To understand just how important this concept is, you need to remember that Amazon.com bought Kiva Systems for $755 million in order to start with an increased robotization of their warehouses. Sure, you may not be able to afford robotization but there are so many things that you can start improving right away. Here are some of them.
Better Planning
The first thing you need to do in order to cut warehouse costs is to start managing your warehouse somewhat better by planning things out. For instance, the position of items in your warehouse may determine the efficiency of your use of the space in question.
For instance, items that are in the greatest demand need to be in the most accessible locations, while others can be placed in an alternative locations. The very last thing you need to take into consideration is the fact that your planning may be determined by the layout of the warehouse, as well as by the shelving that you have in your inventory.
Adequate Warehouse Management System
There is probably no simpler and more direct method of improving the cost-efficiency of your organization than investing in a quality WMS (warehouse management system).
This can help you with everything from planning out the storage location for various items, all the way to managing your staff and resources better.
Keep in mind that some of these tools also assist with the delivery system and fleet management, which provides you with end-to-end assistance in organizing your supply chain.
Proper Equipment
One of the first things you need to take into consideration when it comes to running a successful warehouse is the fact that you need to have adequate equipment.
What this means is that you need to invest in forklifts, trolleys and handcarts that your staff can use in order to handle the materials and containers that you’re working with.
Things like ladders and similar support items are also more than necessary. Keep in mind that buying this equipment solves just one part of the problem. You also need to invest in training and maintenance.
First of all, by properly training your staff, you’ll reduce the likelihood of both injury and property damage, which is crucial when it comes to reducing costs. Second, it will increase the life-span of warehouse equipment, which means fewer hours of downtime due to malfunction and longer time until you need to replace a piece of equipment.
It’s also smart to have a skilled mechanic on the retainer, as well as some spare forklift parts so that you can fix the issue right away and resume work.
Smarter Hiring
Hiring conscientious and hard-working employees are definitely your safest bet when it comes to cutting warehouse costs. Why? Well, when hiring idlers, you will have a reduced efficiency which means that you’ll either have to hire a bigger staff or lay them off and repeat the hiring process.
Both of these things are quite expensive. Also, having someone who is not competent in this field operating this machinery might increase the risk of injury and damage to your property. Some of the materials that you’re handling are toxic or hazardous.
Preventing Employee Theft
One of the biggest concerns for everyone running a warehouse is the concept of employee theft. You see, when it comes to working in a warehouse, the number of items is so large that there’s no immediate transparency if something is missing. In this case, you would have to find an employee theft prevention system.
First of all, you can install a surveillance system in your warehouse. Second, you can prevent employee theft by improving your vetting process and checking why people were laid off from their previous places of work. Checking their criminal records and even testing them for various substances could turn out to be quite effective.
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Sign System
The very last thing you need to understand is the importance of a proper sign system. There are some areas where it’s safe to traverse and areas where this is not the case. You might also need fences, line markings and a number of other systems to keep this going.
You just need to remember that when it comes to safety and security, you can’t rely on what’s logical, obvious or intuitive. These things are subjective and you can’t allow leaving anything up to interpretation.
In Conclusion
At the end of the day, each of the above-listed improvements can help you make a major step forward when it comes to cutting warehouse costs. Other than just saving money, this will help you make your entire organization into something far more productive and efficient. As such, it will also make you more competitive by improving your offer and boosting your public image. All in all, it’s a massive increase for your company.
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