The main concern to any warehouse operation is that if shipments are going to be delivered in time to keep their clients satisfied.
Did you know that warehouse efficiency has a direct correlation with customer retention? Customers normally tend to stick to the supplier that is able to deliver their products faster, and an inefficient warehouse will also lead to longer wait times and wasted labor.
You can find below a few tips that should reduce operating costs and will certainly improve efficiency of your warehouse operations:
Storage Optimization and Lean Inventory
Purchasing new warehouses or expanding your current location isn’t cheap. You should first look for ways to optimize the space you already have.
Redesigning aisles with shorter distances between each other and building storage upwards should help minimize travel time for employees and will reduce equipment collisions.
Following a similar strategy adopted by manufacturers, a lean inventory’s basic premise is that you should store the exact amount you need, reduce any excess stock that builds up and focus on getting supplies delivered more frequently and in smaller quantity.
Optimizing Labor Efficiency and Incentive Pay
You should be always looking for ways to make the warehouse operation smoother and simpler for everyone. For example, travel time can be optimized by placing high-volume items closer to the front of the warehouse. Storing items that usually sell together (Graham Crackers and marshmallows, for example) can also help streamline and reduce delays by placing items in accessible locations based on their rotativity.
Employees are happy whenever they see their efforts recognized. A well-planned incentive pay can generate a huge improvement in labor productivity. But always make sure that you are not paying for labor productivity that should be already happening or can be increased in different ways.
Key Performance Indicators (KPIs) are crucial to understanding errors and create strategic cost and error mitigation solutions in any business. You should know all critical productivity and specific costs, such as cost per package or per shipped order, and it should be at a high level of detail being a small local warehouse operation or a multinational company.
Feedback is also clearer and more precise if you know both unit and individual employee performance. Good feedback should result in higher productivity.
Everyone knows that technology equals improved speed and efficiency in any industry, consequentially reducing costs. However, this is only maintained if your tech is up to date.
Did you know that a mobile phone can also be used as a warehouse device? Currently, there are warehouse mobile solutions that connect the entire warehouse over wi-fi, and employees have their own personal device that includes features such as RFID, voice recognition, pick-to-light and others that can reduce picking error by more than 67% compared to traditional manual methods.
Even though an initial investment is required, it is certainly paid off by the significant cost efficiency associated with modern technology.