How to organize a warehouse to optimize resources

Focusing on warehouse organization is crucial for ensuring smooth operations inside your facility.

How to organize a warehouse

Knowing how to organize a warehouse is essential for the success of any business with logistics operations. An orderly warehouse not only helps achieve business goals but also enhances safety, improves workflow efficiency, and reduces errors.

The first step to organizing a functional facility is designing it. This phase is critical because a poor layout can hinder processes. For this reason, it’s advisable to consult storage experts before renovating an existing warehouse or setting up a new one. Likewise, even the best layout won’t be effective without a well-trained team.

In the early stages of organizing a warehouse, you’ll want to consider factors such as market trends, business strategy, sales model, supply chain structure, production requirements, available space, and financial resources.

How do you lay out a warehouse efficiently?

Paying attention to the layout of logistics facilities and planning how to organize a warehouse maximizes available space, saves time across all processes, and optimizes costs. -Ultimately, it increases company profits.

• Choose the right storage method. There are three ways to determine the management of unit loads, based on a previously conducted functional analysis. In fixed or static slotting, each SKU is assigned a designated location in advance. In random or dynamic slotting — also known as chaotic warehousing — goods are placed in any available space. Lastly, mixed or semi-random slotting combines both approaches.
• Leverage vertical space. Warehouses have limited floor space, so making the most of their full height is key to maximizing efficiency. This means opting for high-bay manual racks or, when possible, automated storage and retrieval systems (AS/RS), which are more effective.
• Anticipate needs. Rather than focusing solely on the short term, logistics managers should plan ahead to keep operations running smoothly and address potential challenges proactively.
• Factor in inventory turnover. Knowing which inventory is in the highest demand at any given time makes it possible to organize a warehouse based on product rotation. Placing top sellers in easily available locations leads to more orders fulfilled.
• Implement cross-docking. When incoming goods go directly to the picking area without being stored on racks, it reduces handling time, storage tasks, delivery lead times, and costs.

What happens when a warehouse is untidy?

Failing to manage a warehouse properly complicates daily operations and can hurt a company’s performance and reputation. These are some common consequences:

• Products are hard to find. If employees don’t memorize locations and the facility isn’t kept organized, locating items becomes difficult. This slows down all processes and can even lead to inventory shrinkage.
• Excess or shortage of inventory. Without an orderly storage system, companies may unknowingly accumulate overstock. Conversely, they may assume certain items are on hand in the warehouse when they’re actually experiencing a stockout.
• You need more space. When products are placed haphazardly and aisles aren’t respected, it’s easy to feel like there isn’t enough room. However, making smart use of available space significantly improves efficiency — which is especially important when organizing a small warehouse.

How to keep a tidy warehouse

Facilities that maintain a clean and orderly workspace save time and effort, improving both productivity and safety. One widely used method, originating from Japan, is the 5S system, which ensures organization through the following steps:

• Sort (seiri). Remove anything unnecessary to free up storage space.
• Set in order (seiton). Equip the warehouse with the right tools to position products strategically and locate them quickly.
• Shine (seiso). Establish a schedule for regular maintenance and cleaning tasks.
• Standardize (seiketsu). Use proper signage to minimize misclassification errors and maintain order.
• Sustain (shitsuke). Turn cleaning routines into habits to prevent excessive dirt and clutter.

What are the steps to organize a warehouse correctly?

Here are some common issues in logistics facilities and the solutions to overcome them:

Examples of pallet rack organization

Although automation can take a company’s performance to the next level, these corporations operate highly efficient warehouses using manual racking systems:

• Leroy Merlin. The French DIY, home decor, and gardening company redesigned its business strategy by opening new urban stores in Spanish cities such as Madrid and Barcelona while boosting online sales. To support these projects, Leroy Merlin equipped its two warehouses in Torija (Spain) with selective pallet racking. Standing 34.4' high, they provide a storage capacity for over 21,600 pallets and can accommodate any type of SKU, regardless of weight or volume.
• SMU. The Chilean supermarket’s logistics center in Pudahuel, near Santiago, spans 17.3 acres and can store approximately 47,000 pallets. This significant retail player in Chile has a long conveyor system and racks with picking performed on the lower levels. These have been reinforced with double-column frames for added security, minimizing the effects of potential earthquakes, as this warehouse is located in a seismically active area.
• Radec. Mexican spare car parts importer and distributor Radec, which operates centers in Villahermosa, Tijuana, Monterrey, and Guadalajara, has grown rapidly in recent years. However, this expansion led to a lack of space in its facilities. After consulting with Mecalux, Radec installed pallet racking and multi-tier shelving to prepare up to 1,800 pallets a day at its Guadalajara headquarters.

Organize your warehouse with Interlake Mecalux

At Interlake Mecalux, our storage systems, AS/RSs, and WMS solutions drive the operations of all kinds of facilities. We work closely with our clients, tailoring our warehouse management system to their particular needs. If you’re looking to enhance your supply chain, feel free to contact us — we’ll help you optimize your logistics operations.