How Can We Improve Warehouse Efficiency?

warehouse storage

When products are picked, packed and delivered on time, it is easy to assume that a warehouse is working efficiently. But it can be startling to realise how little tweaks in the process can make a massive impact to the bottom line.

Constantly looking for ways to increase warehouse productivity is a priority for warehouse managers but it can be difficult to work out which areas will have the biggest impact.


Here we look at a few helpful tips for improving efficiency – which can be applied to any size of warehouse.

Know your KPIs

You can’t improve what you don’t measure so capturing and measuring your KPIs is a critical part of the process. The metrics you might want to be measuring include costs on shipped orders – per box, pallet or line and how much returns cost your business?

Keep in mind that 3-5 key metrics is best. And these should be easily accessed and measured. If getting hold of the data for a particular metric takes days, you’re either focusing on the wrong metric or the system may need changing so you can get the data easily.

Once you have a baseline established, you can start to look for improvements. Giving regular updates on performance to both management and employees helps to focus attention in the right areas and often highlights areas for further improvement.

Having targets to work to and tracking performance against those targets gets individual employees involved in the improvement process.

 Review warehouse layout

One of the key things to look into is your warehouse layout. Keep efficiency in mind and draw up a plan of how the warehouse needs to be arranged to best serve the business. Draw the plan as though you’re looking down, keeping the following in mind:

  • Entrances and exits
  • Type of storage (such as pallet racking or stacking)
  • Possible issues such as health and safety
  • Outdoor storage options

Group similar items together and establish material flow paths. By keeping similar goods together, you may reduce the time taken when collecting goods to be despatched. If certain items differ but are commonly dispatched together you might want to keep them side by side.

Material flow paths show the flow of materials around the warehouse; where they come in, where they are stored, where they are stored prior to dispatch and where they leave the warehouse. By charting the flow of goods around your warehouse, you will be able to recognise health and safety issues, places where possible bottlenecks might happen as well as any distances which can be reduced.

Also, consider replenishment factors. Does some stock need replenishing more often than others? Is your layout best suited to the actual tasks that need to be carried out to keep the warehouse running super efficiently?

Types of storage

The type of storage you use can be one of the key optimisations. Working out how to store goods on suitable racking close to dispatch points is more efficient than having warehouse staff needing to travel a further distance. There are a number of different storage systems available which can be combined under one roof for ultimate storage capacity.

Pallet racking systems are common and highly efficient storage units which come in a variety of sizes. Racking is best suited for items that are kept in the medium to long term within a warehouse.

Stacking goods loosely on top of each other can be a good fix and best suits products that need a quick dispatch.

Other less well-known types include:

A lesser used option for maximising pallet racking space. Tunnels are like bridges between sets of racking on which goods can be stored.

  • Rack over docks or over dock storage

Like tunnels, but allows for storage over spaces such as entrances. This could prove to be a very efficient means of reducing time is takes to bring goods to loading areas.

Add an extra layer of flooring for storage.

For different types of shelving, see our guide to choosing shelves.

For different types of warehouse storage systems, see this guide.

  • Cross Decking

Cross docking can refer to unloading from a vehicle straight into another without the need for storing in-between. This might suit some businesses though you might opt for the other type of cross docking where goods are unloaded then checked or processed and perhaps broken down or stored in stacks before being loaded onto another vehicle. This option might save the work of moving goods to pallet racks and back again.

Perhaps the timing of goods in and goods out could be matched so you don’t need to use longer term storage?


Once your floor plan is complete you may want to draw up procedures. Start with common processes and use the practices within the warehouse as a start point. Look for efficiencies and talk to staff to see where they think efficiencies can be made.

Bear in mind that there is no point in enforcing a procedure in one area if there are inefficiencies in another – so when doing this exercise, make sure you work through the process as a whole.

Procedures for dealing with incoming goods down to cleaning can give a boost to getting your warehouse running more smoothly.

Accident preparation

We would also recommend taking this time to consider accidents or clearing spillages or fixing damages.

How can this be done while maintaining maximum efficiency? Do people need to travel a long way to find spillage soaking materials for instance? Make sure this type of equipment is placed at key junctions or near to places where you think a spillage is most likely to take place.

If certain people need to react and work to resolve a situation, make sure they are trained and know what to do to get things back up and running as quickly as possible.

It is also essential to keep the logging of incidents easy and accessible so that accidents are always recorded as soon as practicable after the incident.

Maintenance and good housekeeping

Once your plans are in place, make sure you maintain good standards and pencil in time to review and evaluate the effectiveness of your plan.

Maps, signs and labels

Your floor plan can be posted in every convenient place in the warehouse to help minimise the time it takes for workers to check locations. Keep one in the wall of the break room so that remembering where everything is located can be absorbed as much as possible.

Try colour coding to improve effectiveness and always keep them up to date.

Signs to clearly mark what area workers are in and what goods are stored can further help speed up the job. Arrows pointing the direction of key goods that are handled most often may also be a good idea.

Labels are another key technique to increase efficiency. Use stickers, paper inserts or more permanent signs to help people identify goods. This can be done by product name, number, category or any way you deem to be best for your business.

To maximise the efficiency of your warehouse, retail or office space, contact us today to let us know how we can help.

About Pallet Racking Systems

As a well-established pallet racking company with four decades of experience, we are seasoned experts in warehouse racking solutions. Located in Willenhall, we take pride in sourcing and delivering pallet racking throughout the West Midlands and neighboring areas.

If you’re searching for top-tier shelving and racking suppliers, we invite you to visit our facility. Come see how we can help you efficiently tackle your logistical challenges with precision and expertise