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10 Ways to Reduce Warehousing Costs

16/1/18

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Can you reduce warehousing costs as well as increase productivity and efficiency? We think you can.

If you’re looking to reduce warehousing costs as well as increasing productivity, then here’s what we think you should think about.

1. WMS

Obviously we’re going to advocate that if you want to reduce warehousing costs, then you should implement a Warehouse Management System (WMS) if you haven’t already.

When you invest in a WMS, you’ll find many benefits and features to help a growing business like yours .

2. The right staff

Having the right number of staff, as well as additional staff available for busy times is essential.

You’ll also need to make sure that you retain your staff, as turnover rates tend to be higher than in other areas of business, perhaps due to working hours or workload.

If you want to remove the hassle of recruiting and training new staff, you’ll need to keep your staff are happy, so they want to stay.

Making your warehouse staff feel empowered and valued, is likely to pay dividends.

3. Equipment

Make sure that your warehouse equipment is in good working order, and fit for purpose will help you to reduce warehousing costs

Perhaps that pallet truck with the wobbly wheel, or the forklift truck that keeps cutting out, need fixing or replacing.

This will mean more time spent getting products in and out, rather than trying to find equipment that works.

4. Technology

Are you making the most of technology to help reduce warehousing costs?

With technology moving at such as fast pace, is your warehouse keeping up to speed?

Can you:

  • Access your stock levels on your phone?
  • Be confident that you’re hitting 100% picking accuracy?
  • Login to your WMS software from wherever you are?

Does your WMS software:

  • Talk to your ecommerce platform, as well as your eBay and Amazon shop, and update each platform when an item has been sold?
  • Integrate with your couriers and automatically choose the best one based on parcel size, weight, cost and destination?
  • Keep the ingredients organised in your factory, so that food products are made using the oldest ingredients first?
  • Handle invoicing automatically
  • Create a Bill of Materials?

If not, then perhaps you could make more of technology to save time and money.

5. Communication

Remember that effective communication is a huge part of efficiency and cost savings.

Whether you’re introducing new WMS software  or want your Sales team to do something differently, you’ll want to communicate what you want them to do, and why, as well the benefits.

Simply enforcing a different process, or longer hours on your warehouse staff without explanation is not going to go down well.

6. Processes

You’ll want to make sure that your processes and procedures are as efficient and effective as possible, so that there is no wastage of time, money or other resources.

Perhaps analysing what needs to be done in order to get a product in or out of the warehouse is a good place to start.

You’ll soon identify things that can be done better, whilst saving money.

7. Measure and improve

In order to see how you are doing, you’ll want to measure everything, and see how you can improve it.

You’ll need to determine what you want to improve, and how you’re going to do it.

You’ll need to think about SMART goals, or other methods of measuring change,  so you have proper goals in mind, such as:

  • Reducing picking errors by 10% in a month
  • Sending out 10% more parcels per month by using different couriers
  • Reducing time wasted due to warehouse equipment issues by 50% in 6 months

These types of goals are much easier to understand and measure, than just simply saying you want to save money, or send more parcels than last year.

8. Identify issues

You’ll want to identify issues that cause problems in the warehouse, and get them resolved so that they don’t impact on time and money any further.

Things like:

  • That flickering light bulb that makes it hard to read labels on boxes and cases picking errors
  • The fact that the Night Team never leave barcode scanners for the Morning Team
  • The printer that won’t print labels properly, meaning wasted stickers and time to find another printer

By identifying and resolving issues straight away, you can stop small issues becoming big issues.

9. Constant improvement

Focusing on constant improvement will ensure that you’re always looking to make things better.

Maybe it is simple things like:

  • Replacing or repairing equipment that isn’t working properly
  • Having a quick morning meeting
  • Ensuring there are spare pens available

Maybe it’s the bigger things like

  • Investigating courier integration to get the ‘right courier’, every time
  • Changing your forklifts to more reliable ones
  • Seeing if better shelving could save time and money by making staff more productive

10. Learn from mistakes

You’ll want to learn from mistakes, so that you can make sure they don’t happen again.

You might discover that:

  • You actually can’t manage when 2 warehouse operatives are off at the same time
  • It wasn’t a good idea to replace your shelving system just before Christmas
  • You should have improved your WMS software a year ago, instead of deliberating about it
  • The quickest courier / supplier isn’t always the best
  • One forklift isn’t enough during your busy summer time

Whilst making mistakes isn’t normally a good thing, it can mean that you learn what needs to improve, when and why.

Perhaps you now know that the cheapest option isn’t the best when it comes to equipment, or that you need more than a few day to find and train new warehouse staff to make them effective at your busiest times.

Conclusion

Now you know some of things to think about in order to reduce warehousing costs, you can make a start.

Why not Contact Us today on +44 (0) 1270 500 777 and tell us what you need from your Optima WMS software? We’re looking forward to hearing from you.