7 Ways to Save Money in Your Warehouse

Your facility’s warehouse doesn’t have to be a money pit, no matter how much it feels like it. You can turn your warehouse into a bigger money-maker by improving various aspects of it. Following are seven ways to increase both the efficiency and monetary savings of warehouses of any size.

1. Prioritize Regular Maintenance and Checks

Equipment will always cost you money. Waiting too long to check it or perform maintenance will lead to major costs and efficiency issues. Keeping your equipment running through regular maintenance ensures it will perform as you expect, preventing workplace disruptions. At the same time, you will also be able to rely on your equipment. This means a single piece to handle a single job, instead of having to run multiple elements to get the job done.

Regular maintenance also reduces the risk of injury and harm to your staff. While most like to focus on money, people are your most valuable and only irreplaceable asset. A product can be repaired or reordered. Customers can wait. If you’re able to prevent a single injury in your warehouse, it’s all worth it.

2. Optimize Storage

The speed of a pick-and-pack for an order often depends on where the products are stored. Store items in ways that make them more accessible or closer to their end goal. Use whatever you have at your fingertips to understand these elements.

Check your warehouse software to determine what product is the most purchased item and which groups are most sold together. Move these to the closest racks near your packing stations. Consider advanced warehouse layout and picking techniques, as well as a robust warehouse management system (WMS) to analyze and optimize your picking routes.

As you grow, shelving and storage can scale vertically and horizontally. Match growth with your space, needs and equipment. Expansion may also lead to smarter picking, such as making each aisle a one-way avenue.

You might even need to consider adding another fulfillment location, either on the same site or at a different location. Two distribution locations may make it easier to reach customers and meet two-day shipping needs.

3. Review Lanes and Routes

Few things eat up more time in a warehouse than picking orders and bringing them to pack stations. Teams may cover hundreds of miles each day, and the longer they walk, the longer it takes to fill an order. If you’re going to spend roughly 65 percent of your warehouse budget on labor, you want to optimize the work they do.

Your best tactic to cut costs is to make it easier for your team to go faster. Speed will be determined by the product location for each order. Analytic tools can also enable you to deliver orders to pickers more effectively, giving them an optimal route through the warehouse for their orders while helping them understand how other pickers are moving around. This will significantly cut time spent walking to products and reduce miles of unnecessary back-and-forth.

4. Upgrade Your Tech

Gains in operational efficiency often require the right technology to realize them. Boosting your fulfillment speeds and order accuracy frequently depends on how orders are delivered and verified. Mobile technology offers a proven way to update and check orders as your team picks and packs them.

While barcode scanners and solutions are now in most warehouses, newer options are available to help your team work even better. Smartphones and tablets that sync with a WMS can provide greater coverage and usage throughout your warehouse.

Modern handhelds are ergonomic with user interfaces your team can quickly learn and enjoy. Scanning and verifying orders on the floor, getting updates or even reporting issues can now happen with the tap of a button and a lot less walking.

Some warehouses are also investing in units that support voice picking, making it easier to get and confirm products. This can reduce manual errors and keep things moving smoothly.

5. Look up

Lighting can make a significant difference in your warehouse. You can save money and even help your team with the right lights. Savings typically are associated with energy-related costs. Refitting your warehouse with different lamps or fixtures can reduce some of your monthly costs, generally recouping your expenses. Brighter light-emitting diode (LED) bulbs can give you better coverage while still lowering power consumption. One of the biggest improvements involves automatic lighting systems, which can dramatically reduce costs without affecting worker productivity.

Depending on your warehouse, you might also be able to save by increasing the amount of insulation, installing windows to allow for more natural light, and repairing or replacing old piping that may leak or use water. Consider installing hands-free faucets and wash stations, efficient cleaning stations, and automatic and/or low-flow toilets.

6. Consider What You Offer

Struggling to meet order turnaround times and schedules? Ask customers if you’re offering what they want, or if they don’t need immediate delivery or other items. If you have retail locations or partner stores, would they want an in-store pickup option?

You may discover your customers need something you’re not offering or aren’t interested in something you do provide. This type of evaluation might reveal that customers would prefer getting a series of products or kits instead of having to buy one-offs.

Some shops do well simply by automating reorders and resupplies for their customers. This generates recurring, reliable revenue and prevents anyone from running out.

7. Educate Your Team

None of the changes discussed above will have any impact if your team isn’t ready for them or you lack a change-management plan to put the new habits into place. Plan and communicate as much as possible before, during and after the shift. Tell your team what to expect. Show them how things are changing. Return to ensure new policies are being followed and to answer any questions.

In the warehouse, every gain you make depends on your people. They use the systems and new equipment, follow new practices, and may have the perfect idea to further improve operations. Treat them like the team you want them to be with all the help and training they require. Remember, the most efficient team in the world is one that’s happy and informed on how to execute properly.

About the Author

Jake Rheude is the director of marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse.