How to Organize Your Warehouse for Efficiency

Creating an efficient warehouse is key to preventing mispicks and misshipments in ecommerce shipping, which will ultimately reduce your costs and improve customer satisfaction.

When it comes to organizing your warehouse for efficiency, there are three main considerations you should keep in mind:

• Clean workspaces

• Warehouse layout

• Inventory organization and management

Let’s look at each piece more closely—so you know not only how to organize a warehouse but how to organize a warehouse efficiently and how to keep a warehouse organized.

Hot tip: Need to level up to a warehouse but not sure whether to rent or buy? Here’s everything you need to know.

Table of Contents

• Keeping a clean warehouse

• How to lay out your warehouse

• Why you should use automation in your warehouse

• Does digital picking help you save time and money?

• Organizing your warehouse efficiently is key to saving costs

Keeping a clean warehouse

Just as a clean kitchen is one of the hallmarks of a good restaurant, clean workspaces have numerous advantages when it comes to workspace efficiency, including:

• Keeping employees healthier

• Reducing damage to inventory

• Increasing worker productivity (and decreasing lost effort due to disorganization)

Any one of those factors can make a big difference in warehouse efficiency, but think about how all three compound, saving you money in the long run.

You can make this happen with intentional training and processes. Have employees clean regularly and train them on how to keep things organized. Consider how each of the following might reduce inventory damage and safety hazards:

• Regular reviews of warehouse processes

• Regularly scheduled equipment maintenance

• Regular reviews of potential trouble areas in workspaces and aisles

Numerous studies have found that clutter and disorganization negatively affect people (including employees, leading to decreased employee satisfaction and performance), just as clean and organized workspaces positively affect performance and well-being.

Along with making your business and fulfillment more efficient, keeping your warehouse clean and organized makes the workplace better for you, your business, and your employees.

How to lay out your warehouse

Knowing how to lay out your warehouse can be difficult, but it helps to start by looking at your processes and how you can make them more efficient.

Think about your workflow

That means taking workflow into consideration. When inventory comes in, moving it to the next stage(s)—likely storage and later fulfillment—should be straightforward and clearly defined both in processes and by spatial design.

Consider which inventory moves fastest. For many businesses, as much as 80% of orders may come from as little as 20% of inventory. (This is also referred to as the Pareto Principle.) If you use ABC organization, you can group your inventory into three categories.

Your most popular inventory (that 20% or so of inventory that makes up the bulk of your orders) is your A stock, so make it most accessible. B stock would be the next most commonly ordered inventory, and C stock is what moves the least, so it can be farther from your packaging and shipment area.

Use a grid system to plan your warehouse

Ideally, you should be able to draw a physical map of how orders are fulfilled and note how efficient it looks—if not a straight line, then a very clear flow.

The best way change your layout is to draw a grid system. A grid is a great way to plan out your warehouse layout as it makes it clearer to see and plan the flows.

Name your location places

Labels and signage help here, too, especially in helping define processes, onboarding new or temporary employees, and keeping employees safe.

Sign inventory, workflow, and any hazards, and remember to regularly check that signage is accurate, legible, and in good shape. Maps can also be helpful in clearly communicating processes and information.

Name your location places or bins with a clear naming system, and always remember that your team should be able to look at your warehouse system and see exactly where any product is located.

Make the most of your storage capacity

This is also a good time to review your storage capacity. Maximizing storage capacity so that you’re making the most of all of the space in your warehouse will help you be more efficient.

Inventory should fit cleanly, clearly, and neatly on your shelves, without undue additional space but without becoming difficult to remove, either.

Using automated storage methods can help you become more efficient here, as well.

Hot tip: If you’re not sure where to start, consider these 7 Essential Warehouse KPIs to Start Tracking For Optimal Performance and Maximizing Efficiency in Your Order Management and Fulfillment Process.

Why should you use automation in your warehouse?

Automation boosts efficiency in your warehouse. Not only can it help you store inventory efficiently, but it can also help track inventory, pick and sort inventory, and fulfill orders.

Given that inventory management is essential to nearly everything in most warehouses, streamlining efficiency here is key to helping your business level up.

Hot tip: Automation can be daunting, but it doesn’t need to be. Start with something simple, like automated shipping labels, and consider reading Veeqo’s guide on 6 Automation Tools for Ecommerce Sellers.

Some of the best reasons to use automation in your warehouse include:

• Inventory classification: Sorting inventory into buckets based on order frequency can increase fulfillment efficiency significantly.

• Inventory picking: Using an app such as a digital picking software (or tools like the Veeqo scanner) can substantially increase picking efficiency.

• Inventory compartmentalization: Understanding how much inventory you need to keep in stock and how best to store it can save you time, energy, and space. Inventory management software can help.

• Inventory slotting: Understanding what sells most frequently and how to store it best allows you to streamline your picking processes, cutting down on fulfillment time and increasing productivity and worker satisfaction.

• Cycle counting: Rather than needing big year-end physical inventory counts, automation and software usage help you cycle count on a more regular basis, which helps you maintain more accurate inventory levels—and which saves you time and energy.

• Safety stock: Knowing exactly what stock you have on hand and what you’ve historically shipped allows you to better set aside safety stock for emergencies without needing to go overboard. Some of this is simply good recordkeeping, but automation saves you time and energy.

Using a warehouse management system—like what Veeqo offers—makes your warehouse easier to navigate and helps your workflow run smoothly. As a bonus, a good warehouse management system makes the work environment more pleasant, too.

Not only can employees quickly identify where inventory is, but they can also quickly see inventory levels, historic fulfillment, SKU movement, and more.

And by preventing mispicks and misshipments, you'll also keep customer satisfaction high and reduce the likelihood of returns.

Hot tip: While choosing the right warehouse management system can be tricky, Veeqo offers great guides to help guide you. Consider reading The Complete Guide to Warehouse Management Systems.

Does digital picking help you save time and money?

Digital picking with tools like Veeqo’s digital scanner and Veeqo’s mobile app allow you to manage your inventory from the palm of your hand—literally.

In fact, Indigo Herbs has moved up to 99.89% picking accuracy with Veeqo since they started using the mobile app!

And with inventory records updating in real-time as orders are fulfilled, this helps ensure you’re on top of your stock. Also, digital picking helps cut down on errors like mispicks and misshipments because it helps organize and support clearly defined processes.

Because digital picking offers a framework for picking according to guiding principles (which may include warehouse location, for instance), you can be sure employees are fulfilling orders with the right inventory in fulfilling orders and doing so in the most efficient way.

For instance, if your warehouse is organized according to the ABC principle, digital picking helps employees quickly identify where each piece of inventory is that they need without backtracking or doing extra work.

Digital picking can also help ensure you or your employees aren’t grabbing the wrong piece of inventory. With Veeqo, you can do this with either the mobile app or the Veeqo scanner; both offer digital picking.

Related content: How to Run an Efficient Warehouse for Your Ecommerce Business

Organizing your warehouse efficiently is key to saving costs

Designing and maintaining an efficient warehouse is a pivotal element in optimizing productivity and streamlining operations for any ecommerce business.

After all, a well-optimized warehouse not only reduces costs but also improves customer satisfaction through faster order fulfillment and accurate deliveries.

We hope this blog post has helped you better understand how to create and organize and efficient warehouse!

Take control of your ecommerce store's shipping efficiency with Veeqo. Sign up or book a demo now to optimize your warehouse organization and streamline your operations.