A guide to warehouse optimization and reducing costs

Warehouse operations are the backbone of any supply chain, as they cover the storage, handling, and distribution of goods. However, warehouse operations can also be costly, inefficient, and error-prone if not managed properly. Warehouse managers should always be striving to streamline processes and reduce warehouse operating costs

Illustration showing operational supply chain

In this guide, we describe industry-wide best practices to optimize warehouse operations, as well as explaining the importance of data collection and analysis. We’ll then go on to highlight how industrial AR solutions help improve warehouse picking efficiency and the level of cost savings that could be achieved.

5 ways to reduce warehouse operating costs

  • Design a floor plan that meets your needs

    A well-designed layout can improve the flow of goods, reduce travel time, and increase space utilization. When configuring your floor plan, you should consider the type, size, and frequency of your inventory.

  • Zone your inventory according to demand and usage

    You should store the most frequently picked items in accessible locations, e.g., towards the front or on lower shelves. You should also group similar items together, classifying items by category, size, or color. This can reduce the search time and improve the accuracy of picking.

  • Have a backup plan

    Warehouse operations not only face natural disasters but also disruption caused by, for example, power outages, equipment failures, or labor shortages. You should have a backup plan to deal with these situations, covering alternative suppliers, backup generators, spare parts, or contingency staff.

  • Make safety a priority

    Safety should always come first. You must provide your workers with proper equipment, signage, lighting, ventilation, and training on emergency procedures. You also need to comply with all relevant safety regulations and standards to avoid any lawsuits or penalties arising from accidents or injuries.

  • Streamline your returns process

    Returns are inevitable in any business, but they can also be a source of waste and inefficiency. You should have clear policies and procedure for handling returns, including inspecting, accepting, sorting, and restocking them. 

Using technology to optimize warehouse operations

No matter what the size and complexity of your warehouse operations, you can leverage technology to optimize your processes. A priority should be to automate your data collection. Analyzing your current data is essential for improving warehouse operations but, when done manually, it can be a time-consuming process subject to human error.

Technologies such as barcode scanning, RFID reading and voice recognition capture and transmit accurate data quickly and securely. And with this data, you’ve got a real-time overview of your warehouse operations, so you can identify (and solve) bottlenecks and inefficiencies.

Another crucial element to optimizing warehouse operations and reducing costs is inventory management. Thanks to accurate, real-time data, you can keep a close eye on your inventory levels, locations, movements, and status.

You can also implement tools such as demand forecasting, automated reorder points, and regular cycle counts to ensure that you have enough inventory to meet customer demand, but not too much that it causes overstocking or obsolescence.

How AR technology can improve warehouse operating processes and costs

One of the new technologies that can help optimize warehouse operations and reduce costs is augmented reality (AR). Put simply, augmented reality enhances the real world with digital information and media, such as text, images, videos, and sounds. It creates an immersive and interactive experience for employees, who can see both the real and the virtual elements in their field of view.

Industrial AR solutions such as vision picking are designed to support manual order picking, inventory control, and most other logistics processes.

Speedy order picking

AR reduces order picking time by showing pickers navigation guidance and item locations.

Accurate order picking

Any mistakes can be spotted immediately, alerting pickers through their smart glasses.

Ergonomic order picking

AR eliminates the need for handheld scanners or paper lists, enabling hands-free working.

Flexible order picking

AR makes multitasking easier and supports multiple order picking schemes such as batch, cluster, or wave picking.

vision picking

Support your workforce with xPick

With xPick, you can tailor instructions and onboarding to the individual preferences and needs of the warehouse team. For example, by providing information in the picker’s preferred language or adjusting number of verifications to match different qualification levels.

And with hands-free and voice-controlled operation with xPick, workers can handle bulky or heavy items safely and comfortably, making manual logistics more ergonomic.

Frontline xPick delivers valid improvements in warehouse picking efficiency

Frontline xPick is a cutting-edge vision picking solution that delivers proven warehouse process optimization. xPick is a patented and award-winning AR software that runs on smart glasses, showing workers the order data they need, when they need it. It reduces errors by providing real-time feedback and verification, alerting pickers if they select the wrong item or quantity, or if there are any changes in the order.

xPick is part of Frontline, TeamViewer’s enterprise productivity platform. The solution can be easily configured and updated to suit the specific needs of each warehouse. And it seamlessly integrates into existing warehouse management systems or other backend systems

Frontline xPick transforms warehouse efficiency

Frontline xPick has been successfully implemented by leading logistics companies across the globe. They have reported significant improvements in productivity, quality, and customer satisfaction.

Proven results include:

  • 15% increase in productivity
  • 25% increase in picking speed
  • reduced error rates to 0.1%
  • 50% saving on onboarding time

Frequently asked questions about warehouse optimization

Some ways companies can optimize warehouse operations include implementing efficient storage strategies, deploying a warehouse management system, and adopting smart AR technologies. All these measures can enhance accuracy and efficiency, thereby reducing costs.

Companies can improve pick rates by investing in new technology such as AR, which has been shown to increase warehouse picking efficiency by up to 25%. What’s more, thanks to integrated barcode or RFID scanning, errors can be reduced to almost zero. Overall, AR-based picking solutions, such as TeamViewer Frontline’s vision picking solution xPick, have increased productivity by 15% in some cases.

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