8 Tips to Boost Warehouse Efficiency
Whether you operate a single, small warehouse or an entire chain, you have to run it efficiently to maximize profits. When products roll out on time and customers are happy, it’s easy to assume you’re operating at peak efficiency, but there may still be room for improvement. As fulfillment services experts, we wanted to share 8 tips that can boost warehouse efficiency and reduce expenses:
- Control freight costs.
No matter what business you’re in, freight comes in and freight goes out. An average business may spend up to 40% of its annual budget on freight logistics, so there’s a huge opportunity to reduce costs in that area. It starts with finding the right shipping vendor who is willing to negotiate rates. Decades ago, vendors delivered freight on their timetables with little transparency. But that dynamic is changing. Today, shipping vendors are eager to negotiate prices, increase transparency, and adhere to your timelines in order to gain and keep your business—especially if they are handling your inbound and outbound shipping.
- Incentivize employees the right way.
Your employees are your biggest asset. A well-designed incentive program that pays your workers for their performance, not just their time, can deliver huge gains in productivity. The majority of warehouse labor is focused on picking and packing inventory, so start your incentive program with that team.
- Simplify steps.
Have you set up temporary fixes or stop gaps over the years only to find that they’ve inadvertently become part of your shop’s permanent process? It’s a common occurrence. It may be time to look at how physical products flow through your warehouse. Does it still make sense? Can you reduce the number of steps between order and fulfillment? Fewer touchpoints usually translates into lower costs.
- Measure first, then improve.
Do you know your organization’s critical metrics like cost per unit or cost per line shipped? What do returns do to your profit margin? If you don’t know these key performance indicators, then start measuring them. Once you have baseline measurements, you can know if the improvements you put in place are working.
- Develop effective managers.
Ask your managers what they need to be better at their jobs. Are there knowledge gaps that can be filled with training? Should they be exposed to other parts of the business to understand their role in the entire process? Would a peer-to-peer training program be of value? Bottom line: Well-trained management means more efficient warehouse operations.
- Use voice technology.
Voice-directed warehousing (a.k.a. voice-directed picking) is an emerging technology where workers wear a headset connected to a small wearable computer. The computer instructs the worker where to go in the warehouse to either store or retrieve an item. These systems are quick to install, require little training, and you’ll see a measurable return on investment within months.
- Select the right software.
There are two options when it comes to warehouse management software:
- On-premises software, which requires a substantial capital investment for server hardware, software licenses, and in-house IT support staff. This is considered the more secure option, as the software remains on-site.
- Off-premises software, which is more commonly called software as a service (SaaS). This only requires a reliable internet connection because all of your software and data is stored online. It’s initially less expensive than on-premises software, however, your data may be more susceptible to security breaches.
- Consider third-party fulfillment.
You may be surprised to learn how economical it can be to use a third-party fulfillment (3PF) vendor like Taylored Fulfillment Services. A 3PF partner means that you can free up capital that would otherwise be tied up in new facilities and systems. Plus, with warehousing logistics under control you can focus on marketing and sales, which is essential for sustaining profitable growth.
Taylored Fulfillment Services is a fully integrated third-party logistics provider specializing in wholesale, retail, and direct-to-consumer unit fulfillment. Established in 1992 and headquartered in Iselin, New Jersey, they operate 1.5 million square feet of warehouse and distribution space strategically located near the nation’s busiest ports, including Los Angeles, Long Beach, and New York.