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How to Organize Your Warehouse

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Setting up, running or reorganizing a warehouse is a big job. There is a way to go about these tasks that will make your work within the warehouse run more efficiently. Although setting up a new system may seem daunting, the time, money and energy you save in the long run will make it worth the effort.

Record Keeping

Excellent record keeping is a must especially in a large warehouse where you can’t just “eyeball it” to know what’s on the shelves. Whether you use a free inventory program like inFlow Inventory or follow a more comprehensive r2r financial system, knowing what’s on your shelves and what needs to be reordered to meet deadlines is an absolute requirement to gain and keep customer trust. Accurate records also cut down on ordering mistakes.

Inventory Analysis

Once you have your record keeping accurate and up to date, analyze your inventory according to the Pareto principle, which applied to inventory means that 80% of your sales come from 20% of your stock. With this idea in mind, classify your inventory into three categories: what sells the most  (that top 20% of your goods), what sells the second most (the majority of the items making up the next 15% of your sales) and what moves the least (the remaining 50% of your stock which should make up the final 5% of your sales). What sells more will probably change over time, so sales and subsequent inventory analysis should be conducted annually.

Floor Plan

Now that you have an accurate idea of what sells, create a warehouse plan accordingly. Start on paper to help you visualize where each item will go. Next decide where to place the fast-moving inventory. On one hand it makes sense to put like items together, many warehouses run more efficiently if they place the fast-movers together closest to the picking and packing area. The focus should be on minimizing the time between pulling items off the shelf and getting them ready for distribution. This part of the warehouse should also have plenty of space for maneuverability since it’s going to get the highest foot and machine traffic. Keep in mind your safety procedures for this area too as accidents are more likely to happen in the busiest sectors of the building.

Storage Decisions

When you’re designing warehouse storage, think strategically as well as vertically. There are many types of shelving and storage and not all of them are appropriate for all types of inventory. Most warehouses use a pallet racking system that allows forklifts to move large quantities of items on and off the shelves. If most of the picking is done by hand, bins should be lightweight enough for an able-bodied employee to move them around. Items that will be moved around by machinery should be strong enough to survive the occasional bump. All shelving should be sturdy and built to last.

Efficient Labels

It goes without saying that everything in a warehouse should be scrupulously labeled including the various aisles and work zones to help new (as well as old) employees work as efficiently and quickly as possible. Potential safety hazards should be labeled as well, such as equipment clearance heights. Some businesses choose to barcode each item and have pickers carry scanners. This way, the minute an item is pulled from or returned to a shelf, that information goes into the inventory accounting system.

Regular Maintenance

Once you have your systems in place, it is important to maintain all your hard work. Regular cleaning of floors, tables and common spaces is crucial for the health and safety of all workers. Warehouses, by nature, are busy places, and busy places get messy and unorganized quickly. Consider how one nail can bring a 4000-pound car to halt to understand the importance of keeping a clean work area. If your warehouse runs 24 hours a day, at least one of those hours should be devoted to the upkeep of each zone. Maintenance checks should also be performed on all frequently used equipment and shelving to make sure safety integrity is preserved.

Audit Systems


There are numerous types of audits that need to be performed in a warehouse. Financial audits generally happen in the office. Inventory audits involve cross-checking what the computer says is on the shelves with what is really on the shelves. One worthwhile audit should consist of simply listening to the suggestions of the workers moving

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