For any business to achieve its production objectives and successfully obtain maximum profits, ensuring proper warehouse management is one of the most imperative steps. That wouldn’t just include a comprehensive and strategic execution within the warehouse, but also going out of one’s way to ensure there is no misallocation or unnecessary spending involved.

However, it is not very uncommon for warehouses to get off-course with respect to productivity and cost management, and that eventually leads to cutting a sorry figure in front of the consumers. And once that grip on consumer retention slips, it might be really challenging to wade your way back up, when surrounded by such an unbridled competition.

Here, we bring to you six essential steps that will help you ensure that you are putting the right resources in the right area so as to achieve maximal profit and consumer satisfaction, with as reduced costs as possible. 

Labor Costs

Labor costs generally add up to the largest expense out of the overall costs. Therefore, it is really crucial to ensure that you make the best out of a section that consumes such a hefty amount of resources. 

That begins with making sure you hire the right personnel for the right kind of labor. Not just that, it is also imperative to regularly keep analyzing the already existing staff, to identify their strengths and weaknesses of your labor so as to recognize their skills and then further train them to improve on those existing skills.

Segregating labor on the basis of their skills will give the company a chance to ensure those skills can be further perfected, which will ultimately lead to fewer errors. And that, in turn, would mean reduced costs and increased efficiency. Furthermore, remember that rewards and incentives are always a brilliant idea to increase productivity. 

Optimization of Storage Space

The importance of space optimization can’t possibly be stressed enough when it comes to reducing unnecessary costs. You are paying for every square meter of the warehouse and that ultimately constitutes a massive amount of operating costs. Hence, you want to make sure you are utilizing every inch of that space in the best possible way.

Not just that, in the last couple of years, and more so in this currently pandemic ruled situation, online shopping has been gaining more and more popularity. That, in turn, leads to a need for inventory expansion.

Now, increasing the size of the warehouse might not always be an option for it can most definitely be an expensive endeavor. So the smartest alternative is to optimize whatever space that you already have so that you can efficiently store more in less space.

  • Aisles are the way to go. They make storage much more organized and identifying and navigating equipment a lot more hassle-free and less time-consuming.
  • Keep the aisles space just wide enough for the forklift and other machinery to move freely. Any wider than that would be a wastage of space and any narrower than that would pose an inconvenience for navigation.
  • It is important that you optimize the vertical space of your warehouse as well. So adding multiple racks to your aisles is a great idea. However, stacking tall structures of equipment can turn out quite risky when size, weight, and other related factors aren’t kept in mind. So be strategic with racking.

Cross Docking

Cross Docking is an excellent way of saving yourself on time and various other expenses. In this method, the products are directly shipped from the supplier or manufacturer to the customer, eliminating a need for any additional handling or storage.

It also increases the shipment speed, enhancing customer retention, and also the speed of the cash flow in the supply chain. Not just that, since the movement and handling of the products are minimized in this process, the risk of damaging them also reduces considerably. 

Inventory Protection

Warehouses can incur hefty losses if inventory protection isn’t taken seriously. There are many things that can go wrong such as –

  • Manhandling leading to damaged goods.
  • Inventory theft.
  • Pest attack in the inventory.

Now, each of the above possibilities needs to be approached individually. We have already discussed how proper training of labor can help reduce errors and manhandling risks. As far as theft is concerned, one has to keep an eye out for any suspicious activity such as missing invoices or the sales record not matching the stock levels, etc. Make sure to install high-security systems in your warehouse and give your keys or passwords to only a few trusted staff members for theft doesn’t always have to be external. 

A proper pest control management is immensely vital because it is not uncommon for massive amounts of goods to be damaged by termites or rodents. Make sure to get timely and effective pest controls

Auditing Packaging

Picking the right packaging for the right product is something to be always kept in mind for there can be a lot of wastage that can go unchecked when you choose the wrong packaging.

Unnecessary materials used for products that do not need such an extensive packaging, not using enough packaging for fragile equipment, using expensive or non-durable material or the wrong containers for storage can all result in unnecessarily increased costs. It is imperative to choose your suppliers for packing equipment wisely.

Check different options and see which is the best for you not only in terms of quality but also cost-effectiveness. There are various suppliers of packaging material such as Enko, for instance, that gives equal importance to quality, durability, and cost-effectiveness. Consider using used containers for storage and packaging. They’re always cheaper and can be of great quality as well. 

Using the Best Technology

One of the biggest advantages of living at a time and age like this is technology. With the right technology at your disposal, there are so many ways how you can reduce costs and improve your efficiency. Consider opting for a Warehouse Management System, if you haven’t already.

WMS can guide you with the right knowledge of what technology to go for and help businesses find solutions for their individual challenges. RFID portals, automaton for picking up and packaging products, using pick-to-light and pick-to-voice technology, and upgrading mobile technology is much more fruitful and productive compared to their manual alternatives. 

Lastly, it is important to know that while the above methods are definitely the most important ones to consider, they aren’t the only ways to improve productivity and reduce costs. You might want to look into some other methods such as slotting, benchmarking, standardization, optimizing picking processes, reducing energy costs, etc.