In retail, every little edge counts. The biggest companies all have their warehouses and distribution centers (and their supply chains too) monitored and optimized for greatest efficiency. That’s how they keep their market-leading positions.

What are some things you can do to optimize the efficiency and reduce the costs, at your warehouse or distribution center? Here are a few:

1. Make Sure You Have a Vendor Compliance Program in Place

How should your vendors work with you to give you the best service and most efficient shipping? Create a compliance program that sets standards every vendor should follow.

Labeling, standard quantities, product identification, how trucks are stocked, and tracking should all be a part of these. The most effective vendor compliance programs avoid punishing vendors for non-compliance where possible. Instead, to get the greatest cooperation from your vendor, incent vendors with rewards for remaining in compliance.

2. Eliminate All Unnecessary Steps in Your Processes

Where possible, have your employees pick directly to a shipping carton instead of a bin they use to move product to where it needs to be shipped. Not a huge thing, but it all adds up when you focus on the small things. In our experience, most warehouses have at least a handful of unnecessary steps in place, so it’s worth your time analyzing every step in your processes to see what you need, and what you don’t.

This could also include analyzing the layout and storage of product in your warehouse. You may want to optimize it to minimize wasted employee movement, for example.

3. If You Have A Big Warehouse or Distribution Center, Consider Cross-Docking

With cross-docking, you completely bypass unloading, storage, and then reloading the product. You simply take the product from your existing transportation container and move it onto the next one.

It’s hard to set up at first. But once you have it in place, you get significant cost and time savings.

4. Optimize Your Usage of Vertical Storage Space

Taller containers can make a big difference in how much product you can store in your warehouse or distribution center. Combine bins with shelving to optimize your storage space closer to the floor. When you optimize all your storage, you can keep more in the same amount of space, without having to consider an expensive expansion.

5. Streamline Picking

Ideally, you’ll use warehouse management software to do this. You’ll have to look at how you use materials in your warehouse.

A couple of examples for optimizing your picking operations include storing frequently sold items near the front of your warehouse and storing items sold together next to one another. This minimizes picking delays and wasted movement. Using these examples, you’ll likely have a good idea of where you can make efficiency gains.

If you follow these five best practices, you’ll find yourself with more efficient operations and lower costs than ever before.