Questica Blog

5 ways engineer-to-order manufacturers can optimize their warehouses

Using a cloud-based ERP system is a great way for engineer-to-order manufacturers to streamline their warehouse workflows.

If the research and development department of an engineer-to-order manufacturing company acts as the brains of an organization, then the warehouse would most certainly be the backbone. The materials and parts stored in the inventory prop up the business and it’s these pieces that allow the production line to build the final product. Any congestion in the warehouse workflow or bumps in the overall efficiency will ultimately slow down the manufacturing process and even create unexpected downtime.

Unfortunately, some custom-design manufacturers keep their warehouse needs at the bottom of their priority list, and instead focus all of their time on R&D or perfecting the production process. However, without an optimized warehouse system in place, it can be a major detriment for the company. This makes it imperative for manufacturers that build engineer-to-order products to run a streamlined and efficient warehouse to boost overall productivity across the entire enterprise.

Managers at engineer-to-order manufacturers can incorporate these tips to improve workflows and efficiency in their warehouses:

1. Don’t hesitate to reorganize

Although overhauling the warehouse might seem like a waste of resources, a quick reorganization of parts and products can ultimately streamline the warehouse workflow and boost the overall efficiency of the workers, which can lead to additional cost savings and potentially a slight bump in profit margins.

While there are numerous ways to effectively organize a warehouse, and each company will have to determine what best suits its needs, there are a few rules of thumb that can benefit nearly any enterprise. For example, ShelfPlus, an industrial storage solution company, suggested creating a warehouse within a warehouse. The typical ratio for many standard warehouses benefits from using Pareto’s law, which states that 80 percent of SKUs stem from 20 percent of orders (or a slight variation thereof). By creating a smaller section within the warehouse specifically to handle this 80/20 divide means workers can cut down on the travel time within the space and boost their productivity.

Engineer-to-order manufacturers shouldn't hesitate to reorganize their warehouses to optimize efficiency.Engineer-to-order manufacturers shouldn’t hesitate to reorganize their warehouses to optimize efficiency.

2. Increase the safety programs

Warehouses can often be one of the most dangerous areas of the company. As noted by the Occupational Safety and Health Administration, compared to the national average for all industries, the warehousing industry has a higher fatal injury rate. This is due to many of the unique factors that face warehouse workers, such as:

  • Improper forklift usage
  • Repetitive motion injuries
  • Failure to adhere to proper lockout/tagout procedures
  • Unstable product stacking
  • Poor fire safety provisions
  • Neglecting to wear the proper personal protective equipment

Any one of these problems can potentially bring the warehouse to a standstill, sending delayed ripples downstream throughout the entire production line. By maintaining a high level of safety in the warehouse, the chances for injuries or fatalities that could pose significant problems for manufacturers are reduced.

It’s important for warehouse managers to implement robust safety policies and ensure that all workers are thoroughly trained in preventing hazards and effectively responding to accidents when they arise.

3. Require vendor receiving appointments

One of the biggest obstacles to maintaining an efficient warehouse is unexpected or delayed deliveries. If a shipment of materials arrives when the warehouses are not ready to receive it, it creates a backlog of products and potentially leads to a flurry of confusion as people scramble to unload and stock all the shelves and bins. By instead requiring vendors to adhere to a delivery schedule, there are fewer surprises and less inconveniences for both sides.

Camcode, a bar code solution company, recommended using one of two scheduling methods, which can even be used concurrently. The first is to assign vendors a specific time or window for deliveries. The second is to schedule a predetermined recurring spot, whether it’s daily, weekly or monthly. Utilizing a fixed calendar for deliveries lets warehouse managers optimize their team’s labor and allows them to make the best use of the clock.

Scheduling vendor deliveries reduces surprises in an engineer-to-order warehouse.Scheduling vendor deliveries reduces surprises in an engineer-to-order warehouse.

4. Automate as much as possible

Manual techniques can slow down the picking and introduce human error into the process. Introducing automation can reduce the level of errors and boost efficiency in the warehouse. Whether it’s a simple conveyor belt or most advanced robotic automation, these methods can reduce extensive travel time within the warehouse.

5. Implement an ERP system

Questica ETO, an  enterprise resource planning system designed specifically for custom-design manufacturers, utilizes a separate engineering screen to manage entire projects and individual jobs by displaying a structured bill of materials hierarchy instead of a flat BOM. With this ability to visualize the BOM, engineer-to-order manufacturers have more flexibility in quickly finding the materials and modifying requirements for changes.

By providing real-time access to this structured BOM across the entire organization, it allows warehouse managers to more accurately plan orders and shipments, and ultimately create a more effective warehouse structure and system.

Take the first step!