The warehouse consumes the largest physical space of any manufacturer or distributor. Some warehouses are organized, while others seem as if a tornado passed through them. The organization of a warehouse affects the business.

Do you doubt the accuracy of the system? Are you and/or your team members running around wasting time looking for inventory? Are you adjusting counts on a daily basis? Do you wonder why you are consistently running out of warehouse space? Do you have old inventory tying up cash that could have been invested into other areas of the business? These scenarios are all by-products of a disorganized warehouse; all of them impact your bottom-line profits.

Here are 10 steps to organize the warehouse:

1. Utilize metrics - Know the purpose for the metrics. Understand the industry standards and setup quantifiable baselines for the improvement areas. You always need to know where you are starting to know if you are moving in the right direction.



2. Review the ERP - Understand the capabilities and functionalities of your ERP. Compare it to your evolving business requirements to determine if the system will fit your growth plans.



3. Establish movement procedures - Set standards on inventory movement methodologies between the warehouse locations, among the warehouse bins and also within the ERP. You will need to know what, who, why and how the inventory items are moving within the business.



4. Categorize inventory by ABC - Determine inventory items that are selling from those that should be liquidated. Remember, ABC's are based off of hits, not just the quantity sold. This allows the decision makers to focus on the inventory items that really impact the business.



5. Generate labels - Label all warehouse areas, isles, shelves and bins with a consistent naming system. Labeling speeds up fulfillment and research time while allowing team members to back each other up in case of emergencies.



6. Perform a full inventory count - Count all inventory items at least once a year. This makes sure the system is reflecting accurate and updated information. Remember, garbage in will yield garbage out.



7. Liquidate inventory - Review and remove all the C+ ranked inventory items from the warehouse, freeing up space and cash while reducing shrinkage



8. Revise the floor plan - Revise the warehouse floor plan based on evolving business requirements. Keep an updated warehouse map at the entrances of the warehouse for faster emergency support. This allows the business to maximize the space and flow as new products are introduced and old products are liquidated.



9. Utilize cycle counts - Perform cycle counts on a daily/weekly basis based on the ABC status allowing for continuous inventory monitoring and ability to address challenges in a short period of time.



10. Research new technology - Review new technologies to reduce repetitive low value-added tasks instilling a mentality for continuous improvements.