All businesses, not just the warehouse business, are always looking for ways to save money. An inspection of their operations can help good logistics managers to determine where a business operation can be more cost effective.
Places where a warehouse can reduce costs include:
· Logistics Facilities and Fixed Equipment
· Labor Costs
· Stock Keeping
· Tools and Non-Fixed Equipment
Saving money on logistics facilities and fixed equipment requires making decisions when you are in the process of developing your facility, before moving in. Ways to achieve this is to seek advice from consultants who have methods of incorporating cost-effective ideas in the design stages of the warehouse. Some things to consider when attempting to save money include good insulation, flexible storage equipment and high quality flooring. All this can lead to less damage of the facility and lower maintenance costs in the long run.
(Courtesy: Wally Gobetz at flickr.com)
Labor costs are always one of the first elements to consider when discovering ways to save money. Of course, installing warehouse automation systems can provide a cost-effective way to deal with storage and order picking issues and can result in the reduction of staff needed to get work done.
Although automation can lead to lots of savings in the long run, it will take a fairly large initial investment. So warehouse managers may prefer less expensive methods in reducing costs. You don’t have to go hog wild on spending on automation. You can select the less costly forms of automation including time saving tools like scanning devices, voice picking systems and warehouse management software. Seeking cost savings means that you must stay on top of the issue at all times. That could help you make adjustments that result in more cost effective operation. An example of this is to review picking routes periodically to determine if shorter walking distances can be utilized.
It may sound like a contradiction to the desire of providing high service, but many involved in the warehouse business advise that you keep your stock as low as possible. There have been studies that show that you can reduce stock without adversely affecting delivery performance. The little voice in your head that says keeping stock levels high is a sure fire way of avoiding stock shortages later. However, high stock levels can result in more pallet movements, unnecessary handling and too much space set aside for storage. Warehouse management software can help a warehouse manage an inventory more efficiently.
Tools and non-fixed equipment can offer the largest number of options in the ever-continuing struggle to reduce operational costs. However, to use this effectively warehouse managers must have a good understanding of the tools and equipment that are available in the market. You can learn about new tools and equipment that can help shave costs by talking with logistics managers at other warehouses. Carefully keeping up with the trade magazines and attending logistics exhibitions can also keep you up-to-date on what things are available that can make your business more efficient.