Reducing Warehouse Costs
What Are Warehouse Costs?
How to Reduce Warehouse Costs
Set up internal benchmarks to help reduce your cost per order or hold the cost in line as volumes increase. You can translate these benchmarks down to department and individual work standards.
Labor is the largest controllable expense in your distribution center. Successful practices to improve performance can lower your overall labor cost.
Purchase used containers for product storage.
Use the same equipment for more than one task instead of purchasing or renting two separate pieces.
Keep existing employees. It’s less expensive than hiring new ones.
Improve inventory control and augment productivity through the use of advanced technology. In many cases, extensive training is not required to see a relatively quick ROI.
Create an incentive pay program to maximize productivity among your pick and pack employees (but don’t overpay for work that should be a normal part of operations).
Save time on production management, storage and other associated costs. By cutting out the middleman, you transfer products directly to the customer and reduce costs.
Look into improvements, such as upgraded warehouse insulation and automated lighting, to cut down on energy use. Where possible, maximize natural light from windows to further cut costs.
Stock damage, misplaced items and theft all wreak havoc on inventory. Control access points, install security systems and train all employees properly to ensure minimal damage to inventory.