How to avoid sub-optimization in warehouse production

There are many ways to increase efficiency in warehouse and getting the most of your resources. What many companies forget is avoiding sub-optimization in the whole warehouse, instead they focus on each department individually.

A good option is floating job positions. The management can for example make weekly schedules where employees have new workstations on a weekly basis. The workstation is just a starting point. As the conditions, change during the day the supervisors/team-leaders move resources between departments and work processes.

Warehouse work is relatively monotonous, through job rotation, you get a greater stimulation, and you change colleagues frequently. You minimize the risk of problems and frictions in working relationships.

You also get warehouse assistants who have a broad range of skills that makes it easy to support other departments that not have enough resources, for example due to holidays or maybe have peaks in e-commerce or promotions or seasonal goods.

We humans are by nature creatures of habit we like to have routines and to feel secure in our comfort zone. Therefore, many companies have their warehouse assistants stationed in one department and sometimes even stationed on a particular work process. It makes us feel safe and comfortable. It is important that the management not giving way to the this kind of views. It is not efficient or optimal for the business. It is not good from the employees perspective either as it becomes repetitive strain injuries of monotonous working.

Another effect of allowing employees become too permanent in a department is that we feels loyalty to our department and not the warehouse as a whole, and then it will be sub-optimization in the warehouse. There is unwillingness to help other departments that have a high workload. I have seen examples where management hires resources to a department because of heavy workload while another department has an overcapacity instead.

This is a leadership issue. It is important that management communicate to the employees that it is the big picture that counts, it does not matter if 5 out of 10 departments are efficient. It is in everyone’s interest that all departments are efficient. Senior management is not interested in details, only the last row in the budget result.

It is not possible staffing a warehouse optimally by department. However, you can get far if you move resources between departments and tasks throughout the warehouse. The workload is not continuous or evenly distributed across all departments.

It is a complex work using resources optimally in the warehouse, particularly in large warehouses with many departments and hundreds of employees. It is impossible to do the optimization manually. Modern WMS have sophisticated tools for this. WMS analyzes and calculates need for resources using historical data and existing orders and number of assignments in the system. LMS (labor management system) is another great tool to help management use resources as optimal as possible. If your WMS don’t have LMS functions or modules there is great third party software you can implement. It is a great support for analyzing efficiency and work load in the warehouse. If you want to be really efficient I can promise you, that some kind of tool is necessary to measure worked hours in each department when you use rotating and floating workforce. It is impossible to keep track of all hours in each department in a manual way.

It requires a strong and good leadership in order to utilize the resource calculation tools. It is up to the warehouse manager and supervisors manually move resources from areas of low workload and resource abundance to the departments that need strengthening. Often there is an unwillingness to be moved and it creates tension in the relations between staff and between staff and management. It is important that the management communicate to the staff that they are employed in the warehouse not in one department. Management must explain that it is in everyone’s interest that the entire warehouse is cost-efficient so that the company can remain competitive.

It is required that the company is investing in leadership training for warehouse managers and supervisors so that they dare to take difficult discussions and dare move staff continuously. If supervisors hesitates and avoids it means efficiency losses. In a large warehouse with several hundred employees, it can mean big economic losses in poor efficiency. It can also mean a big difference in the level of service if several departments are behind in goods receiving. Poorer level of service means lost sales or lost production.

Important to remember:

  • A policy describing that you are employed in the warehouse not in a department. It is the employee’s responsibility to see the big picture.
  • Job rotation, if there is a large warehouse, you cannot rotate over the warehouse but within the department. You secures warehouse production if as many as possible have expertise in so many work processes as possible.
  • Move staff between departments. Moving staff as soon as there is a need, everything to avoid sub-optimization.
  • The larger the warehouse the more important WMS has great tools for capacity calculations and planning of resources in the warehouse. LMS (labor management system) is a great tool, some WMS have LMS as a module.
  • Last but not least, strong and good leadership. It does not matter how good WMS tools you have if you do not have good leadership that dares to take decisions and communicate decisions in a good way.

If you want to read more about LMS you can read my article:

Benefits of a labor management system in warehouse production

Roberth Karlsson

1 Comment

  1. Can optimization be done without featured WMS and/or LMS?

    Definitely, yes. It is a matter of leadership and techniques that can be set up.

    I always have had a problem in the warehouses I’ve been working for improvements. None of them had optimization modules in their computer systems, but my customer WANTED RESULTS NOW. The answer to demands for new systems would have been: not now, we do not have money.

    Saludos cordiales.

    Juan Carlos Viela

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