How to Keep Warehouse Operation Costs Down and Increasing Productivity

It is difficult to increasing productivity, whilst reducing costs and inventory. As well as deliver exceptional customer service. It is one of the greatest challenges many businesses face in their warehouse facility. It can form into many warehouse performance key performance indicators (KPIs).

It requires consistent effort to ensure efficient use of:

  • assigned resources,
  • optimised stock rotation and,
  • achieve best performance from the warehouse function.

With ever increasing competition, the performance of a warehouse is vital to the success of a business. A warehouse needs to be flexible to cope with demand variations in addition to lead times. All whilst performing at its peak with less inventory, working capital and resources.

Optimising a warehouse performance takes planning, preparation, research and as well as, ongoing investment towards continuous improvements. Some key areas to focus on include:

Warehouse Productivity

Storage Solutions and Handling

Through the optimisation of pallet racking and shelving solutions, the warehouse performance will improve. Warehouse Managers should consciously be making a consistent effort to utilise all available storage space. As it will result in better warehouse efficiency and financial gain. Also it will also reduce the per unit storage cost of inventory.
Better organisation of pallet racking and shelving will reduce time to identify and pick a desired product. By replacing ineffective behaviours it will firstly increase the smooth flow of inventory and secondly operations.

Movement of Inventory Internally

Make sure that the storage of inventory is correct. So that it is not leading to inefficiencies in regards to time and costs. This includes labour, equipment, lighting, rent and electricity.
When laying out the storage areas in a warehouse, some considerations are:

  • day-to-day operating procedures,
  • storage capacity,
  • inventory management,
  • ergonomics,
  • labour and,
  • material handling equipment.

Place slow moving stock items towards the back of shelving. This leaves room for fast moving stock at the front to reduce time when picking and packing.

Managing Inventory

There’s a fine line when it comes to managing inventory as it directly affects a businesses bottom line. Successful inventory management ensures availability of the right amount of items and keeps track of existing inventory and its movement. A good strategy for inventory management is to monitor stock movement. Then planning to receive items only as they are needed. In contrast to maintaining high stock levels.

People Movement

Effective warehouse layouts will take into consideration the amount of movement required from personnel. By reducing movement of staff including fulfillment of orders, the risk of inventory being damaged or broken is reduced as well as time required to pick and pack.

Time Wasting

Some timewasting things to consider the cost of are:

  • avoiding delays where possible,
  • track warehouse activities regularly and,
  • take into account personnel,
  • systems,
  • stock levels, and
  • accessibility to inventory and administration processes, e.g. receiving and dispatching of orders.

Every minute counts when running a successful warehouse operation. As well as every minute costs including wages, rent or mortgage, lighting and heating. By understanding and knowing the impact these costs have will encourage better time management and improve processes to avoid delays.

Preventing Problems

If an issue arises in the warehouse facility, attend to it immediately. Consequently, subsequent issues can be avoided this way and can save additional costs, time and reputation. Record the issue and add it to the operations safety manual so it can be identified quickly if it happens in the future.
Plan and review warehouse operations regularly to ensure maximum performance, this will assist with reducing costs, better management of time and higher quality performance of the warehouse facility overall.

Leave a Reply

Need to optimise your racking structure?

Contact us we’d be happy to help!