What Is Warehouse Logistics? How To Manage a Warehouse (2024)

A product you order online goes through several stages before arriving at your doorstep.

A small business might retrieve the item from a storage area, manually record details, pack and turn the product over to a shipper.

Large brands, however, use extensive warehouse networks, with items moving along shelves, conveyor belts, and loading docks, while they’re electronically cataloged, stored, and prepared for shipment.

Well-executed warehouse logistics can ensure faster order processing, lower costs, and higher customer satisfaction. While, inefficient warehouse logistics can mean delayed shipments, incorrect orders, and damaged goods.

Here’s how to streamline your warehouse logistics, so you can avoid issues, lower your costs, and improve customer satisfaction. Learn tips and technologies for optimizing your inventory management, picking and packing processes, and warehousing operations.

What is warehouse logistics?

Warehouse logistics refers to managing the flow of goods and information within a warehouse, from receiving and storing inventory to picking, packing, and shipping orders. It includes inventory management, order processing, material handling, and quality control.

The goal of warehouse logistics is to enhance the efficiency of your warehouse and boost customer satisfaction by fine-tuning warehouse space and reducing order processing time.

Warehouse logistics vs. supply chain management

Although warehouse logistics and supply chain management are closely related, they are distinct concepts. Warehouse logistics focuses specifically on the processes and activities within a warehouse, like receiving, storing, picking, packing, and shipping goods.

Supply chain management is broader in scope. It involves the planning, coordination, and control of all activities across the entire supply chain—from raw material procurement to delivery of finished products. It includes warehouse logistics, supplier relationship management, demand forecasting, transportation, and reverse logistics for customer returns.

Tips for improving warehouse logistics

Effective logistics can create efficient warehouse operations and reduce costs. Here are seven tips to help you overcome common logistical challenges and transform your warehouse into a well-oiled machine:

Implement a warehouse management system

A warehouse management system (WMS) is a software solution that enhances and automates warehousing processes. It provides real-time visibility into inventory levels, order statuses, and employee productivity. It’s the foundation of a well-functioning warehouse logistics system. Warehouse managers use it to oversee inventory management and devise strategies to improve warehouse logistics, like reducing waste and ensuring safety.

Inaccurate inventory tracking and a lack of real-time information can hinder efficient warehouse logistics, causing misguided decisions that lead to stockouts, overstocking, and higher costs. Implementing a WMS—with features like barcode scanning, automated picking routes, and real-time data analytics—can improve operational efficiency and accuracy.

Popular WMS options include Oracle’s NetSuite WMS, SAP Extended Warehouse Management, and Blue Yonder’s WMS.

Optimize warehouse layout and storage

A disorganized warehouse with an inefficient configuration slows logistics, wasting time, increasing labor costs, and posing safety hazards. For instance, a food distributor might struggle with expired products in the absence of real-time tracking, causing financial losses and health risks.

To resolve these issues, a warehouse manager can optimize warehouse layout and storage systems. Analyzing the current layout, identifying bottlenecks, and redesigning storage space can maximize efficiency. Strategies like zone picking, ABC analysis for grading inventory quality, and using vertical space with proper shelving and racking systems can improve storage density and reduce pickers’ travel time.

Streamline the order picking processes

Technologies like barcode scanners or voice-directed picking tools can minimize travel time, reduce errors, and improve overall picking efficiency. To streamline order picking, consider implementing picking strategies like batch picking, wave picking, or zone picking:

• Batch picking. This method involves grouping similar items together and collecting multiple orders simultaneously to reduce travel time and improve efficiency.

• Wave picking. This picking strategy releases orders in waves at predetermined intervals, allowing pickers to focus on a specific set of orders and improve productivity.

• Zone picking. By dividing your warehouse into distinct zones with each picker assigned to a specific zone, you can reduce travel time and increase pickers’ familiarity with the products in their area.

Leverage automation and technology

Manual processes and outdated technology can cause inefficiencies, errors, and lack of real-time monitoring throughout your supply chain. Don’t shy away from automation and technology to address these challenges. Radio frequency identification (RFID), automated guided vehicles (AGVs), and voice-directed picking, provide accurate real-time data. This lets you track inventory levels, monitor key performance indicators (KPIs), and improve processes like receiving, putaway, and order fulfillment.

In addition to a WMS, consider transportation management systems (TMS), inventory management software, and other warehouse management software solutions like enterprise resource planning (ERP) and customer relationship management (CRM) systems. Physical automation tools like conveyor belts, sorting machines, and automated storage and retrieval systems (AS/RS) can also streamline material handling processes.

You can also improve warehouse logistics by using voice picking solutions for faster order fulfillment. A sporting goods retailer could use voice picking solutions, with workers wearing headsets that give verbal instructions on which items to pick and where to find them in the warehouse.

Establish efficient returns management procedures

Customer returns are common due to product defects, incorrect orders, or dissatisfaction. Inefficient returns management can increase costs and strain your company’s supply chain. If your warehouse lacks a streamlined process to inspect, repair, or dispose of damaged items, it may lead to increased storage costs and potential inventory discrepancies.

To establish efficient returns management, develop a clear returns policy outlining acceptable reasons, time limits, and any fees. Then, implement a dedicated returns processing area in your warehouse where staff can quickly inspect, sort, and determine the appropriate action for returned items, like restocking, refurbishing, or disposal.

Barcode scanning and integrated inventory management systems can help accurately track returned items, update inventory levels in real-time, and minimize errors.

Invest in employee training and development

Some companies outsource logistics to third-party providers, but for those managing their own warehouses, investing in employee training is crucial. Poorly trained warehouse staff can cause more mistakes, mishandle perishable goods, inaccurately track stock levels, and increase accident risks.

To address these issues, implement training programs covering safety protocols, material handling techniques, inventory management, and use of the right equipment. This gives employees the necessary knowledge and skills to make fewer mistakes and perform their jobs effectively.

Continuously monitor and analyze performance metrics

Continuously monitoring and analyzing KPIs, like order accuracy, inventory turnover, and timely delivery rates, is crucial for identifying trends, bottlenecks, and areas for improvement. Without it, inefficiencies, increased operational costs, and challenges in meeting customer demands may arise.

For instance, a company might set a 99.5% order accuracy KPI, but realize it’s currently at 95%. To address this, it could implement a barcode scanning system and provide additional staff training, to improve accuracy rates.