When was the last time you assessed the operating costs for your warehouse? Perhaps you negotiated something favorable with an individual service provider or supplier. And, rightfully so, felt good about that success. But, have you looked at the business’s entire operations for cost-savings? Let’s explore some approaches that can help uncover efficiencies.
Labor Is The Largest Part Of a Warehouse Operating Budget
No doubt, labor is your most considerable ongoing expense. The U.S. Bureau of Labor Statistics reports that the average warehouse worker receives $13.80 per hour. Regardless if your costs are above or below this figure, evaluate each position for untapped efficiencies. Sure, your team may always appear busy, but could they be doing more in the same amount of time?
- Inventory Location: Are your most frequently picked items located within easy reach of workers? Are things that regularly ship together stored in adjacent locations?
- Employee Turnover: Assess the costs involved every time an employee leaves. This includes hours for both new, less-skilled workers and trainers unable to perform at full speed. Determine if a change in the work process could result in improved employee satisfaction.
- Continuous Improvement: Regularly seek input from employees for process improvement suggestions. Have managers periodically shadow workers to assess workflow steps. Even if things are operating smoothly, don’t rest on your laurels. There is always room for improvement.
Technology And Equipment Use In Warehouse Operations
Assess the technology you use now and if it bypasses any steps in the current work process. Particularly, look for paper-oriented tasks that could be enhanced with a tablet or smart device.
At the same time, review your existing equipment for reliability issues. Can one malfunction grind your operations to a halt? Isolate problem gear for repair or replacement. At the same time, review the maintenance schedule for all your business’s equipment. Could new equipment reduce manual labor (and improve worker satisfaction)? Research this and consider renting equipment for occasional or seasonal use. These temporary tools may offer the best of both worlds: reduced labor and cost savings.
Solutions Partners Can Help With Warehouse Efficiency
Of course, negotiating the best price with a Solutions Partner is a standard duty. But this is only part of the equation. Consider what efficiencies a Solutions Partner can bring to your operations. This could be as simple as packaging merchandise in different containers that reduce labor on your end. Determine if a Solutions Partner’s delivery driver can help offload merchandise instead of relying on your team. Ask the Solutions Partner for suggestions, especially if that supplier is in a competitive situation for your business.
Optimize Space For An Improved Warehouse Budget
Identify space usage in your business. This starts small but ends with large. Can smaller shipping cartons be used, or are employees just grabbing the nearest box? Is it possible to reduce the number of pallets through smarter planning and preparation? For the largest shipments, is empty space inside the container eating away at potential cost savings?
Identify Warehouse Energy Use Savings
Energy use adds another high cost to warehouse operations. Unwelcome utility bills are particularly the case if your building endures seasonal temperature extremes. An energy audit can identify problem areas and provide recommendations such as greater use of LED lighting. Public utility companies frequently offer rebates to businesses that convert to more efficient lighting.