5 Tips to Reduce Warehouse Costs

Let’s start with a scientific fact: Our universe is expanding. We assume you already know this. However, you may not realize that this expanding process is also affecting our daily lives. We are also expanding the way we live our lives by creating more and more data. This data requires tools and instruments as such to be handled. This is where the warehouses start playing their parts. They expand as our universe does and become much more complex to be operated. The smarter the warehouse structure is, the more expensive the business becomes. Therefore, you might need some help to reduce these costs. Below are some protips that will come handy in case you want to run your warehouse in optimum condition. Let’s get started.

1. Cutting Material Costs

A generic warehouse depends on materials. So the first thing you could do is to start by classifying your resources. You can change the design of the products so that you leave less and less waste behind. It would be wise to invest in sustainable solutions because studies show that in the long term, these solutions pay off. On the plus side, you help your planet!

2. Take proactive measures for maintenance

Warehouses are like a war tank! They take heavy damage. Yet, they remain operational. Nonetheless,the resilience of the warehouse usually mistakes the owners. They virtually spend none to take care of their buildings, which leads to more costly actions. So, take some steps before the storm unless you want to deal with production delays or loss of capacity. Remember that routine site inspection can save lives! “Consider yourself very lucky, if you are new to warehouse business. Because once you start the planning your warehouse keeping in mind the longevity of the warehouse structure, you will have a head start,” says the CEO of Makhina, Mehmet Ali Çalışkan and adds, “If you take regular maintenance measures, you will start reducing operating costs and minimize unwanted obstacles.” The design phase includes details such as the number of windows, aisle width and lighting conditions. Don’t let these details put you off.

3. Reduce space by optimizing storage.

There is always a better way to optimize the space and storage. If not done correctly, land cost can turn into a huge contributor to your budget. Your aim should always be to put more items in a smaller space without causing security problems. It’s good to start by aisles because machinery and workers will navigate on the aisles to reach their destination. You can gain a lot of speed if you can sort the aisles properly as the loading process will be much quicker. Also remember that not all forklifts are the same. They come with different dimensions for every type of product. Therefore, you need to make sure about your inventory. What kind of inventory are you running most of the time? Replace your forklifts if necessary and you will realize that you will have more space in the warehouse. Another very important strategy is to make use of racking. Racking is the best option to maximize your space. There are always new techniques to improve racking. So, never stick to old ways.

4. Reduce labor-related costs.

It is no secret that labor is an indispensable expense of any warehouse’s operating budget. No matter how much the automation plays a bigger role, the warehouse business relies mostly on human work.  As a result, bear in mind that time is money and when you talk about reducing labor-related costs, you should never focus on working with less workers. Instead, you don’t want any idle workers. Therefore let your experienced workers share their know-how with new ones. Organize cross training programs and seminars so that no workers remain idle. Thus, you will start improving productivity and even a safer work environment. 

5.  Make use of advanced technology

There are several ways in which to make technology work for you. If you are not already using a dedicated warehouse management system, you should urgently consider installing one. To begin with, using proper control systems will avoid major product misplacement. You will always find yourself looking for the missing inventory just like there is a small hole in the boat. Theft can occur both internally and externally. Warehouses are high-value targets for thieves simply because of the high value of product inventory. Consider using RF, RFID, or VDP if appropriate to fight against this. YPost guards at doors and designate one or two for employees and visitors entering and leaving the warehouse. If your warehouse does not run 24/7, use a rotational guard system during off hours.

Secondly, having critical information and specs at your fingertips saves time and makes it simple to find whatever is required. You can also implement a voice-directed picking system. Automatic lighting system is also another important tool to save money as it may be very difficult to adjust the lights depending on the size of the warehouse. Finally, with the advantage of technology,many tasks from production chain management can be automated. This will enable your warehouse to operate more effective and effient.If you are really into this, you can take advantage of the Enterprise Resource Planning (ERP) system.ERP manages many different kind of operational activities such as analyzing workflows, identifying obstacles, and automating all complex processes in manufacturing business.

Last but not least, every warehouse is different, and therefore will require unique approaches and mindsets. Therefore be ready to open to embrace new solutions to reduce the costs of your operation. 

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