6 Tips for Creating a Warehouse Strategic Plan
It is important that warehouses employ strategy to ensure an efficient operation and ultimately business success.
The warehouse operation plays a significant role in the advancement of any company. It is important that warehouses employ strategy to ensure an efficient operation and ultimately business success.
A warehouse strategy involves many important decisions such as the investment and operation costs that make up the logistics overhead. In this article, Darren Woollard from DMG Freight, offering supply chain management services, gives you six tips for creating a warehouse strategic plan.
1. Outline your existing operation.
Begin creating a strategic plan for your warehouse by looking at your current warehouse function. This will involve looking at your current facilities. Create an accurate sketch of your warehouse building and floor plan. Make sure it is to scale so you can maintain accuracy. Manually confirm the drawing by looking at the warehouse floor.
Record all equipment in your warehouse. Write down processes and staff responsibilities in each section of your warehouse. Look at the procedures you have in place and then actually what is happening on the warehouse floor. You will often find there is a discrepancy in what you would like to be happening and what is actually happening with procedures.
Interview your employees to get the big picture of operations in your warehouse. Use observation and interviewing to find out the processes being used by staff.
This first step involves documenting your building, equipment, items and processes. You cannot make improvements until you have reported on what is going on.
2. Determine your warehouse storage and inventory needs.
Once you have documented everything happening in your warehouse, you are ready to look at your stock and inventory requirements. This involves planning and predicting the amount of stock you will require as well as determining where you would like to store inventory.
Consider organising items based on their material handling and storage traits. When estimating your inventory requirements think about seasonality and high selling products. Use previous data on inventory turnover to make accurate estimates.
3. Find weaknesses and areas for change in your current warehouse effort.
Where can you improve your warehouse operation? Look at the notes for your existing operation for analysis. Seek out critical areas for improvement.
Perhaps you need to upgrade your infrastructure to house certain products. Look at your warehouse facilities, processes and the equipment you are using. Search for the most efficient and practical solutions to any weaknesses in your operation.
4. Identify alternative solutions.
If things aren’t working out then think of new solutions to these problems. You may need to consider how to improve your warehouse facility, the equipment and staff processes. Find any way you are able to erase flaws in the way things are run.
5. Evaluate your new plans.
When assessing your plan financially consider the following:
- tax
- time value of money
- total operation costs
When conducting a qualitative analysis look at:
- staff safety
- how you will adjust to changes
- how easy the new plan would be to manage
- the possibility of inventory damage
6. Update your plan based on your assessments.
After making a financial and qualitative assessment, you are ready to draft an official master strategy for your warehouse.
This should include the following items:
- space
- staff
- equipment
- processes
- future plans
Please keep in mind that your strategic plan is a work in progress and will always require continual amendments. Essentially, it is never finished since you should always be optimising your warehouse operation. Make sure you regularly update your plan so you are always operating efficiently.
