This document summarizes strategies for optimizing warehouse productivity through reducing storage footprint, increasing output efficiency, and utilizing automated systems and software. It discusses optimizing floor space through making full use of vertical space, underutilized areas, optimizing aisle widths, cross-docking, dealing with obsolete inventory, and using automated storage and retrieval systems. It also covers increasing output efficiency by reducing the cost per pick, improving pick/stow routes, cycle counting, matching SKUs to storage, implementing ergonomic pick locations, and using an appropriate warehouse management system. Finally, it discusses how automated systems like vertical lift modules and software can increase accuracy, throughput, and inventory visibility.

1. Warehouse Optimisation
R V Srinivas Rao,
MBA, MSc, FCIPS, CISCM, CIPC, SPSM
Supply Chain Congress 4.0
October 2019, Thailand
Disclaimer: This presentation is compiled by R V Srinivas Rao as part of Supply Chian congress 4.0 in Bangkok, Thailand. All thoughts and opinions expressed herein are his own and do not
reflect the thoughts or opinions of the companies he has worked or is working.

2. Warehouse

3. Increasing Productivity by
reducing Storage footprint
§ Contributing towards zero cost warehousing by
Optimizing floor space
§ Identifying ways to Increase output efficiency
thereby reducing cost per pick
§ Choosing the right automated systems and software
solutions for materials handling

4. Warehouse

5. Increasing Productivity
§ Optimizing floor space
§ Increasing output efficiency
§ Automated systems and software

6. Optimizing Floor space

7. sqm vs. cbm
§ Square meter (M2) vs. Cubic meter (M3)
§ Two vs. Three dimensions
§ Area vs. Volume

8. Optimizing Floor Space
Warehouses transcend beyond being used as
solely a storage site safe for stocks.
Storage optimization consideration involves
retrieval methods, storage, product placement,
warehouse flow, and physical structure.
These are essential considerations in ensuring a
cost-effective storage optimization strategy,
streamlining warehouse inventory management
for increased efficiency and therefore reduced
warehouse operation cost.

9. Optimizing Floor Space
§ Make Full use of upward potential
§ Use of Underutilized space
§ Optimize aisle width
§ Consider cross docking
§ Dealing with obsolete inventory
§ Organise offsite or Supplier storage
§ Usage of Automated Storage and Retrieval
System (ASRS)

10. Optimizing Floor Space
§ Make Full use of upward potential
§ Land Cost is a significant contribution to overall expenses
§ It is necessary to use vertical space instead of expanding
warehouse footprint.
§ Racking is an excellent way of storing inventory
efficiently
§ The layout of warehouse should be appropriate and
flexible
§ An optimized plan provides highest possible storage
density

11. Optimizing Floor Space
§ Use of Underutilized space
§ There is often space above receiving area or shipping doors, or
staging area
§ Adding another floor with a mezzanine is also an option
§ This storage would be ideal for slow-moving items
§ Storing small items on pallet racks will waste space instead use
standard bins / different kinds of shelving as per requirement
§ Optimize aisle width
§ Important to design minimum width required to match handling
equipment without compromising efficiency
§ Aisles without proper optimisation would add to cost
§ Removing wasted space allows to increase aisles / pallets thereby
increased space for more stocks.

12. Optimizing Floor Space
§ Consider cross docking
§ Allows to minimize storage by receiving, and scanning inbound
stock and then loading this onto outbound trucks and vehicles
without physically storing in racks.
§ Automatically reduces stocks being stored unnecessarily between
receipt and issuances.
§ A quick method to put back the inventory into distribution chain.
§ It is tricky to handle but can efficiently maximize space with closely
knit SOPs.
§ Dealing with obsolete inventory
§ Stocks that have not produced any turnover in a given period
§ Quarterly checks along with Planning dept on the dead stocks.

13. Optimizing Floor Space
§ Organise offsite or Supplier storage
§ Overstocking items that have not been processed would add
to blocking space.
§ Reserve primary space for fulfilling processed orders
§ Encourage storage with the suppliers for JIT
§ Off site storage of dead / slow moving stocks
§ Usage of Automated Storage and Retrieval
System (ASRS)
§ Increases labor productivity up to 85%.
§ Enhances product security
§ Provides real-time inventory control

14. Optimizing Floor Space
§ Make Full use of upward potential
§ Use of Underutilized space
§ Optimize aisle width
§ Consider cross docking
§ Dealing with obsolete inventory
§ Organise offsite or Supplier storage
§ Usage of Automated Storage and Retrieval
System (ASRS)

15. Increasing Output Efficiency

16. Increasing Output Efficiency
Labor constitutes around 65% of the
operating cost for an average warehouse
and order picking accounts for
approximately 60% of warehouse labor cost
(Karasek, 2013)

17. Increasing Output Efficiency
§ Reducing cost per pick
§ Improving pick stow routes – pick to light tech.
§ Regular Cycle counting and Process audits
§ Match SKUs to Proper Storage Method
§ Popular items nearest
§ Use Barcode - eliminate manual verification
§ Implement Ergonomic pick locations
§ Appropriate Warehouse Management System

18. Increasing Output Efficiency
§ Reducing cost per pick
§ Reviewing SKU velocity regularly
§ Consolidations
§ Batch picking
§ Cleaning chemicals
§ Preventative Maintenance
§ Uniforms as per role
§ Pick and Pass strategy
§ Improving Pick / Stow routes
§ Pick to light technology
§ Less labour walking distance.
§ Employees reaching their fitbit step goals – good for them,
not for organisation.
§ Optimise aisle space for Forklifts.

19. Increasing Output Efficiency
§ Regular Cycle counting and Process audits
§ Conduct regular stock counts on random items to ensure
accuracy
§ Year end physical stock counts shall be reconciled
§ Perform a process audit of your material handling and
picking operations at least once per year.
§ Match SKUs to Proper Storage Method
§ Re-arrange shelving to reduce the amount of space
between each shelf and store similar height products on
the same shelf.
§ Storing small items on pallet racks will waste space instead
use standard bins / different kinds of shelving as per
requirement.

20. Increasing Output Efficiency
§ Popular items nearest
§ Store SKUs frequently picked together in the same
picking location to reduce travel and search time
§ Eliminates visiting the same pick face multiple times a
day, increasing worker productivity.
§ Use Barcode / RFID - eliminate manual
verification
§ Using a barcode scanner for quick and accurate picking
eliminates guess work.
§ Confirming an item during during the picking process by
simply scanning ensures order accuracy.

21. Increasing Output Efficiency
§ Implement Ergonomic pick locations
§ Reduce bending and reaching by organising products
reachable within the area between waist and shoulders.
§ This improves worker ergonomics, increases productivity,
and reduces employees backaches.
§ Appropriate Warehouse Management System
§ WMS, WCS, ERP – all systems would produce data only
when they are linked appropriately.
§ Gain real time analysis of the operation by connecting data
across multiple platforms.
§ Use statistics to increase productivity.

22. Increasing Output Efficiency
§ Reducing cost per pick
§ Improving pick stow routes – pick to light tech.
§ Regular Cycle counting and Process audits
§ Match SKUs to Proper Storage Method
§ Popular items nearest
§ Use Barcode - eliminate manual verification
§ Implement Ergonomic pick locations
§ Appropriate Warehouse Management System

23. Automated System
and
Software

24. Automated System and Software
Automated system and software solution for material
handling brings a significant reduction in damage to
inventory because of misuse of material-handling
equipment and human errors. Increases efficiency and
improves the accuracy. (Lingjia Tang, Mars, Xiao Zhang,
Hagmann, Hundt & Tune, 2013).
Inventory Management Software is used to track
Inventory levels, Sales processes, Orders, and
Deliveries. This system is used to avoid over stocking
of products and outages.

25. Automated System

26. According to Gartner report
The business intelligence market is
expected to reach USD 18.3 billion by the
end of this year (explorewms.com)

27. § Automated Storage and Retrieval System
§ Reduced manpower, Safe and almost
Error-free
§ Types of Automated Systems
§ Selecting Inventory Management Software
§ Automated systems can be applied to
areas involving large volumes of products.
Automated System and Software

28. Automated System and Software
§ Automated Storage and Retrieval System
• First originated in 1960s
• Initial investment is considered high – Return
on Investment in approx. 5 years
• Increased picking accuracy
• Theft protection
• Real-time inventory control
• Increases Throughput capacity
• Suits work in difficult areas (Cold Rooms etc.)

29. Automated System and Software
§ Reduced Manpower, Safe and Error-free
• Traditional storage system creates fatigue
• Reduces productivity as the Users have to bend,
stoop, reach, push, and pull etc.
• As the physical lifting load is reduced, it is
considered safe for staff
• The order storage and retrieval is all controlled by
Computers based on algorithms, thereby reducing
human errors.
• Increases accuracy levels to 99% (GIGO)

30. Automated System and Software
§ Types of Automated Systems
• Vertical Lift Modules (VLMS)
• Vertical Carousel Shelving System
• Horizontal Carousel Shelving System
• Horizontal Lift Storage System
• Automated Guided Vehicles (AGVs)
• DRONEs
Best choice for your warehouse depends on the size of the
loads and the throughput to be handled.

31. Automated System and Software
§ Selecting Inventory Management Software
Lamborghini replaced with Ferrari
Inventory Management Software is used to track
Inventory levels, Sales processes, Orders, and
Deliveries. This system is used to avoid over stocking
of products and outages.

32. Automated System and Software
§ Inventory Management Software (IMS)
buyers are driven by one of the following:
• Industry specific
• Company Operations specific
• Software specific
§ Types of Software:
§ On-Premise
§ Software as a Service (SaaS)
§ Cloud hosted

33. Automated System and Software
§ Key Features of IMS
• Product Categorisation
• Sales / Purchase Orders
• Electronic scanning
• Automatic ordering
• Dynamic product information
§ Benefits of IMS
• Efficiency and Speed
• Document generation
• Insightful data

34. Increasing Productivity
§ Optimizing floor space
§ Increasing output efficiency
§ Automated systems and software

35. Thank you
R V Srinivas Rao,
MBA, MSC, FCIPS, CISCM, CIPC, SPSM
Email: rvsrao@yahoo.com
Mobile: +974 30259866