Warehousing is something that many businesses cannot possibly do without, but the problem with it is that it is all cost. Everything that is done in a warehouse affects your bottom line, so the lower you can keep your warehouse costs the more profit you will make. At the same time, trying to save money by cutting corners is most definitely not advisable. There are several areas that you can look at in order to keep your warehouse costs to the minimum.
There are three main things to consider and these are the equipment that you have, your staff, and the space in which they operate.
Taking equipment first, you need to ensure that you have the most effective number and type of machines. One way is to get information on how each item is being used, for how long, and when, and then you can ascertain the overall effectiveness of your machines. If the company that supplies your materials handling equipment has one available, an online tracking system will enable you to see how each machine is being used, and if some have high or low usage, and this may enable you to rotate the fleet to suit.
It may well be that your business has seasonal variations which could result in some machines being idle or less used at certain times of the year. Rather than having machines lying idle, it might be a good idea to remove certain machines and replace them with short term hire when the demand is there.
Breakdowns And Accidents
Another consideration is taking a look at the number of breakdowns or accidents that are occurring. If you find that the same type of breakdown is occurring often, it will enable you to take the appropriate action to reduce the number of problems caused by this. For instance, you might conclude that damage to a machine is caused at a particular place in the warehouse, which could mean redesigning that particular area in order to reduce the frequency of accidents, saving money over the long term.
It may be a good idea to take a long hard look at your staff. Perhaps a certain machine is lying idle not because there is nothing for it to do, but because it is waiting for a trained driver to operate it. In this case, it would be a good idea to train other staff members in its’ use in order that they can be assigned to it when needed, thus keeping the work flowing.
Notices and Signage
Accidental damage to machines does happen, but a very simple and cost-effective way of getting the message of the costs of repair across to your staff is simply to have notices around the site telling them. It is very likely that your drivers have no idea of the actual cost of replacement parts, the labour involved, or the cost of downtime, so having posters explaining this will encourage them to be more careful. Another idea might be to hold a driver awareness day with tests and challenges for drivers to prove their handling skills. This is not only good fun and helps staff to bond, but can also raise their awareness of the true cost of damage to the machines.
Another important factor is the amount of space that you have and whether you are still making the most efficient use of it. For instance, it may well be that an item that has suddenly started to sell very well is actually stocked a long way from the loading bay so it takes longer to get on to your delivery truck. Re-assessing the location of stock is something that should be done on an ongoing basis in order to keep your use of space as effective as possible.
By optmising your warehouse space and your storage procedures you can store a lot more in less space. Work out what dimensions of the various forklifts are needed for every type of product. By sorting your inventory by aisle dimension, you can reduce the width of inefficient aisles wherever possible.
Using Cross Docking
Cross docking can potentially save businesses a considerable amount of time and money on product management and storage, delivery and shipping, product transference, and labor costs. It makes operations within warehouse facilities far more efficient. Cross docking is a procedure within the supply chain that moves products directly to a customer from the supplier or manufacturer without additional handling or storage time. This occurs within a specific docking terminal where trucks are loaded and unloaded and supported with a small amount of storage space.
Technology can be used in numerous ways, but many business are still using manual inventory methods. A dedicated Warehouse Management System (WMS) will give you critical information at your fingertip. Having critical information and specs at hand saves time and makes it simple to find items. Integrating efficient inventory management with the help of a WMS can mean less manual errors and better transparency regarding stock levels.
Companies need to start embracing new technology and selecting the right WMS for your business to keep up with competition. With the right WMS you can identify areas of high performance as well as the comparable inefficiencies.
Reduce Electricity Consumption
Long-term energy savings can be met when looking at the lighting and heating of a warehouse. Obviously turning off lighting and equipment when not in use is the first strategy to look at. You can get occupancy sensors and timers which can help in ensuring lights and equipment aren’t left on when out of use. The use of LED lighting offers more value for money, the bulbs last much longer and are much more efficient.
Reducing heating costs in warehouses in a bid to lower energy consumption should be a top business priority. Regular maintenance of heating and ventilation systems is important. Checking for any major source of energy loss through gaps around doors and seals periodically is also important. The right door can help immensely, there are high-speed doors, revolving doors, doors with a hydraulic hinge to automatically close.
Ask the Experts
If you would like help with lowing your warehouse costs why not give us a call. 2h Storage Solutions work with companies who are experiencing storage problems or who want to automate their processes. All of our solutions are designed to increase productivity, optimise storage space and improve the efficiency of our customers working practices. We take the time to listen, understand your requirements and objectives and provide you with the best possible solution from our range of world class products.