Updated: Feb 4
Improving warehouse performance is a worthy investment for ensuring your supply chain can deliver orders flawlessly. However, it’s critical to ensure that investment is as wise as possible. It’s not just about pouring more money into warehousing, nor is it a matter of slashing costs to almost nothing. Instead, your goal should be to ensuring that your organization has effective and efficient warehouses that help you achieve your business goals.
The Holistic View
It’s important to take a holistic view of your warehousing processes as well as the physical space of your warehouses to find improvement opportunities that can help drive cost effectiveness and greater efficiency.
Scrutinizing your warehousing processes for redundancies and bottlenecks can reveal improvement opportunities with the potential to reduce costs.
Labor is one of the biggest contributors to warehousing costs, which means improvements toward greater efficiency can pay off appreciably.
Investments in new warehousing technology do cost money up front but can lead to big savings down the road
Adopting more sustainable practices for your warehouse can also lead to savings. For example, better insulation and automatic lighting systems can reduce energy-related costs, while purchasing used containers (like metal bins, wire baskets and pallet containers) can promote re-use and help the bottom line.
Reducing warehousing costs is rarely a matter of optimizing a single area like labor or technology. To lower costs in a sustainable and impactful way, you’ll want to look across all of these areas and develop a multi-pronged solution that addresses people, process, technology and the physical environment of the warehouse.