When people hear the word “warehouse,” they often think of a place where merchandise is stored before it’s shipped off to some other place. While that’s not incorrect, there’s much more to it than a big building full of shelves, boxes, and all kinds of products and materials waiting for pickup. Making sure every box and every item is accounted for, stored properly, and shipped off to the right destination at the right time requires strategy – a warehouse strategy if you will.
In this article, we’ll explore what warehouse strategy is, how it can improve your business’s bottom line, and some considerations to account for if you’re developing a new one.
What is Warehouse Strategy?
A warehouse strategy is exactly what it sounds like: an outline that enables you to plan and manage your warehouse so that it’s as efficient as possible. Without one, you’re left guessing about key metrics such as storage density and optimal floorplanning and workflows, order and inventory accuracy, fulfillment efficiency, and labor needs. Conversely, having a solid warehouse strategy gives you a top-down understanding of not only how your warehouse operates, but where you can improve to remove bottlenecks and save money, energy, and time.
Warehouse Strategy vs. Warehouse Planning
It’s important to note that a warehouse strategy is not the same as a warehouse plan. Where warehouse strategy outlines how the warehouse functions, warehouse planning is specific to material flows, the placement, use, and handling of equipment, and the physical nature of the warehouse: from its floorplan to how people, machines, and materials move and operate on the floor.
In other words, warehouse planning is a part of the overall strategy rather than the only part. If you’ve heard terms such as a warehouse strategic plan, it’s most likely referring to warehouse strategy. Similarly, two other parts of warehouse strategy are warehouse operations and inventory management which, combined with warehouse planning, provide a great overview used for warehouse management.
Benefits of Great Warehouse Strategy
Logistics is not just the practice of getting goods and materials from one point to another. It’s about finding the most efficient ways possible with as least resistance as possible. If you’ve been operating a warehouse without a strategy, consider a few of the benefits a strong warehouse strategy can provide:
Inventory Data Tracking and Analysis
One of the main reasons to have a warehouse strategy is to make sure your team knows everything it needs to about the inventory stored under your roof. From specific locations to how long it’s been sitting there, from which lot belongs to which client you’re storing for and who you’re shipping it out to on their behalf, warehouse strategy enables you to not only track your inventory, but to analyze potential opportunities to increase your warehouse’s revenue.
For instance, by identifying patterns such as types of inventory or major clients, seasonality, and other trends that affect consumer purchasing (and thus, order fulfillment), you can use this information to create marketing campaigns to attract more clients, either doubling down to get more of the same kinds of business and goods you already work with or diversifying to off-set quieter seasons.
More Control Over Inventory
As you’re collecting data and analyzing your inventory patterns, you’ll naturally also have the ability to control your inventory more. From the way it moves in and out of the warehouse to how it’s stored, you’re also given insight into what inventory you can get rid of. Indeed, merchandise that’s just collecting dust is taking up valuable space that could otherwise be used for more profitable inventory.
When developing your warehouse strategy, be sure to include acceptable timelines to hold onto inventory. While these rules don’t need to be hard and fast (after all, the market is often chaotic), establishing expectations on how long to hold inventory before considering it a consistent loss will enable you to make better decisions on how you manage your inventory and the space it takes up.
Finding Opportunities for Automation
With so many tools available like AI, robots, and LowCode or NoCode solutions, it can be overwhelming knowing when and how to automate your warehouse. With a warehouse strategy, you’ll be able to pinpoint exactly where you can slot in these helpful technologies and how they’d affect the rest of your operations.
While automation might require a bit of upfront investment, a good warehouse strategy will enable you to prioritize what areas of your warehouse’s operations could use the most help. This will not only give you insight on how to spend your money, but more control on when and where to spend it.
Increased Agility and Responsiveness
All of these benefits boil into increased agility and responsiveness for your warehouse and its team on the floor. With a better top-down perspective for your managers, they can then ensure your teams’ workflows are as efficient as possible without running anyone ragged during the busiest seasons. With that in mind, be sure to create a warehouse strategy that’s flexible enough to adapt to any changes in the market but rigid enough to ensure consistency and meet (and exceed) expectations for your management team and your clients.
Considerations When Updating Your Warehouse Strategy
With all of its benefits, developing and implementing a new warehouse strategy isn’t something that happens overnight. Before you decide to undertake this challenge, consider a few of the following factors:
Technology is amazing but it can also come with a hefty price tag. From digital warehouse management systems to robots that can pull together orders that are ready to ship out, supplementing old processes with new technology can require a significant upfront investment.
Any time there’s a change in policies and procedures means there’s new training that needs to be rolled out. In addition to the time it takes to train employees on these new processes, be sure to include the time and energy used to develop the training itself. Warehouse strategy is meant to make things easier, not harder; if the new processes aren’t taught in a way that’s intuitive or shows value to your workers, it’ll be difficult to get the full benefits of your new strategy.
Balancing Customization with Standardization
There are plenty of warehouse strategy templates, software options, and technologies available – and when there aren’t, you can always develop your own. However, you have to ask yourself the question of how much customization do you really need? Having granular controls over some aspects of your strategy – like inventory accuracy and fulfillment times – can be a boon to your warehouse. But you don’t need to necessarily manage every single half-inch of warehouse space to the point of obsession.
With that in mind, talk to your warehouse managers about common problems they experience and start there, getting only as detailed as necessary to get the job done rather than bog your team down with unimportant non-factors.
Develop Your Warehouse Strategy with UCanTrade
One of the best ways to ensure your warehouse’s profitability is through having a solid warehouse strategy. Whether you’re trying to create your first strategy or revamp an existing one, UCanTrade excels at using the most effective warehouse processes that save our clients time, money, and energy.