Warehouse 5S Explained: Principles, Benefits, and Strategies to Implement 

A typical day at an ecommerce warehouse is fast-paced, and things can get extremely busy, if not chaotic. Having an organized warehouse makes a world of difference in ensuring that your everyday warehouse operations run seamlessly with minimal disruptions even amid the flurry of activity. 

The question is: how will you organize it? Often, brands know they need to keep their warehouse well-arranged, clean, and tidy, but don’t know where to start.  

This is why many ecommerce businesses rely on effective warehouse management models such as the 5S model. In this article, we’ll dive deeper into the 5S warehouse management method and explore how it can benefit your operations.  

What is 5S in warehouse management? 

Overview of the 5S principles 

The 5S methodology is based on the Japanese lean philosophy and focuses on organizing workspaces and standardizing warehouse processes to improve efficiency. The 5 different words beginning with “S” represent the five principles used for achieving this goal. 

1. Sort 

The first stage of the 5S model involves getting rid of unnecessary clutter and keeping only what is necessary. This sorting process is vital for eliminating obstacles and distractions to reduce warehouse congestion and maximize usable space. It also helps to remove potential hazards, create clear pathways, and reduce unnecessary stock buildups. 

A thorough warehouse audit process can help you identify unnecessary items in your work areas. This could include empty boxes, broken tools, obsolete products, and more. 

2. Set in order  

The “set in order” stage involves putting “everything in its place.” Specifically, it focuses on improving warehouse organization to reduce the time needed to search for things and subsequently minimize confusion and boost efficiency.  

In this second stage, you must create dedicated spaces to store specific types of inventory and clearly label inventory storage areas for easy identification. As you revise your storage system, you should also reexamine your warehouse setup, layout, and capacity, streamlining where possible to create a more seamless process flow. 

3. Shine 

The “shine” stage focuses on keeping your warehouse clean and tidy to create a safe and welcoming work environment for all your employees.  

It requires a thorough clean-up of the entire facility, including all your shelves, racks, and equipment. This principle also prioritizes cleaning up leaks and spills immediately, as they can turn into potential safety hazards.  

Not only does the shine stage facilitate scrupulous warehouse safety, but it also ensures that you are cleaning up equipment and tools regularly, which can prevent future downtime resulting from equipment failure. 

4. Standardize 

The “standardize” stage is all about creating consistency across your warehouse processes. It involves establishing standards for people and processes to follow in how different warehousing tasks are carried out. These standards will help workers understand what needs to be done, how it should be done, and when they need to do it. 

With proper procedures and expectations in place for how your warehouse should operate, you can streamline warehousing workflows. This helps improve the efficiency and accuracy of your warehouse management processes. 

5. Sustain  

The final stage is about sustaining all the standards and processes established in the last four stages in the long term.  

This is one of the most challenging steps as it’s easy for warehouse operations to fall back into old habits. It requires constant warehouse monitoring to ensure that the standards are maintained. You also need to make continuous improvements to ensure greater supply chain efficiency. 

The benefits of 5S for warehouse management 

The 5S method is built on lean warehousing principles, and as a result, it offers ecommerce brands a number of benefits. Here are some of the main ways in which your business can benefit from implementing 5S in your warehouse management. 

Efficiency gains and cost savings 

The 5S approach focuses on minimizing unnecessary movements while making essential materials and tools easily accessible for your staff. This allows warehouse workers to do their jobs more efficiently as they no longer have to waste time searching for things or navigating between cluttered spaces. By reducing down time, you can ensure a more efficient warehouse workflow, which contributes to a seamless inventory flow. 

Moreover, you’re cutting down on unnecessary materials and excess inventory. This allows you to maximize warehouse space and make the most of available storage space, so you can effectively reduce holding costs. This leads to lower warehouse costs as a whole and increased profitability. 

Enhanced safety and employee morale 

A clean and organized workspace enhances warehouse safety. By routinely removing clutter and cleaning up spills, you minimize the risk of trips and falls. Similarly, by ensuring that warehouse shelves are neatly organized, you can reduce the risk of accidents and injuries caused by falling items. 

Another major perk of having a safe and clean work environment is that it shows you care about your employees and their safety. This helps to boost employee morale and communicates that you care about them and the quality of their work. 

Long-term scalability benefits 

Cost reduction and efficiency improvements are vital for businesses to grow. Since the 5S process relies on lean principles, it allows you to effectively cut costs and production lead times. This enhanced productivity and efficiency play a crucial role in supporting long-term scalability. 

How to implement 5S in your warehouse 

While the 5S model can be applied to various types of operations, let’s break down how to implement 5S in your ecommerce warehousing operations. 

Step-by-step guide to 5S implementation 

Step 1: Sort 

Start by auditing your warehouse space for any unnecessary items, removing things like broken equipment, excess stock, scrap, and obsolete products to free up space. 

A green tag/red tag event is often needed to complete the sorting process. Assign a dedicated team to go through an area and apply green stickers to items that you regularly use and red stickers to items that you don’t use frequently or at all. Once finished, remove all the items with red tags from the area and relocate or dispose of them as needed. 

Additionally, make sure to clear paths so workers can move seamlessly across different warehouse processes. Create a designated space with floor marking tape so none of the auditing movements disrupt the flow of warehouse traffic. 

Step 2: Set in order 

To set your warehouse in order, start by reviewing your existing warehouse layout to look for any opportunities to improve workflow. Then create designated areas for different functions that will also store the materials needed for each warehouse process. 

In arranging your warehouse, make sure to: 

• Use floor and aisle markers to direct foot traffic and minimize confusion. 

• Invest in advanced storage solutions to allow for easy identification and retrieval. 

• Employ labels and tags to help workers identify the content of each storage space. 

• Use color coding to categorize different types of inventory so your staff can recognize items that need special handling. 

• Store heavier items closer to the floor, and your most popular products in easily accessible locations.  

Step 3: Shine 

Next, it’s time for a deep clean of your entire facility to create a neat and tidy working environment. Besides removing debris from the floors, wipe down and check shelves, racks, and machinery. Ensure that your staff cleans up leaks and spills immediately to prevent slips and falls. 

Step 4: Standardize 

Once your warehouse is clean, establish a set of procedures and schedules to standardize your warehouse activity. Make sure these standards are easily accessible so your entire staff can follow them. Use visual guides like posters and charts to summarize workflow and warehouse plans. Invest in refresher training sessions to encourage staff to adhere to your standards. 

Step 5: Sustain 

In order to maintain the standards you’ve set, closely monitor your warehouse operations over time to ensure workers are following them. Schedule regular audits and evaluations of different warehousing processes to identify issues, inefficiencies, and setbacks. 

Common challenges and how to overcome them 

Implementing the 5S model in your warehouse could come with some challenges, including: 

• Heavy time investment: Reshaping your warehouse flow, organizing everything, and deep cleaning your facilities can take some time. Make sure you schedule implementation at a time that is convenient for your brand and that doesn’t conflict with any peak periods to minimize downtime.  

• Resistance from employees: You may face some resistance from employees, especially if they’re used to doing things a certain way. Make sure to educate them on the organizational and individual benefits of 5S implementation to encourage employee buy-in. 

• Inconsistent adherence: Lack of training and failure to track implementation may create inconsistencies in how 5S is applied across your organization. It’s important to invest in worker training to ensure that everyone has the knowledge and skills to maintain 5S standards, and closely monitor adherence going forward.  

5S warehouse checklist and examples 

To help guide you through the 5S process, here are some resources to use in implementing it in your own warehousing operations.  

Comprehensive 5S checklist for warehouses 

Answer the following questions to audit your warehouse for 5S implementation. 

Sort 

• Do you have unused equipment/tools lying around? 
• Do you see trash or debris in common areas? 
• Is waste being discarded in the right place? 
• Are you keeping old/obsolete inventory in storage areas? 
• Do you see any other tripping hazards or obstructions in the area? 
• What equipment, tools, workstations, inventory, or other resources have been unused for a year or more? 
• Can workers move safely and efficiently throughout warehouse walkways and aisles? 

Set in order 

• Does each SKU have a dedicated storage area in your warehouse? Is all your inventory stored in its proper location (i.e., no loose units)? 
• Do you have labels to identify shelves and other storage areas? 
• Are designated places for tools and equipment storage clearly marked? 
• Do you have designated spaces for different warehouse functions and workstations? 
• Are you stacking the correct number of boxes on each shelf, without exceeding the weight limit? 
• Are you parking forklifts and vehicles in designated areas? 

Shine

• Are all your work surfaces clean and tidy? 
• Are floors free from dust, clutter, and liquids? 
• Are your machines and forklifts clean and in good repair? 
• Are floors and shelves free of empty pallets and trash? 
• Do you have a team that is responsible for assigning and completing cleaning duties? 

Standardize

• Have you established and documented operational standards for all major warehousing functions (e.g., receiving, stowing, picking, packing, labeling, returns)? 
• Have you trained staff on these SOPs? 
• Are equipment and tools labeled and stored in designated spaces? 
• Are boxes and items properly labeled and stored in designated areas? 
• Do you have floor markings and visual safety signs to guide workers? 

Sustain

• Is everyone adhering to established timelines and schedules? Do you have a means of measuring warehouse productivity, efficiency, and adherance to SOPs going forward? 
• Are you scheduling routine evaluations and audits to assess implementation? 
• Do you have a cleaning routine in place? 
• Is everyone using and wearing protective equipment? 
• Are you taking and documenting safety checks? 

Real-world 5S warehouse examples 

Lots of brands have successfully implemented the 5S model’s principles in their warehouses to improve operational efficiency. Spikeball, for example, revised their warehouse setup and inventory storage for efficiency to set their warehouse in order as they adopted ShipBob’s warehouse management system (WMS) to power their warehouse. After years of storing similar-looking items in the same area (which led to lots of picking errors), they switched to storing these SKUs in different places in the warehouse, and their pick accuracy went up.  

“Prior to ShipBob, we had our most popular products at the front. Through the implementation process we learned that if you’re commonly picking certain items, they should be stored in the back so you aren’t carrying them around while you’re picking other items. Our best sellers are at the end of the pick path now, so once we’ve picked those, we’re already back at the pack stations.

We even changed the way we stowed products. For example, we would have similar items in the same area — take shirts, for instance. Because they were so close together, there was a high likelihood that we picked the wrong size or the wrong color because all of our shirts looked similar and were physically right beside each other. Once we set up ShipBob’s system, we were putting those similar items (that weren’t ordered together) in all different places in the warehouse. After that, our pick accuracy went way up. Getting out of our own way of thinking was eye-opening.”

Adam LaGesse, Global Warehousing Director at Spikeball 

Similarly, Elwood Clothing previously had no real method or any sort of organized way to pick orders. But after adopting ShipBob’s WMS, they instituted multiple standardized, flexible picking options that direct and optimize picking flows, which enabled them to boost fulfillment efficiency and make operations much more seamless. 

“ShipBob’s WMS has completely transformed our operations. It makes the receiving process very easy and straightforward, and the stowing tag system that’s built into the WMS has been so helpful. We also have a dedicated location for every SKU and corresponding barcodes that pickers scan to update inventory counts in the ShipBob dashboard in real time, which we never had when we were managing inventory through Shopify. Everything is so seamless now, even with thousands of SKUs in our portfolio.”

Tim Poyer, VP of Operations and Logistics at Elwood Clothing 

Simplify, organize, and grow with ShipBob 

Running your own warehouse – especially when you abide by the 5S model – can be challenging, expensive, and time-consuming. That’s why many brands turn to an expert partner like ShipBob to take some (or all) of that burden off their hands. 

Whether you’re looking to outsource warehousing completely or optimize your own in-house operations, ShipBob’s solution are designed to optimize your ecommerce logistics for cost and efficiency, freeing up time and space for you to focus on running your business.  

Here are just some of the ways that ShipBob’s world-leading fulfillment solutions and powerful warehouse management tools can help streamline your brand’s warehousing processes. 

Optimize inventory for faster fulfillment 

ShipBob’s powerful WMS and merchant dashboard feature built-in inventory management software (IMS) to help you centralize and manage inventory data across multiple channels, making it easier than ever to sort your inventory and set your warehouse in order.  

In any warehouse that runs on ShipBob’s WMS (whether it’s one of ShipBob’s dozens of warehouses globally or your own), strict barcode scanning protocols and multiple checks and balances from receiving to shipping enable brands to track inventory on the SKU level as it moves through your supply chain. You can also view real-time inventory counts through your ShipBob dashboard, and achieve full visibility into your inventory planning, KPIs, warehouse operations.  

Additionally, ShipBob’s Inventory Placement Program allows you to strategically distribute inventory between different fulfillment centers. That way, you can reduce overstocking and maximize storage space in certain warehouses while ensuring that you have sufficient stock in high-demand locations. This also allows you to ship out orders from the most convenient locations to ensure faster transit times. 

Streamline processes with technology-driven insights 

ShipBob’s powerful analytics dashboard gives you real-time insights into your warehousing processes, enabling you to standardize processes and sustain your progress. Specifically, your ShipBob dashboard automatically tracks and reports on important KPIs, such as: 

• Average transit time  
• Average fulfillment cost  
• SKU velocity 
• Top countries, states/provinces, and zones you ship to 
• Estimated days on hand 
• Top 5 and bottom 5 SKUs 

By closely monitoring these key warehousing metrics and more, you can easily identify bottlenecks and inefficiencies to maintain operational excellence. 

Reduce costs and increase efficiency 

ShipBob’s fulfillment solutions and expertise empower businesses to increase operational efficiency while reducing costs. In the Spikeball example highlighted above, ShipBob’s recommended improvements for product stowing stowed drastically improved their picking efficiency as well as accuracy, reducing costly mistakes.  

The brand also leveraged ShipBob’s WMS to automatically select the best delivery method for each order. In addition to faster shipping, this has resulted in better cost savings, allowing them to cut total fulfillment costs by 40%. 

For brands storing diverse SKUs like Bunker Branding, maintaining accuracy and efficiency is crucial. With 190,000 SKUs stored in their warehouses, the ShipBob WMS makes it easy for their staff to run multiple checks and balances to reduce human error. Now they’re operating at an error rate lower than 1%, shipping out over 10,000 orders each month. 

“I think we went through 5 warehouse management systems before we found ShipBob. When one system didn’t work out, we always went back to doing fulfillment the old school way: printing orders out on paper and picking them from that list. It was super archaic, very slow, and it got messy. It made our warehouse manager’s and fulfillment manager’s jobs so much harder. They were combing through old orders to see where things got missed. It was a huge pain for us.  

We’d gotten jaded that a WMS would just bog us down. By the time we were about to adopt ShipBob’s WMS, we were stuck in our ways and we weren’t sure how switching warehouse management systems again would go. But it turns out ShipBob’s system is set up perfectly for what we need.”

Clint Sanders, VP of Operations of Bunker Branding   

Enhance customer satisfaction with faster shipping 

With an organized and efficient warehouse powered by ShipBob’s solutions, businesses can significantly enhance fulfillment efficiency. This empowers you to get orders out the door faster, ensuring quicker deliveries and a better customer experience. When you’re consistently meeting customer expectations, you can ultimately drive repeat purchases and brand loyalty. 

“ShipBob ships our orders out super fast – faster than we had been shipping our own orders. Our stated lead time for our business had always been between 3-7 business days, and with ShipBob, most of our orders are shipped the same day or within 24 hours. It’s cut our lead times by two-thirds at least. Cutting shipping times has helped us create a great experience for our customers, too.”

Charlotte Katona, President of Makesy 

For more information on how ShipBob can help your brand optimize its warehousing strategy, click the button below to get in touch.  

Warehouse 5s FAQs 

Below are answers to the most commonly asked questions about the Warehouse 5S methodology.