5 Tips to Reduce the Cost of Running a Warehouse
If you are reading this, you likely know that the cost of running a warehouse is not cheap. And if you’re a business owner, you may wonder how feasible it is to get from your garage to a warehouse (more on that next week). You can do it! And who doesn’t like saving some extra cash here and there? Just follow these 5 tips to reduce the cost of running a warehouse and you’ll be better prepared for whatever your next phase is.
1) Reduce the cost of labor
You want to have happy employees and compensate them fairly, and you can empower them to be better by investing in good technology. Conveyors and automated picking systems, for example, can reduce the high cost of labor by speeding up your processes.
Another way to reduce labor costs is to have a good WMS. It can track Key Performance Indicators (KPIs) and show you where to put your focus. A good WMS will also help you be more accurate in your picking and more organized.
Employee turnover can also be a problem worth solving. Hiring and training a new employee is very costly and slows down your production. You can do this by incentivizing for performance successes and improving training.
2) Regularly check and maintain equipment
Performing routine and scheduled checkups will prolong the life of your equipment. And more importantly, you can prevent problems from blindsiding you. Damaged equipment will cost you to fix it, but that is fairly minor compared to the cost of the equipment’s unusable downtime. If you have a smaller business, that broken item could halt your operation.
Do yourself the favor of scheduling your machines for regular maintenance checkups, especially if you have used equipment. Buying used materials is a great way to save some money, but if not inspected and kept up, they can get costly in a hurry.
3) Save energy
It may sound simple, but remind your employees to turn off the lights when a room is not being used. You’d be surprised by how much money is lost because people forget to turn off lights. In 2010, Cornell University calculated that it could save $60,000 a year by turning off lights not in use. That’s a good chunk of change!
If employees still have a hard time shutting things down, consider using light timers.
Adding more windows to give your warehouse more natural light and using energy-saving light bulbs will also help. Replace normal light bulbs with halogen incandescents, compact fluorescent lamps (CFLs), or light emitting diodes (LEDs). But don’t forget to check the wattage limits of your light socket.
4) Improve your warehouse layout
Improving your warehouse layout can make a big difference. Minimizing the overall touches of moving materials around can greatly reduce the cost. This may take some more time and effort to accomplish, but that just means the ROI is much higher!
One idea to consider is converting to narrow aisles in order to increase storage capacity. You can also evaluate how much space you need to get an idea of where you could save.
5) Protecting your inventory
Set up ways to protect your inventory. That may be an alarm for the entire warehouse or password/ID protection on doors. For expensive items, consider setting aside protected areas and wire partitions to reduce the chances of theft.
And don’t forget to package your inventory properly, for when you both store it and ship it. Doing so can prevent unnecessary damage to your products.
Reach out with your questions, we are here to help!