Key Techniques to Improve Warehouse Productivity

Written  by Wang Lixing, DLSM

by Wang Lixing, DLSM

Warehouse productivity is a number of measurements that management will analyze to monitor the performance of their warehouse operations. The basis of many of the measures used in warehouse productivity is based on how much it costs to perform an operation.

Improving Warehouse Layout Design

A well-design layout will allow you to exploit every square foot of space. It is the most effective method to increase efficiency and accessibility and when adhered to properly, it can make a substantial difference to your operations.

o Segmentation

Day-to-day warehouse activity is fast paced and dynamic, and as a result, chaos can quickly ensue. By segmenting your physical layout into clearly defined areas, processes become more efficient. It’s recommended to have separate areas for operations such as goods-in, inventory, packing, shipping and returns – designating specific space for special activities.

o Shorten Aisles

A large warehouse with endless rows of racking might look impressive, but in actual fact, your layout efficiency will be extremely poor. If it takes a long time to get from one area of your warehouse to another, or if the transportation of products across you warehouse is time consuming, then it’s time to make a change. By creating cross aisles, or shortening your main aisles you’ll cut pick path routes in half. You’ll also increase the speed of product retrieval, making operatives more productive and picking times much shorter.

Warehouse Stock Organization

Setting up a warehouse in an efficient and organized manner is beneficial for a number of reasons. Not only does it assist in inventory control and time management, but it also streamlines the entire process of doing business, from ordering and storing, to pulling and shipping.

Use ABC Analysis to Set Up Warehouse Inventory

ABC analysis of inventory is a method of sorting your inventory into 3 categories according to how well they sell and how much they cost to hold:

A-Items – Best-selling items that don’t take up all your warehouse space or cost.
B-Items – Mid-range items that sell regularly but may cost more than A-items to hold.
C-Items – The rest of your inventory that makes up the bulk of your inventory costs while contributing the least to your bottom line.

ABC analysis of inventory is one way of applying Pareto’s 80/20 principle. The bulk of your profits will usually come from about 20% of your total inventory. After grouping your inventory into ABC categories, arrange your pick and pack area in a way that gives your employees the easiest access to A SKUs, then B SKUs, and finally C SKUs.

Keep Your Warehouse Clean

There are many benefits Implementing 5S in the Warehouse, as follows:

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o Make the Warehouse clean and neat
o Improve Warehouse productivity
o Improve the Quality of Works
o Save Warehouse Operation Cost
o Improve Delivery Performance
o Improve Safety aspects
o Eliminate waste
o Improve Warehouse staffs’ morale

Make Receiving Inventory Easy

Receiving inventory effectively is one of the key warehouse management tips because it sets the tone for the rest of your warehouse and inventory processes. Some benefits include the following

o Optimize your receiving space
o Keep your receiving space clean and organized
o Track inventory in real-time
o Monitor quality control
o Unload received inventory quickly and safely
o Avoid shipping the wrong items to your customers

Adopt a cycle counting system

Where inventory is routinely counted one or more times in a given cycle. The cycle can be each month, each quarter, or any other time period you choose. This helps keep inventory numbers far more accurate as well as helps identify missing stock and put-away errors.

Improve Order Picking Accuracy and Productivity

The order picking process involves pulling items from inventory to fill a customer`s order. This is often seen as the most labor-intensive task within a warehouse. Forming as much as 55 percent of operation costs within a warehouse. Order picking has a direct impact on customer`s satisfaction level, so making it quick and accurate is vital.

Minimize Touches

Ideally, when an order is picked and packed, it should only need to be touched once throughout the process. To accomplish this, the order must be error-free and packed correctly the first time, moving directly from shelf to box to truck without having to be moved in and out of totes or repacked into smaller or larger containers. Minimizing this kind of rework helps make the picking and packing process more efficient.

Use Pick by Light and Put to Light Indicators

To reduce errors and improve cost effectiveness. You can also integrate good to person technologies. For instances, items are sent to operator at an ergonomic height, and the indicator light tell the operate how many item to pick and where they should be put.

Setting Reasonable KPI for the Employees

Key performance indicators (KPI) can be a powerful tool for employers when come to creating a work environment that fosters employee motivation and drive. When they implemented correctly, KPI`s can help employees feel more motivated by clearly outlining goals to see their progress towards them. This can give employees a sense of control over their job, and will encourage them to monitor their own performance. When the employees get motivated, the productivity will also be rise.

o Define goals

Start by looking at the primary tasks the employee is responsible for. Choose a goal that is realistic and achievable- something your employee has some control over. It’s important to make sure that this goal is also precise and quantifiable- such as the number of sales made, or the number of mistakes made on an assembly line.

o Assess current performance, and set a target

What are your employee’s strengths and weaknesses? Set goal that can be achieved within a monthly or yearly basis. This could be something like, “Increase sales by 5% this month”. Creating a deadline will help employees focus their work and move towards their goal more quickly. Ask employees for their input- is there anything that would help them meet their targets?

o Collect data

Find a way to steadily and accurately collect data, and stick to it. The way data is collected depends on the goal itself. But, the more thorough and organized this process is, the better your KPI system will work. An ERP Performance Management Module can help you to organize and keep track of the information you collect.

o Analyze the information you’ve collected

Compare your employee’s progress to where they were initially. Use this information to make improvements, create a new work plan, or even revise your goals if necessary. It’s very important that reviews be made regularly- even during the process itself.


Make employees part of your operation. Do not decree laws without input first. Let them voice their opinions without judgment. You may be surprised at the good ideas you get and where they come from. If you care about their comfort and you care about their opinion, then they will care about the job they do for you.


Aavon Roderick. (2018). “7 Warehouse Organization Tips That Will Increase Your Productivity Today”. Retrieved from accessed 11/09/2019.

PrakaashGunasengaran, DLM. (2017). “Technique to Improve the Warehouse Order Picking Process”. Retrieved from SIPMM:, accessed 08/09/2019

Rachael Hutchman. (2018). “7 Ways to Improve Your Warehouse Layout”.
Retrieved from:,accessed 08/09/2019.

Reid Curly. (2016). “8 Tips for Maintaining Warehouse Stock Organization”.
Retrieved from: , accessed 08/09/2019.

Sam Leong Kim Foong, DLSM. (2019). “Key Performance Indicators (KPIs) for the Logistics Sector”. Retrieved from SIPMM:, accessed 08/09/2019.

About the Author Wang Lixing has substantive work experiences, specializing in logistics and warehousing for a logistics service provider. He holds the Diploma in Mechanical Engineering and is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Lixing completed the Diploma in Logistics and Supply management (DLSM) on September 2019 at SIPMM Institute.