The Art of Warehouse Optimization within Supply Chain

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The Art of Warehouse Optimization within Supply Chain

Warehouse Optimization within the Supply Chain

Warehousing has come a long way from being merely called as godown to become one of the most competitive edge in an organization. Ten years before, they were called as godowns and now warehousing is being discussed in board rooms.

“So, how this transformation has happened??”

The answer is pretty simple. It is because of the abundant value that an organization can bring in through warehouse optimization. Organizations came to know about the value additions that they can provide by optimizing their warehouses. Warehouse optimization is also called within the four walls optimization.


One metric that is very useful in space optimization is the cubic space utilization. There are other tier I and tier II metrics also. Cubic space utilization considers a warehouse a cube with three dimensions (length, breadth and height) and states the percentage of the warehouse that has been utilized in terms of space on the basis of the storage pattern and the products that you have. Another way of representing this is in terms of pallets per square meter.


Both flow optimization and resource optimization have a number of aspects in common. Flow optimization deals with how the products are coming inside that is inbound, the inventory and the outbound and how these activities are happening. Resource optimization basically deals with the people who are involved with such activities. Here we shall discuss on how these two aspects are optimized. One metric that will give a clear picture of the optimization is Lines per Manner.

For flow optimization we can use tools like congestion analysis, traffic analysis and others. I shall suggest that a spaghetti diagram can be used which tells exactly where some non-value-added activities are taking place in terms of unnecessary motion, crisscross movements and others. On doing a congestion traffic analysis one can find exactly the areas where there is risk. For example, on doing congestion traffic analysis if you find that there is a particular isle that is having the maximum activity of material handling equipment and also there is movement of people then that is definitely a red flag for you to look at it and avoid that risk before it causes some unwanted incident or an accident.

For resource optimization I shall suggest therblig study which is a form of motion study or gemba study and analysis that will help to understand exactly the set of activities that are happening within the four wall, identify the issues so that we can fix or mitigate them such that the metrics of lines per manner increases.

“So, I would like to consolidate the entire article. In warehouse optimization we have space optimization, flow optimization as well as resource optimization. If you do all these things you can expect excellent results from your warehouse. You will find these activities reflecting on your P&L pretty soon.”

Hesol Consulting: Logistics & Supply Chain
Hesol Consulting: Logistics & Supply Chain
Hesol Consulting is a Management Consulting Firm with a specialization at Supply Chain, Logistics and Warehousing. Hesol has completed 280+ Supply Chain Projects across 10+ Sectors at 14+ Countries. Visit for more information.

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