10 Tips to Improve Your Retail Stockroom
20th May 2015
As one of the UK’s leading suppliers of stockroom shelving, we’ve helped all sorts of businesses to get organised, maximise their storage space and improve the efficiency of their stockroom. From huge, multinational operations with complex seasonal stock changes, to smaller enterprises with a handful of consistently popular core products, we understand that every business has its own unique set of requirements.
Despite this, there are a few things, some simple and some more challenging, that can help almost any stockroom run a little smoother. Though not a comprehensive list, the following is a collection of actionable steps, particularly useful for small to medium sized businesses, that will help your stockroom function better:
1. Use the Right Storage Units
This might seem obvious, but today there’s a huge range of storage units available, and it’s worth investigating whether there’s a more appropriate, dedicated option for any of your goods. Modern shelving systems offer an array of specialised solutions that can help you maximise your storage space.
For example, if you stock a number of small items or components, consider whether bin shelving might help you to keep these organised, or even a more elaborate solution, such as this colour coded, high density rotatable storage cabinet.
The fashion industry is particularly well catered for, so if you’re still relying entirely on folded garment storage then there are a number of alternatives worth examining. Foremost among these of course are garment hanging bays. Hanging garments can be identified by sight and are easier to access, which helps your staff spend as little time as possible in the stockroom and more time on the shop floor. Many garments also look their best when hung on proper hangers, as folding clothes can cause excessive wrinkling and deformation.
If your stockroom always seems full beyond capacity, investigate the possibility of installing a mobile shelving system. Overfull stockrooms are usually disorderly and inefficient because there’s simply no room for staff to effectively organise goods. Though mobile shelving is more expensive, it can dramatically increase capacity, restoring order to your stockroom and improving the efficiency of stockroom tasks.
2. Make the Most of Vertical Space
Running out of space is the most common cause of a disorderly and inefficient stockroom, so it makes sense to maximise storage areas vertically as well as horizontally. Smaller businesses often miss this simple trick because they believe there’s adequate space for their current inventory; however, unexpected growth and market driven stock adjustments may fill your stockroom much sooner than planned.
The shelving here could be much taller
Ideally, buy the tallest shelving units possible for your stockroom the first time around. With so many other things to manage, stockroom improvements often fall low down the priorities list later on, leading to wasteful and even dangerous workarounds.
Even if smaller shelving is already installed, it can still make a lot of sense to replace it with taller shelving. Don’t wait until your stockroom is full beyond capacity, prepare your stockroom now so that it doesn’t become a hindrance to hard-earned growth in the future.
Remember, companies will spend a fortune on mobile shelving to squeeze every last bit of space out of storage areas, but simply ensuring your units are the right height can give you similar percentage gains at a fraction of the cost.
3. Discount or Discard Old Items
Increasing stockroom capacity need not rely on expensive new purchases – removing old or obsolete stock is also an effective way to maximise your space. Of course, it’s tempting to hold on to old inventory indefinitely – you’ve paid for it already after all – but it could be doing your business more harm than good.
Fundamentally, stock that will not sell is a cash investment that’s sitting idly on the shelf, and it’s worth considering whether this cash (and that shelf) might be put to better use. The right course of action will depend on the nature of your industry, the product and the general health of your business, but there is often a strong case for abandoning unpopular items and moving on.
The simplest way to get rid of stock is to discount it, but there are a number of other options if this is still not enough. The best, most creative alternatives leverage giveaways or charitable donations to increase engagement and improve brand perception.
Once old stock is out of the way, you’ll have more room for the products your customers truly love, and it’ll be much easier to keep storage areas organised and therefore productive.
Managing excess or obsolete inventory is a complex topic, far beyond the scope of this article, so please investigate the concept of inventory as a liability thoroughly before making any decisions.
4. Use Detailed Labels
The previous steps will give you more storage space to work with, but, however much space you have, it’s even more important to keep your stockroom organised. Labelling is the foundation of any well-run, orderly and efficient stockroom. Again, this might seem obvious, and it’s likely that you already have some sort of labelling system in place, but any system will benefit from an occasional review.
For instance, though you may have labelled sections, or even individual shelving bays, have you labelled each shelving level, or used arrows to clearly mark the precise location to which your signage refers? There are many ways to improve stockroom labels.
Often owners, managers and long-term staff will have familiarised themselves with a system that seems incomprehensible to new staff. Trainees can even be intimidated by the confidence of experienced stockroom navigators. Ensure that your staff are as comfortable making suggestions as possible. If your stockroom is performing noticeably badly, go further and ask your team, or even set up an anonymous suggestions box in the stockroom, where annoyances will be fresh in mind.
There is also a huge range of signage available, so if you still rely on handwritten signs, take a look at some of the other options, such as printed adhesive labels. Stockroom staff could be embarrassed to criticise poor handwriting, and with hundreds of labels available for under £10, it’s worth paying a little extra for the sake of clarity.
In addition, consider whether a few exotic labelling options could improve productivity. Among our favourites are magnetic strips, which can be cut to size and stuck on any metal surface, including shelving, to provide flexibility in changeable stockroom environments.
5. Add a Note Taking Area
Many stockroom tasks will be carried out in a hurry, often while customers are waiting on the shop floor, and there might not be time to communicate observations or issues. One modest but useful addition to any storage area is therefore a place where staff can quickly and easily make notes.
The simplest solution is to position a large notepad or whiteboard near the entrance of your stockroom and encourage your team to glance over it every so often. In this way, problems and concerns that might otherwise have been forgotten can be jotted down and immediately shared with everyone.
Combine this with a bulletin board, displaying store announcements, schedules, targets or motivational messages, and you can soon craft a positive social space that encourages unity and engagement within your business.
6. Install Employee Lockers
Over the past couple of decades much greater emphasis has been placed on transparency in businesses, demonstrated by marked increases in open office spaces and shared information. In general, this is seen as a positive trend that inspires free creative exchange and greater social cohesion, but the threat posed to employee privacy is a growing concern.
Crucially, it’s becoming increasingly clear that a sense of privacy can boost job performance. The difficulty is therefore to try and combine all the positive aspects of an open and transparent workplace, where employees feel like part of a more communal, innovative enterprise, without corroding a sense of privacy, which can damage productivity, creative thinking and job satisfaction.
A complete resolution of this conflict might be unrealistic, but it’s well worth taking action to give employees a sense of privacy wherever feasible. Stockroom lockers are an incredibly simple way to demonstrate an awareness of this issue, offering your staff their own private space away from the bustle of public areas.
Of course, lockers also provide a practical and secure way to store valuables and other personal belongings while at work, reducing the likelihood of lost or stolen items, so the benefits are twofold! Have a look at our huge range of durable and attractive lockers to get some idea of what’s available.
7. Control the Temperature
A stockroom can be a very unpleasant place to work if there are no temperature controls in place, especially in older buildings where storage areas are located in windowless basements or backrooms. Health and safety regulations do place a legal obligation on employers to maintain a ‘reasonable’ temperature in the workplace, including an absolute minimum temperature of 13°C. However, research suggests that even small changes can have significant negative effects on human performance, with higher temperatures damaging productivity by almost 10%, so it’s worth taking further action to keep your stockroom comfortable.
On top of boosting productivity, a controlled stockroom temperature can increase the longevity of your stored goods. This applies to much more than meat and dairy products: unrefrigerated foods, chemicals and even clothing will all benefit from temperature control. The storage life of most foods is cut in half by every increase of 10°C, while extreme or fluctuating temperatures cause damage and deterioration to many textile fibres.
Temperature control need not necessarily rely on an expensive air conditioning system; purchasing a fan or just ensuring that any windows can be opened easily could help to improve your stockroom environment. Try monitoring the temperature to see if your stockroom is experiencing extreme or fluctuating conditions that could be damaging goods and irritating staff.
8. Cycle Count Your Inventory
Many smaller retailers check the accuracy of inventory records with a full physical inventory each year, typically requiring a complete shutdown of operations and, in some cases, temporary or overtime staff to complete the count within a given time frame. Overall, it’s a costly and time-consuming exercise, and a sense of urgency often means that discrepancies in the records remain unresolved year on year.
Cycle counting is a powerful alternative with a number of significant advantages. Instead of counting your entire inventory once a year, the process involves regularly counting different portions of your inventory, on a daily or weekly basis, so that every item is counted several times a year.
Adopting cycle counting eliminates the need for full-scale inventory audits, reducing costs significantly. Frequent counts also improve the accuracy of inventory records, often to levels of 97% and above. Armed with accurate information, staff can quickly and confidently determine the availability of products, resulting in fewer embarrassing errors, timely reordering and a more streamlined customer experience.
A further benefit is that cycle counting requires a well organised stockroom. The most effective cycle counting techniques utilise a variant of ABC analysis, which divides your stock according to its value – based on cost, sales volume, margins or some other metric. Once your stock is divided in this way, goods can be organised according to their importance; for instance, items with the highest turnover could be placed in an easily accessible location.
Once again, cycle counting is a complex topic, and its utility to your business will depend on a number of factors. For more information, please take a look at this guide.
9. Find the Best Stockroom KPIs for Your Business
Performance indicators are a critical part of developing strategies in almost every area of business. The right KPIs help to clarify the focus and objectives of a business, enabling performance to be measured, monitored and managed according to these principles.
Unsurprisingly then, in our experience, getting the most out of your stockroom depends on finding and examining the right metrics. Fundamentally, in order to judge success, or to identify the adjustments needed to achieve it, you must be well acquainted with how your stockroom is performing.
Which metrics to monitor will of course vary, but, if you’re not so familiar with KPIs, days of supply, inventory turnover, stock to sales ratio, sell through percentage and gross margin return on investment are a great place to start. If you already track these, there are a huge variety of other KPIs that are particularly useful to retailers. In addition, some qualitative measures, such as stockroom staff satisfaction, can supply invaluable insights beyond the reach of quantitative methods.
An enhanced understanding of your inventory metrics – especially alongside the accuracy provided by cycle counts – should greatly improve your stockroom by allowing for more effective inventory management, meaning stockrooms won’t be oversupplied, staff will spend less time looking for goods and overall supply chain practices will be leaner and less wasteful.
10. Beautify Your Stockroom
Storage areas are too often left feeling unfinished and unwelcoming. Our last tip is to do what you can to reverse this trend and create a space that raises the spirits. Studies consistently show that happiness boosts productivity, sometimes by as much as 12%, so anything that helps bring a smile to the face is a worthy investment.
One simple change is to add a splash of colour. A University of Texas paper revealed that grey, beige and white space can induce feelings of sadness and depression, while other colours have been shown to affect mood more positively. Another great option is to add some plantlife to your stockroom – a recent study demonstrated that a few plants could increase productivity by an incredible 15%.
These are two inexpensive and research backed methods to spruce up your stockroom; but, whatever approach you take, the most important thing is to shift perceptions of the stockroom from an uninspiring backroom to an appealing and vital space that’s pleasant to spend time in. If you can achieve this, your stockroom will cease to be a drain on motivation and start adding real value to your business.