5 cost saving ideas for warehouses you need to try
Every business wants to save money. Everyday expenses are a good place to start as these are often far costlier than they need to be. Small changes to your warehouse operations can result in greater profits – but you might not know where the problems in your warehouse lie, making it difficult for you to address them.
There are small business areas that can have a huge impact on operating costs which you might not be aware of. To help you reduce costs in your warehouse we looked at what experts are saying about the topic and collected what we believe to be the most valuable pieces of information.
Here are 5 cost saving ideas for warehouses you may not have considered yet.
1. Reduce errors
Time spent correcting mistakes is time – and money - wasted. Adaptalift Hyster, one of Australia’s leading materials handling companies, states that errors, such as incorrectly packaged orders can become very expensive, especially when they recur unnecessarily. To reduce the errors in your warehouse, and thus save on correction costs, you first need to know where they occur and how often.
A good solution is to put an error tracking system in place. You can collect the data and assess the where, why, what, who and when of each mistake and identify any problematic patterns. You can then share the information with your employees and improve processes to reduce the room for error. Your staff will feel far more motivated to stop making mistakes if you set clear targets and rewards.
2. Reduce cleaning
Keeping your warehouse clean is critical to your business – but it doesn’t have to cost you a fortune. One of the most useful cost saving ideas for warehouses relates to cleaning processes. Think about it this way – if there was less dust on your equipment and products to start with, much less cleaning would be needed.
Given how dirty and dusty some warehouse processes are, this might sound like an overly optimistic outlook – but it’s not. With the help of an air purification system like Zehnder Clean Air Solutions, you can significantly reduce the amount of dust in your warehouse.
Zehnder Clean Air Solutions will filter the dust from the air in your warehouse before it can settle on your equipment or goods. This means less cleaning required, which will translate into impressive savings.
3. Optimise your use of space
Warehouse space is expensive. It’s important that you evaluate your current requirements against the size of your site as you could be paying for more than you need.
To identify if you have this problem and to eliminate it, Adaptalift Hyster suggests that you start by looking at the cost of your warehouse as a whole compared to the number of pallets you are storing. If the cost per pallet stored is too high, then you need to optimise the use of space in your warehouse. For example, are you utilising the entire area from floor to ceiling – or could you maximise the height of your warehouse even more? Another example of wasted space is overly wide warehouse corridors.
Another aspect you should consider is whether the warehouse space allocated per item is consistent with the size of said item. This article from The Balance states that if a finished good is packaged in a container that is 3 feet by 3 feet, then the area where the item is stored should reflect that size. If the storage space is any bigger, then your company is paying money to store air around an item.
The bottom line? Assess your site and work out how you can store more goods in less space – you’ll save money in the long-run.
4. Increase labour productivity
Labour is another significant cost for most businesses which is why increasing employee productivity is one of our cost saving ideas for warehouses. Any resource that doesn’t work at full capacity is costing you money. So, if you manage to improve your employees’ productivity, they will get more work done in less time, which will translate into increased profits.
There are many things you can do to increase the productivity of your employees. Such as:
- Offering them performance-based incentives.
- Appointing well-skilled, productive workers to mentor others.
- Engaging employees through team-building activities and training programmes.
- Implementing the Kaizen or 5S methodologies to eliminate employee inefficiencies and improve organisational processes in the workplace. These methodologies focus on efficiency, effectiveness and continuous improvement.
- Providing employees with a clean working environment. For your employees to be fully productive their working environment must be comfortable. This includes having clean air to breathe. With the help of Zehnder Clean Air Solutions you can improve the air quality within your warehouse, making your employees happier and more productive.
5. Improve process efficiency
Inefficient processes can be hard to spot. According to this article in Multichannel Merchant, an all too common mistake is when new processes are implemented without considering how they make some functions of older processes redundant. This could mean that your employees end up doing double the work which as you know, is an expensive waste of resources.
To improve the efficiency of your processes you should take a fresh look at the steps involved in your product flow and order fulfilment, and then see if there are any steps you can remove. Generally, the fewer steps in your workflow, the quicker it will get done, saving you time and money.
“You will also want to determine how much bottlenecks in your operations are costing you”, says John Mills, executive vice president of Business Development at Rideau Recognition Solutions in an interview with IndustryWeek. “If the costs are significant, it might warrant investing in new machinery to eliminate the bottleneck or to rework the particular process.”
There are many simple things you can do to reduce costs in your warehouse that you might not be aware of. All they require is a bit of action and attention to make it happen. Once in place, these cost saving tips for warehouses will save you a significant amount money in the long-run.