Second to providing solutions, profit maximization is arguably the most important objective of any business. However, profit maximization is not always a straightforward objective – it takes well-planned strategies and execution to increase business productivity while minimizing costs. And with rampant competition, warehouses and other businesses can easily get caught up in the loop of purchasing non-essential items.
Running a warehouse might seem easy on the surface, but nothing could be further from the truth. To ensure the principles of supply and demand work in your favor, you need to implement cost-cutting measures while working within the cornerstones of warehousing:
- Item accessibility
- Item protection
- Protecting the equipment by using security services
Monitoring each of these cornerstones can help you identify the areas your warehouse is losing money and the changes you need to implement.
How to Make Your Warehouse Financially Efficient
1. Use Space Efficiently
Given how immensely land costs contribute to a warehouse’s overall expenses, it is easy to see how wasted space not only inhibits processing capability but also contributes to financial inefficiency. Employing an experienced and highly efficient packing and crating service is one of things your can do to ensure your warehouse space is taken full advantage off. Additionally, markings using Warehouse Floor Epoxy Lining can lead employees even when not strictly supervised and help them organize whatever containers, boxes, or materials you are storing at your warehouse. Additionally, these can be used to clearly indicate proximity limits, increasing safety and reducing workplace accidents. This is a simple non-invasive solution that can help avoid micromanaging your staff, while ensuring space optimization.
Generally, the smaller the space you use, the more cost-effective your business becomes. If you need more space, but don’t want to move to new premises, Greenoaks mezzanine floors can prove to be a very cost effective solution.
Changing your business storage procedures and adding material handling equipment can help you store more items in less space while making it easier for your staff to navigate the premises. Racking is arguably as efficient as storage space optimization gets. Implementing narrow and tall racking builds without compromising your workers’ safety can instantly free up square footage for more pallets.
In a warehouse, things move fast, and depending on what you store, you could have messes or spills at any time. In order to keep things moving, easy-to-clean floors are a must. And a concrete coating makes messes fast and easy to clean up. Make sure also to consider a Warehouse concrete floor polishing.
2. Minimize Labor Costs
Despite the introduction of warehouse machinery and automation tools, labor is still an enormous contributor to most warehouses’ operating budgets. That said, cutting back on labor costs does not mean paying your employees less; instead, focus on reducing their idle time as much as possible. Remember, time is money, and paid time spent doing anything other than work contributes to financial inefficiency. You should also provide them the right tools such as hand trucks that can help them work more efficiently.
In addition to monitoring your employees’ productivity, concentrate on employee retention. Paying experienced employees is less expensive than recruiting and training new ones. To improve your staff’s productivity even further, implement on-the-job cross-training and periodic training seminars to keep them up to speed with the latest procedures.
3. Use Technology To Your Advantage
Technology can work for you in many ways, from automating repetitive tasks to tracking specific items within the warehouse. Consider implementing a dedicated warehouse management system; the time-saving benefits of knowing where each item is located cannot be overstated. Couple this with RFID portals installed throughout the warehouse, and you might never have to worry about misplaced inventory.
Regarding automation, consider all the repetitive manual tasks that rob your staff of valuable time. To determine the financial sense of automating different processes, compare the units per hour an average worker can complete versus what a machine can do, given the cost of completing a single unit.
If you are in the can making or packing business, you may want to use a can seamer technology, leveling caster and buy turntable wrapping equipment as part of your manufacturing and production process to be more effective and efficient.
More advanced and energy-efficient Induced Draft Air Cooled Heat Exchangers can also be used in warehouses where materials and products that require certain temperatures are stored. This way, you can save on your warehouse’s utility bills.
4. Purchase Second-Hand Containers
Did you know buying used containers for shipping or storage could save you up to 40%? Reputable sellers of second-hand industrial containers often go the extra mile to ensure the containers are well inspected and cleaned, especially when dealing with food-grade containers like 5 gallon food safe plastic buckets. Make sure as well to cover these food containers with ldpe sheets for a more secure and safe food storage protection. Here are some high quality used containers you might consider:
- Pallet containers
- Food trays
- IBC totes
- Metal bins
5. Focus On Energy Cost Reduction
Although typically overlooked by distribution professionals, reducing energy-related costs can provide a huge boost to your bottom line. Automatic lighting systems and efficient building insulation are by far the two most common and effective ways of reducing warehouse energy costs. Even better, the cost-saving benefits of these improvements are almost instant.
Warehouses lose sizable chunks of their annual profits to workplace inefficiencies. Fortunately, carefully evaluating your warehouse’s space optimization, labor and inventory practices can help you identify the right cost-cutting measures to improve your bottom line.