profitability with controlled costs and increased productivity, for example, by using inventory management software, the WMS (Warehouse Management System). Tools such as real-time goods flow management, order processing optimisation, data collection and analysis have become essential to companies’ logistics strategy.

Process optimisation is a major challenge, which must be achieved over the long term. To start reorganising and improving your stock management today, download our “The guide to stock management” white paper. This is full of practical tips to increase your efficiency.