Most warehouse operators find it challenging to reach a stable point of profit because of how costly maintaining inventory and the warehouse is. Much like most businesses working on a tight margin, they are looking out for the best ways to reduce operating costs without sacrificing performance and the welfare of their employees. What makes it difficult are the unforeseen factors that come out of nowhere that can affect productivity and efficiency.
Some distribution professionals are in circumstances where they cannot postpone implementing cost-cutting measures. Warehouse costs affect the largest percentage of overall logistics costs, hence, it has to be managed diligently.
If you’re stuck in a rut, you can learn how to balance reducing operation costs and maintaining the quality of your operations here. Here are the top tips that can help reduce warehouse upkeep costs.
Lessen delays, errors, and damages
Inefficiencies in the day-to-day operations of your warehouse must be identified from the onset in order to help reduce unforeseen costs.
One of the best tactics to apply in lessening unanticipated expenses is to have a functional warehouse design. Much like what they do at Kansas City warehouses for lease, examine and plot your warehouse while strategizing on where to drop and load orders or your products. In doing so, this will help in reducing loading, unloading, and delivering time as well as increase time efficiency as your workers will be able to focus on other tasks.
Another way to reduce damage and delays is to maximize and optimize your floor space. Place your products in the right places and always keep your aisles as spacious as possible for easy navigation of the entire warehouse space.
Energy consumption is one of the most significant factors in keeping your operating costs at a minimum. Consider recording the trend of your power consumption every month to think of ways on how to make it cost-efficient.
To save energy, use LED lights. Although they are sold at a higher price compared to fluorescent and metal-halide lamps, they still use less energy which can help you save expenses eventually. Other than that, you can also turn to use natural lighting as another alternative.
Get suggestions from your employees
Pay attention to your employees’ suggestions and insights. Encourage your employees to suggest ways on how to make your operations more cost-efficient, without compromising quality.
Employee feedback is essential to the improvement of your business. You are showing your employees that their opinions are valued by hearing them out.
Reduce labor-related costs
An enormous chunk of a warehouse’s finances goes to labor. Paying your employees less is not an option, but lessening their idle time will improve profits overall.
You can also focus on employee retention. It’s less expensive to pay an experienced employee than it is to hire and train a new one.
Embrace new technologies
Maybe it’s time for you to seek new, energy-efficient systems. New technologies have been introduced to improve work efficiency and productivity. A good example is warehouse drones. New tech like drones can significantly help.
Important takeaway: make sure that you are regularly making room for improvement. Because none of these tips will work if you don’t. The more changes you can implement that can help, the more room for improvement you will be able to find that can reduce upkeep costs.