Every company is looking to find a way to reduce costs without impacting productivity in order to increase revenue. There are numerous areas where costs can be cut, but it can be difficult to know where to start trimming excess costs to reduce waste and improve your margins. Here are 5 tips for cutting warehousing costs.
Protect your Inventory
Losses are an inevitable part of running a warehouse, and it would be impossible to eliminate them completely. However, excessive losses can eat away at your margins and result in a large loss of profit. Therefore it's important to reduce losses where you can. Improvements to packaging, shelving, and picking practices can all help to reduce damaged product losses by keeping items safe within the warehouse. Security systems such as cameras throughout and around the warehouse can help to prevent theft-related losses.
Reduce Labour Costs
When companies think of cutting labor costs, they immediately imaging reducing wages or eliminating jobs. However, both of these approaches will negatively impact productivity and ultimately may hurt your bottom line. Instead, investing in approaches to improve your team's productivity will allow more work to get done, increasing revenue without adding to your labor costs. This way, more work gets done for less cost.
Manage your Equipment Costs
Equipment can be costly, but it's often a necessary aspect of your business. Consider how you utilize your equipment, do you rent or buy? For equipment you use regularly, you will save money by purchasing the item outright. With items that you only use once in a while, it may be cheaper to rent them instead of letting them take up space when they aren't being used. For equipment you own, regular and proper maintenance is always cheaper than waiting until problems arise to fix them. Preventative maintenance saves money in the long run.
Green business practices are a favorite among customers, and you might even increase revenue and customer satisfaction by implementing sustainable practices. But sustainable practices also have an immediate benefit, they save money! Reducing energy usage through improved lighting systems, better plumbing, and improve insulation reduces your energy costs, allowing you to reallocate that money to other things throughout your business. Windows are doubly effective as they reduce lighting and heating costs, as well as increase natural light in your workplace which is known to boost employee mood.
Utilize a Warehousing Software
Sometimes it can be hard to identify areas of waste. Take the work out of the process by implementing a warehouse management system (WMS) like Routeique which can help to identify areas of improvement in your warehouse. This way, you get high-level data of your business operations and can more easily work towards eliminating waste and reducing costs.