Introduction
For your business to succeed, you must organize your warehouse as efficiently as possible. This step is essential and has many advantages, including optimizing all business processes, controlling inventory, and saving a lot of time that can be used for other business purposes.
Effective warehouse organization significantly improves business productivity: Workers can find the goods they need quickly and easily. Further, automated warehouse systems produce less errors, since all data is accurate and up-to-date. Efficient small warehouse organization also ensures better space utilization, as it prevents unproductive use of limited space.
So far, everything looks simple, but in reality, when it comes to organizing limited space in a warehouse, many people need some help. After sharing the most important steps for an efficient small warehouse organization below, we will offer successful tips as we discuss each step thoroughly.
Step 1. Find suitable premises and buy the necessary equipment.
Step 2. Organize your storage wisely.
Step 3. Hire employees.
Step 4. Organize the process of issuing goods.
Step 5. Prevent possible errors.
Step 6. Set up the security system.
Read on to learn a lot of useful information regarding these steps and more!
Assess the Available Space
The first step will be to find your warehouse building. Studying warehouse layout is an essential step in the organization of a medium-sized or small warehouse. When inventory space is developed, efficient warehouse operations depend directly on the rationality of layout planning.
Now let’s figure out what a rational layout consists of:
- Work areas allocation
- Equipment placements that use space as efficiently as possible
- Maximum white space exclusion
- Using as versatile equipment as possible
Proper warehouse layout speeds up the flow of goods or materials, significantly increasing overall work productivity and reducing packaging time. Warehouse operations are greatly improved by optimizing the warehouse layout. Specific layout depends on your goals and expectations, while several ready-made warehouse layouts are widely used and are quite successful.
How to Organize a Warehouse Space: 3 Popularly Used Layouts
U-shaped layout. This type is the simplest. Such a warehouse will have a shape close to a semicircle. Loading and shipping zones are usually located nearby, followed by areas for receiving and picking goods. The rear area is visually split into three compartments: a dynamic storage and two static storages. Dynamic storage is intended for faster-moving items, and static ones are for goods that are stored for longer time periods.
L-shaped layout. The traffic flow of such a warehouse occurs in the form of the letter “L”. This option provides a huge space for storing goods: the loading and receiving areas are located on one side of the premises, and the picking and shipping areas are on the other side.
I-shaped layout. Another name: ‘through construction’. In this case, the storage area for goods is located in the middle, the loading and shipping areas are at one end, and the goods picking area is at the other.
In the following parts of the article, we will look closer at dividing a small warehouse into functional areas.
When working on your warehouse layout, you must take into consideration not only your current business needs but also the potential growth prospects, which may entail space reorganizations. To do this, you will need to calculate future turnover, including periods of peak loads, formulate strategic objectives, and draw up a plan for the future turnover of goods (e.g., projections may include 1 year, 5 years, or 10 years down the road).
Designate Specific Zones
To ensure efficient warehouse operations, it is necessary to designate functional zones.
- Receiving area
In this area, goods from the business’s own production workshops or from the suppliers are received, and certain operations take place:
- control weighing of goods and placing them into boxes as follows placing diagrams;
- weighing and sealing the boxes;
- warehouse labeling of boxes;
- stacking boxes on palettes and warehouse labeling of palettes.
- Storage area
Prepared palettes with goods are stored here. The technological operations are as follows:
- moving palettes from the receiving area;
- placement of palettes with goods onto racks (i.e., special warehouse equipment is used for this);
- unloading palettes with goods from racks (using special warehouse equipment);
- moving palettes to the picking or shipping areas;
- internal technological movements of palettes (if necessary).
- Picking area
Here goods are picked according to customers’ orders. These technological operations are carried out:
- control weighing of goods that come from the above areas;
- selection of boxes with goods and customer labeling attached to boxes;
- placement of selected boxes on palettes and customer labeling attached to palettes.
- Packing and shipping area
This area is intended for packing and loading of goods into vehicles for subsequent delivery to customers. The technological operations that are carried out here are:
- control weighing of goods coming from the picking area;
- placing palettes with goods at the warehouse gates;
- loading palettes into vehicles.
If your enterprise has a smaller turnover, you can combine the areas for receiving and picking goods. The safety of goods must be ensured in all areas.
The packer’s workplace may be divided into three parts: a place at the conveyor, a work table for packing goods into the boxes, and space for empty boxes when folded.
One more area that is not mandatory yet important for a warehouse is the office space. Typically, such an area is intended for working with documents and information systems, but it may also include a dining or break room, a conference room, and a locker room. Sometimes, if possible, such office spaces are located outside the warehouse—this protects employees from warehouse noise and allows them to work more efficiently. The size of this space often depends on the number of people working there.
The Importance of Clear Labeling and Signage
Clear labeling is a key point, especially if your warehouse is small. It simplifies order processing, packaging, and shipping of goods, and it also helps maintain order in the warehouse. Product labeling includes a logo (indicating that the product belongs to your company), the end-to-end number (examples include the date of receipt or a unique product number), and a barcode.
There are several inexpensive ways to label goods:
Label printer is a widely used method. This way, information about a product is applied to a sticker and glued directly to the product. The benefits of this method are that stickers can be applied to absolutely any surface, and new models of such printers even allow you to apply signs or logos.
Laser markers are not so universal, but they are also very useful. They allow for the application of information on metal, plastic, and glass surfaces. The benefit of this method is that it is economical, as no consumables are needed.
A drop jet marking machine will be an excellent choice if the storage conditions of the goods are not ideal. This labeling is quite durable and is suitable even for goods that are stored outside.
Labeling and signing goods in the warehouse will prevent confusion when moving goods, in cases of theft, and difficulties with reflecting objective data in electronic form.
Optimize Storage Solutions
The correct goods storage system in the warehouse is crucial for your company to make a profit. If this system is chosen correctly, taking into account the types of goods and the dimensions of the warehouse, then there will be no need for you to hire a large number of employees. Accordingly, money that you would spend on paying salaries may be used for additional business operations. There are several types of systems for storing goods in small warehouses, and below we share details about the most widespread ones.
Shelving vs. Racking vs. Bin Systems
Shelving is one of the most effective methods, since this way the goods are organized and the space is engaged to the maximum. This storage system keeps goods within easy reach, making work smoother for warehouse operators and enhancing overall productivity. You can also place goods depending on how they are to be stored, thus significantly lessening the risk of damage. When storing goods on shelves, the resulting inventory process is fast and not complicated; differences in data are identified quickly, and the chances of lost goods are close to zero. However, you must keep in mind that this system is not suitable for heavy goods, while it is rather suitable for light and small items.
Racking is a special system created for storing heavy goods; these are multi-tiered structures for storing a variety of goods and materials. There are several types of such racks for warehouses depending on specific needs.
- Palette racks are used to store goods on palettes. Their benefits are that they are quite high (up to 14 meters), and their stands are attached to the floor. As a result, they can withstand heavy loads.
- Mobile racks are systems for storing that allow access to all rack cells, and they can be moved by using a control panel.
- Mezzanine racks are metal racks that are located on different tiers; they also have floor panels. Usually, the tiers are connected by stairs.
- Cantilever racks are great for storing long items. They may be single- or double-sided, depending on where they are located. The system is a collapsible structure consisting of a support, stands, and a console.
The bin system is perfect for storing small similar items. The system helps to manage inventory efficiently, as it is arranged in exact spaces. It would be great to label bins, as this extra step will better the organization’s process even more.
Vertical Storage
Efficient usage of warehouse space has many significant benefits. By utilizing the entire space, the need for additional space is reduced, inventory management is improved, and associated costs are minimized. It also simplifies the implementation of automation and promotes scalability, allowing businesses to adapt to changing requirements without immediately expanding their territory.
A vertical system for storing goods in the warehouse is an ideal solution for warehouses with a small area as it maximizes space in a small warehouse. In this case, the height of a room is used as efficiently as possible while the floor area is occupied to a minimum. The aforementioned mezzanine racks perform this task easily. They increase warehouse capacity and storage density of goods.
How to Store Different Types of Goods Efficiently
Storing goods is not as simple as it might seem at first glance; there are many nuances. Storage management depends on the type of goods (perishable or not), their size, and the presence of special storage requirements.
- Heavy vs. light items
If items are heavy or bulky, they should be placed closer to the exit and order-picking area. It is also important that heavy goods are placed no higher than waist level. Thus, the likelihood of injury or damage to goods will be minimized.
For small and light items, it is better to store them in lower bins or containers, since they usually need to be selected manually.
- Frequently vs. rarely accessed items
To correctly prioritize when placing goods in a warehouse, many companies use ABC analysis. It involves dividing inventory into three categories according to how frequently they are accessed, where A is the most frequently accessed items, and C is the most rarely accessed items. ABC analysis makes it possible to rank the range of goods in the warehouse according to various parameters. The drawback of this analysis is that it does not consider the introduction of new products and seasonal demand, and such products may sometimes have low sales volume. In order to ensure accuracy, you will need to regularly conduct ABC analysis.
Organize Inventory by Accessibility
The main consideration with storing inventory in the warehouse is the convenience of its further accessibility and use. One of the most useful tips is to place goods by priority: the most necessary goods should be stored near the aisle, and the rarely needed ones should be stored in the back of the warehouse. On the top shelves, it is better to store the goods that are needed extremely rarely, while goods that are always in great demand should be easily accessible
Implementing the FIFO method
The FIFO (“First In, First Out”) method ensures smooth inventory turnover. It means that goods are written off in the order that they are received at the warehouse. This method accurately reflects the cost of purchasing goods, even if it is increased later.
The huge benefits of the FIFO method are the reduction of obsolete inventory, increased customer satisfaction, and reduced costs for warehouse logistics. However, this method is not ideal. Its disadvantages include the need for accurate accounting of goods and the likelihood of higher taxes. Also, properly organize the warehouse space is crucial. For example, goods that arrived a long time ago should be placed closer to the shipping area.
Grouping Similar Goods and Using Bins and Containers
Grouping similar goods involves their distribution into groups according to certain characteristics. This method helps to use your space economically, quickly manage inventory quickly, and reduce clutter in your warehouse.
Different containers and bins are a perfect option, whether storing small items on racks or on the floor. With a wide range of sizes to choose from, you will fill the space as tightly as possible and customize any depth or shape for all types of small items. These steps will speed up the process of finding each product and optimize your warehouse.
Streamline Receiving and Shipping Areas
An orderly and clean warehouse is one of the requirements for efficiency and safety. Cleanliness in a warehouse is important not only because it gives the warehouse a neater appearance but it also maintains the company’s positive image. There are strict standards for storing goods and they must be followed, especially when it comes to receiving and shipping areas. These areas must always be clean and well-organized to ensure fast processing and avoid errors when issuing goods.
Loading and unloading processes are extremely important stages in warehouse operation. Such processes should be planned in ways that take as little time as possible, while clean pathways play the most significant role in directly influencing operational speed. To keep the pathways clean, simply put all the goods in their places at once.
Quick access to packing materials and shipping labels must be provided, as it influences the quality of the services and customer satisfaction. Packing materials should always be at hand, as this will save time and speed up the packing process. The shipping label plays a crucial role in the shipping procedure. It contains information about the contents of the package, its characteristics, and handling rules during transportation. The shipping label improves efficiency and safety while reducing risks of damage and loss.
Even though your goods are of high quality, sometimes the customer may return them, and their reasons may be different each time. For such situations, it is mandatory to have space in the warehouse for returned goods; this will prevent clutter and confusion. This space may also be used for damaged items.
Use Appropriate Equipment
Warehouse equipment is critical to success; it makes warehouse operations more efficient and helps to properly organize important processes in the enterprise.
Palette Jacks and Hand Trucks
Palette jacks are equipped with two forks that go under each palette; they greatly facilitate the transportation of heavy goods that are placed on the palettes. Hand trucks also serve to make transporting heavy goods easier; they consist of a footrest, handle, and a metal frame. Unlike jacks, they do not use hydraulic action and are suitable for small-sized goods.
Ladders and Step Stools
When goods are stored vertically, the warehouse must have ladders and step stools, as they greatly simplify access and speed up the work process. Most step stools have handrails and wheels, and to work at the upper level, the worker climbs onto a platform with a guardrail, which significantly reduces the risk of falling or injury. Ladders may be folding or not, depending on the purpose of their use. The huge advantage of this type of equipment is that it can be moved to any point in the warehouse and the height may be increased arbitrarily, which makes it possible to get close and convenient to goods at any height.
Foldable Tables and Mobile Workstations
This equipment is a must-have in a small warehouse. They save a lot of space and are worth investing in. Foldable tables are easy to install and can be quickly moved to any location in the warehouse. Also, they do not require much space for storage. They will be an excellent choice for the goods packaging area. Mobile workstations are a great tool for reducing errors, as they speed up inventory processing and improve work efficiency.
You will definitely need to invest in warehouse equipment; if selected correctly, it will ensure safe and productive work.
Implement a Labeling and Signage System
As you already understand, warehouse facility management is quite difficult, especially at the beginning, when not all processes have been established and many different questions arise. To stay on top of everything, you must first implement a labeling system: All goods that enter the warehouse must be marked.
Two main functions of labeling are information and identification. The first is one of the means of transmitting information about the item. As a rule, this data coincides with the data in the product’s accompanying documentation. The second function is also very important, since it provides the ability to track goods at all stages. There are several ways to create an effective labeling system.
Using barcodes and color codes for different product categories
Barcoding makes both large and small warehouses alike more efficient and responsive; it allows you to reduce costs and eliminate the chaos that is sure to arise without such a system. Its principle is quite simple: Each storage location in a warehouse must be assigned a unique code. This label must be affixed to each rack’s beam. The information can be read by using a PDT scanner, which transmits data about the product to the inventory management system (such as Odoo ERP).
Color coding saves a lot of time when looking for specific goods. If it is clear, it significantly reduces the risk of finding the wrong product or putting it in the wrong place. Such encoding speeds up order processing and increases overall productivity by several times.
Clearly marking zones, aisles, and storage bins
Color coding improves warehouse logistics. Visualization of zones and aisle markings helps workers quickly navigate the site and reduces the risk of errors. This, in turn, increases productivity and reduces operating time. Setting up zones can be done by using paint or adhesive tape.
A benefit of marking aisles, working areas, and storage bins is that during intra-warehouse transportation, the goods reach their exact destinations along the designated route. Conventional signs show how to properly handle a specific product.
Signal marking of hazardous areas is extremely important to maintain workers’ safety and avoid accidents; this is done with special wear-resistant paints.
Conclusion: Setting Up for Future Growth
Organizing a medium-sized or small warehouse is a very responsible task, and it requires work on all operations, as well as automation of routine processes. For your warehouse to work smoothly and be organized, you need to remember the following important points:
- Be sure to divide the space into zones based on inventory turnover.
- Implement a product labeling system as early as possible to prevent errors.
- Store large and heavy items closer to the shipping area.
- Make the most of your space with vertical storage.
- Keep the warehouse clean.
- Purchase or rent decent equipment.
- Mark warehouse zones to simplify logistics.
When our business develops and grows, you will need to update and maintain your warehouse layout. When the amount of inventory increases enough, it will be necessary to change the zoning of the space. For example, you may need to separate your receiving and shipping zones if they had been grouped together before. Be ready for such changes, as they mean that you are doing everything right.
As you can see, improving productivity and efficiency does not mean that you must change everything. It will be enough to start with small steps that will definitely lead you to great success. The main thing is to never stop improving and learning new ways to increase your profits. By introducing changes step by step, it will be much easier to get used to new conditions, and as a result, maintain a well-organized warehouse.
What’s Next? Exploring Warehouse Management Software
Once the physical setup of your warehouse is optimized, the next step is to implement software to streamline processes such as inventory management, order tracking, and restocking. For example, Odoo ERP and the Ventor PRO app are great solutions for warehouse management. Maximizing space in a small warehouse is not enough to ensure that all processes work perfectly. Warehouse management systems, like Odoo, will further enhance organization and automation. Such a system will simplify the work at all stages: from the receiving of goods to the shipping and their movement throughout the warehouse. Process automation is a crucial step in organizing a warehouse, so you should learn as much about it as possible.
About this blog
We invite you to contact us for more information. Our customers have benefited greatly from the customized Odoo implementations we provide, especially those with specific warehouse optimizations that our customers need. We also have completely customizable, ready-made solutions for all warehouse operations in Odoo. Reach out to us and let us know what you need, so you can try our products to successfully organize your warehouse.
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