5 Problems Caused by a Messy Warehouse

. . . (and 3 ways to start fixing them)

Over time, a warehouse accumulates materials and often, personal possessions.  It’s normal. However, an unorganized or messy warehouse indicates more than a penchant for clutter. It can indicate a lack of consideration for inventory and even employee safety.

For example, encumbrances in the warehouse aisles (pallets, shrink wrap, etc.) are not only safety hazards, they affect the throughput rate per warehouse worker – impacting the profitability of the site.

There may be good reasons why a messy warehouse is difficult to clean, such as dust from gravel parking lots or unsealed floors. Regardless, let’s face it: Cleanliness is a confidence builder, and it’s the #1 for taking a fresh look at warehousekeeping.

The people who view the same environment day in and day out eventually don’t “see” it in the same manner as an outsider might. A warehouse manager may know where every piece of inventory resides, even if the facility looks jumbled and unorganized. But to other people, the messy warehouse can signal deeper problems with a facility and a business.

1. Dissuades potential clients

To a customer or supplier visiting the site, warehouse disorganization can indicate that accurate picking and on-time shipping are problematic. Potential business deals can be threatened if a customer sees a cluttered facility and decides that your company probably can’t be trusted to ship accurate orders. Your client wants to know that it can depend on your warehouse. When it sees a warehouse in disarray, it loses confidence in you as a supplier. To quote another adage, appearances can be deceiving; but in this case, where reputations are on the line, the larger customer may not give the smaller warehouse the benefit of the doubt.

2. Creates management problems

To a company CEO, a dirty warehouse may imply that supervisors have lost pride of place or that employees are not being held accountable for accurate processes. Executive management can come down hard on managers who don’t appear to have control of their domain.

3. Decreases employee morale

In this case, good warehousekeeping indicates that company management has placed a priority on employee safety, excellence and adherence to standards. On the other hand, disorganization may signal that the company doesn’t take much interest in its facilities outside of the corporate offices. If warehouse employees believe that their personal comfort and safety aren’t important to management, a serious drop in morale is going to take place. In fact, poorly maintained facilities can even contribute to a higher employee turnover rate, increasing human resources costs and slowing down your fulfillment rate as new employees need to be trained.

4. Decreases efficiency

If you need to move pallets in the putaway aisle to access a pick location, that’s an obvious bottleneck to productivity. When employees have to step around boxes, search for missing inventory, or paw through the returns bin to fulfill and order, valuable time and energy is being wasted—time better spent filling more orders.

5. Impedes processes improvement

If the warehouse is a jumble of mismatched inventory mixed with returns in no logical order, it will be difficult to get a handle on whether or not picking processes can be improved. It will also be impossible to establish the criteria for task simplification, something that will contribute to savings in labor costs.

Three steps to fixing a disorderly warehouse

Establishing standards for order and cleanliness in a messy warehouse can actually pay huge dividends. Good warehousekeeping can result in better customer service through better inventory management, improved worker safety, savings in labor costs, etc.

Step 1: Designate a “warehouse champion”

In almost all instances, a clean, organized warehouse has a “champion” on board: someone, often the warehouse supervisor, who serves as the visionary for identifying ways in which the warehouse can add value to the organization and its customers.

Choosing a warehouse champion is the single most important step in any warehouse improvement efforts. In the same way that you wouldn’t get an NFL team to the Super Bowl without a coach, you won’t be successful in your efforts to change the way your warehouse works without a warehouse champion. You can read more about how to choose a warehouse champion for your warehouse here.

Step 2: Assess the state of the warehouse

The warehouse champion’s first order of business will be to undertake an honest assessment of the state of the warehouse needs to take place. The warehouse champion will determine the following:
• Are the aisles clear of debris?
• Are returns and write-offs in a designated area, or are they scattered throughout the facility?
• Are pallets neatly stacked?

A warehouse champion can look at your warehouse clutter and see more than a mess – they see specific problem areas with processes that need to be cleared up. For instance, a pile of boxes in the middle of an aisle may seem normal, but it actually indicates a larger problem with the way bins are organized. Simply cleaning up the boxes isn’t enough – the warehouse champion should know how to reorganize the bins so that unpacking takes place where it should.

Step 3: Let the clean up begin

Warehouse clean-up can, and should be, a group effort. While the warehouse champion is the designated leader of the warehousekeeping effort, every warehouse employee should be taking part. (Industrial clean-ups that require specialized equipment or chemicals are obviously a different story altogether).

Your warehouse champion will start the effort by setting rules for clean-up; how clutter is to be dealt with, ground rules for reporting inefficiencies, and guidelines for how to dispose of packing materials and other debris. In some cases, you may need to invest in more disposal containers, like recycling and garbage bins. In other situations, your solution might be as simple as creating an unpacking station within Receiving to remove and dispose of excess packing materials.

Warehouse champions will also develop standards for how to deal with deadstock, write-offs, and returns. These items need to be organized into centralized areas to make them easy to find and deal with.

When do you start?

Reducing your warehouse clutter not only improves the picking efficiency and throughput, but also morale, employee safety, and ultimately – profitability.

So take a look around. Really see what the state of the warehouse is – and then use that visual survey to start down the road to more profitability through good warehousekeeping.

PathGuide offers warehouse assessment surveys as a first step in its customer evaluation program for its Latitude Warehouse Management System (WMS). For more information, or to discuss having a warehouse assessment conducted by a PathGuide expert, please contact us at 1-888-627-9797.