How to Improve Warehouse Efficiency: 3 Proven Strategies for Faster, More Accurate Operations
Guest blog by MHI member Jungheinrich
Warehouse efficiency is the ability to receive, store, pick and ship products using the least time, labor and cost, while keeping accuracy high. It is getting harder to achieve. Product assortments keep growing, delivery windows keep shrinking and experienced labor is harder to find.
In the 2026 MHI Annual Industry Report, produced with Deloitte, supply chain leaders ranked “workforce, talent shortage and changing worker skillsets” as the second-biggest trend affecting their operations. Only economic uncertainty, inflation and geopolitical risk ranked higher. The same survey found that 56% of organizations expect to increase spending on supply chain innovation, and 52% expect to spend more than $1 million.
Most efficiency gains don’t require a bigger building or a bigger crew. They come from three places: how far people and trucks travel, whether the equipment fits the task, and how much guidance technology gives the operator.
Where Warehouse Time Actually Goes
Order picking is the most labor-intensive activity in most warehouses. A widely cited review in the European Journal of Operational Research estimates it can account for as much as 55% of total warehouse operating expense. The largest share of a picker’s day isn’t spent picking:
Source: de Koster, Le-Duc and Roodbergen (2007), citing Tompkins et al. Travel and search together take about 70% of the day. That’s why the strategies below start there: a few seconds saved per trip adds up across thousands of picks a day.
1. Cut Travel With Smarter Layout and Slotting
Layout decisions affect travel time, congestion, storage capacity and safety. A useful first exercise is to trace how product moves from receiving to storage to picking to shipping. Wherever the path doubles back or crosses itself, you are paying for extra travel.
Common improvements include:
• ABC classification. Identify the small group of SKUs that generates most of your picks. Place them closest to packing and shipping, at waist-to-shoulder height.
• Scheduled re-slotting. Review slotting quarterly and before seasonal peaks, not only when space runs out. New SKUs tend to go wherever there is room, and that’s how travel paths creep longer.
• WMS-directed putaway. Let the warehouse management system assign locations based on velocity and size, not operator habit.
• Batch and zone picking. Pick several orders in one trip, or assign pickers to zones, so fewer trips cover the same work.
• Denser storage where it shortens travel. Narrower aisles and taller racking bring more locations within reach, as long as the equipment is built to work in them.
2. Match the Equipment to the Task
The wrong truck for a task adds travel, handling and wait time. A counterbalance forklift doing case picking, or a reach truck shuttling pallets across a long dock, costs time on every trip. Most modern warehouses run a mix of equipment:
Equipment choice also affects downtime. Lithium-ion batteries can be opportunity-charged during breaks and shift changes. This can eliminate mid-shift battery swaps, along with the space and labor a battery room needs. Whether that pays off depends on your shift pattern, charging infrastructure and utilization.
3. Add Semi-Automation Before Full Automation
Technology helps most when it attacks the travel and search time shown above. Many facilities start with targeted tools and expand from there:
• Picking technology: RF scanning, voice-directed picking and pick-to-light systems cut search time and errors by telling the picker exactly where to go and what to pick.
• Semi-automated trucks: some very narrow aisle and order-picker trucks read RFID tags in the floor to know their exact position. The system directs the truck to the correct rack location and combines driving and lifting in the most efficient path. The operator stays in control.
• Full automation: automated guided vehicles (AGVs), autonomous mobile robots (AMRs) and automated storage and retrieval systems (AS/RS) take over repetitive transport and storage tasks.
• Data: labor management software and performance dashboards show where time is being lost.
Interest in automation is high but measured. In the 2026 MHI Annual Industry Report, 73% of respondents expect to adopt robotics and automation within five years, and 39% say its impact on supply chains is already significant or greater. That’s up 16 percentage points from the previous year.
Semi-automation is often the practical first step. It costs less than a fully automated system, works alongside existing people and processes, and keeps operators in control. It also builds the data and discipline an operation needs if it later moves to full automation.
How to Measure Warehouse Efficiency
You can’t improve what you don’t measure. Set a baseline before making changes, then track the same metrics afterward.
Where to Start
1. Set your baseline. Capture the metrics above for a typical week.
2. Study the travel. Follow a few pickers and drivers for a shift and see how much of their time is travel and search.
3. Re-slot your fastest movers. It is usually the quickest, lowest-cost win.
4. Audit equipment against tasks. Look for trucks doing jobs they weren’t designed for.
5. Pilot one technology in one zone. Measure the result before scaling.
Efficiency gains rarely come from a single project. The operations that improve most treat it as continuous improvement: measure, change one thing, measure again.
Frequently Asked Questions
What is warehouse efficiency?
Warehouse efficiency measures how well a facility receives, stores, picks and ships inventory while minimizing labor, time, space and operating cost, without sacrificing accuracy.
What is the biggest source of wasted time in a warehouse?
In most picking operations it is travel. Research summarized by de Koster et al. (2007) puts travel at roughly half of an order picker’s time, and searching at another fifth.
What causes poor warehouse efficiency?
Common causes include layouts that force backtracking, poor slotting, congested aisles, inaccurate inventory records, equipment mismatched to tasks, and manual processes that invite errors.
What role does a warehouse management system (WMS) play?
A WMS directs putaway and picking, keeps inventory locations accurate and shows where work is backing up. All three cut travel and search time.
Does automation improve warehouse productivity?
It can, by reducing travel, errors and repetitive manual work. Many operations start with semi-automation, such as guided picking or RFID-guided trucks, before investing in fully automated systems.
What equipment is best for order picking?
It depends on pick height, order profile and aisle width. Low-level order pickers suit floor-level case picking, high-level order pickers suit picking at height, and turret trucks suit very narrow aisle, high-density storage.
Sources
- MHI and Deloitte, “2026 MHI Annual Industry Report: Rewiring the Future: A Supply Chain Playbook for Innovation,” mhi.org/annual-industry-reports
- de Koster, R., Le-Duc, T., and Roodbergen, K. J. (2007). “Design and control of warehouse order picking: A literature review.” European Journal of Operational Research, 182(2), 481–501. doi:10.1016/j.ejor.2006.07.009
- Logisnext Americas, Jungheinrich Warehouse Navigation (manufacturer claim).
