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5 Ways to Reduce Warehouse Management Costs

The Pursuit of Warehouse Cost Savings

 

Warehouse costs are a large percentage of overall logistics costs, which means as a warehouse manager or director of operations, you are often in pursuit of continuous improvement and warehouse cost saving.

Beyond managing labour costs, there are many key areas where increases in warehouse efficiencies can be made. Here we discuss 5 of those key areas, to help in reducing your warehouse management costs.

 

5 Ways to Reduce Warehouse Management Costs:

 

1) Lower Electricity Consumption

 

Lighting accounts for one of the largest percentages of warehouse energy use (the other being heating), making it the best target for long-term energy savings.

 

– Occupancy sensors and timers

Turning off lighting (and equipment) when not in use is the first strategy any energy auditor would recommend. This also applies to computers and office equipment. Occupancy sensors and timers can help in ensuring lights and equipment aren’t left on when out of use.

 

– LED lighting

With electricity being charged based on two measures; consumption and demand, upgrading to a more energy efficient lighting variety such as light-emitting diodes (LEDs) can ensure you gain better value for money, higher efficiency, and longer bulb life.

LED lighting also offer lower lumen depreciation rates, better dimming options, a faster start-up and less glare, making them a great alternative to traditional metal halide (MH) probe-start and pulse-start lamps often used in warehouses.

 

2) Reduce Heat Wastage

 

When it comes to facilities management, managing heating costs in warehouses in a bid to lower energy consumption should be a top business priority.

Energy costs typically account for 15% of a warehouse’s operating budget yet with a few quick energy saving tips, you can help to lower heating consumption and wastage drastically:

 

– Checking seals

A major source of energy loss is caused by air infiltration through gaps around doors on the loading dock. Checking employees keep doors closed, whilst repairing any gaps in door seals provide quick energy saving solutions.

 

– Regular maintenance

Performing maintenance regularly can ensure your facility and equipment are in good working order. The maintenance of heating, ventilation, cooling and refrigeration systems is crucial in the avoidance of energy wastage.

 

3) Input an Employee Suggestion Scheme

 

A well-designed employee suggestion program can offer several benefits to your organisation. Many well-known, successful and trusted organisations, such as Toyota, have achieved significant cost savings by asking employees to suggest ideas to reduce costs.

By listening to your workforce, and inputting their suggested processes, you will notice better employee engagement, an increase in job satisfaction, a boost in morale as well as a reduction in cost and increase in revenue.

Every workplace is different, so you will need to give the design of your employee suggestion scheme some careful thought, but with so benefits to gain in doing so, it’s certainly something to think about.

 

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4) Optimise Warehouse Space

 

Land cost is a large contributor to costs in warehousing. Cost per pallet stored should be questioned to ensure space is optimised. The goal is to optimise your warehouse functions and achieve maximum efficiency and space utilisation.

The type of racking within your warehouse should utilise the height of your warehouse, whilst aisle space can be optimised with use of the right equipment, such as hydrostatically powered forklift trucks, ideally diesel operated with common-rail technology, helping to contribute to warehouse cost savings for the future.

 

5) Embrace New Technology

 

As much as 46% of small and medium-sized businesses (SMBs) in the UK either don’t track their inventory or use a manual method, often resulting in them falling behind.

Integrating efficient inventory management with the help of a Warehouse Management System (WMS) can mean less manual errors and better transparency regarding stock levels.

By embracing new technology and selecting the right WMS for your business, you can identify areas of high performance as well as the comparable inefficiencies, helping you to reduce warehouse costs by up to 30%.

 

Warehouse Management Solution

 

If you’re in search of an all-inclusive warehouse management solution to help gain higher efficiencies, enhanced productivity and inevitably saving on costs, contact Vardells today.