How to improve warehouse efficiency and save money

The main costs of running a warehouse comprise of shipping, wages and inventory. During the coronavirus crisis, there is also the added cost of extra hygiene measures. However, savings can be made in many areas to reduce costs.

Shipping

There are many companies that ship parcels. Competition is fierce, which can be advantageous for the warehouse owner. As long as the business can guarantee a minimum number of weekly parcels, shipping companies are open to negotiating better terms for a new shipping contract.

Incentive bonuses

Paying workers incentive bonuses costs more initially, but structured in the right way, can increase productivity. Picking and packing targets can be introduced to make them faster, as long as this is not done at the expense of accuracy.

Inventory ordering

Stock control is essential to make sure that each item in the inventory is at the optimum stock level. There is no need to have large quantities of seldom ordered items, but there should be sufficient stock of high demand products. Rather than order large quantities of high stock items, order less, but more often, to improve cash flow.

Third-party logistics

It is not always the case that having your own fulfilment centre is the cheapest solution. A third-party logistics company may be more cost-effective due to the advanced automated systems they use to make order processing faster. The third-party option is not for everyone, but could benefit small companies and free them up to concentrate on marketing.

Kaizen

“Kaizen” is a Japanese word that means continuous improvement. It is a philosophy of business that emphasises continuous, but small improvements. It shows that large changes are not always needed. Many small changes that save money or increase productivity over time add up to significant savings. Encourage feedback from management and workers on their ideas on how to make small improvements.

Warehouse management systems

Another area where an initial investment will increase productivity and reduce costs is using warehouse management systems (WMS). The best of these handle the whole warehouse operation, from ordering inventory and picking and packing orders to monitoring delivery and customers. A quality system will plan picking routes and guide pickers to item locations.

WMS can also prevent costly errors and the number of out of stock items.

Buy the best equipment

It is false economy to purchase cheap equipment that is not designed to last. This strategy may save money in the short term, but the cost of regularly replacing worn equipment is more costly in the long term.

At Steely Products, we fabricate premium quality warehouse equipment. Our trolleys, tables, shelving and other handling and storing equipment are built to last. They are made from strong tubular steel, which is shaped and welded by our expert metalworkers. The design philosophy at Steely Products is to create equipment that works well and lasts a long time.

For more information on our extensive range of equipment, or to discover the benefits of bespoke designs, call a member of our team. You can also contact us via the form below.

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Posted by Katrina
11th November 2020
Retail & Warehousing

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