There’s a myriad of factors that contribute to high warehousing costs depending on your business and what you store. Some of these may require heavy effort to correct, however in the long run it will be worth it. Ensuring that these four main factors are operating optimally will certainly put you on the path to reducing your warehouse costs and even improving your productivity.

Look after your employees

Your staff are the lifeblood of your business, without them you stand still. At the same time, labour costs are generally the biggest expense that comes with managing warehouses, especially if you’re experiencing high turnover. So, how can you effectively manage this?

  • Train your employees: 
    • Train them on their specific roles 
    • Add some diversity into their days and cross train them on other related roles – this will allow them to pick up the slack should other staff be unable to do their shift
    • Provide opportunities for professional development
  • Provide a working environment your employees love to come to, fostering a positive company culture can help you improve retention rates:
    • Safety should always come first, ensure the warehouse is set up to the highest Work Health & Safety standards, and that employees have all the safety solutions required to do their job well
    • Reward your employees in whichever way works best for your business to recognise their dedication, loyalty and hard work, for example, employee of month or yearly awards 
    • Break areas should be a place your employees can go to rest, enjoy their meals and catch up with each other 
      • Do you have adequate kitchen facilities including a fridge, microwave, toaster, filtered water or coffee machine?
      • Do you provide complimentary everyday food items like milk, bread, condiments, fruit, tea or coffee? 
      • Is there space to establish a fun break area to house a TV, small gym or fun activity for example a pool or ping pong table?
      • Is there plenty of space for them to rest on comfy chairs or lounges? 
      • Is there an outdoor area they can enjoy their meals?

Reduce the space you need by optimising your storage

It’s simple math, the less land you occupy the smaller your warehouse can be and the less you pay in land costs. Research the smartest ways to store your goods and see what you can implement.  

  • Racking: Racks allow you to optimise your space and store inventory efficiently. The best suited storage method for your inventory will help you reduce the square meters you need, and increase the number of pallets you can store. There are various racking combinations you can adopt with the most common being, tall and narrow. 
  • Optimising aisle widths: Aisles take up a lot of space, of course it’s important space – so you can access your inventory – but you don’t need to have them excessively wide. Know the dimensions of the equipment you use and ensure your aisles are wide enough to accommodate them.  

Manage your inventory efficiently

So you’re looking after your employees and you’ve reduced your storage footprint, next up is inventory management. 

  • Rack similar items that require the same type of equipment to reach them in the same aisles
  • Improve your warehouse slotting
    • The items that are collected most frequently should be the most easily accessible and positioned somewhere in your warehouse that allows fastest retrieval
    • If you have multiple bays with ones used for despatching or receiving certain items, ensure those items are stored as close as possible to minimise transporting times

Optimise equipment use

Your equipment is just as important as your staff, and also another costly but necessary expense. They need to work harmoniously together to ensure you have the most productive environment in operation. 

  • Talk to a material handling consultant as there could be ways to reduce operational costs and increase efficiency, whilst saving money – a consultant will help you identify these and recommend the best fit-for-purpose solution 
  • Consider your equipment options
    • Is hiring your equipment more cost effective than buying it?
    • If you definitely want to own your equipment outright, investigate whether buying new equipment is the right option for you or perhaps purchasing used equipment is better
    • Consider your fuel options, would LPG, diesel or electric be better for your warehouse?
    • Would your business benefit from incorporating automated robots into some of your processes?
    • Can you connect your equipment to telematics software enabling you and your team to be able to identify fleet utilisation and operational issues before they impact your bottom line?
    • Are you using the right equipment? Would it make business sense to bring in more appropriate machinery for specific tasks, that require less space to operate and run more efficiently?
  • Review safety options on all of your equipment
    • Are there any regular accidents happening that could be minimised with new safety options installed onto your equipment?
    • Train your staff on how to look after your equipment using preventative maintenance, empowering them with the tools and safety solutions required to check the conditions of the equipment to avoid incidents or any component failures
    • Offer regular safety training 
      • Do onsite training days with regularly scheduled refresher courses 
      • Give employees access to training resources online and onsite
  • Ensure you service your forklifts regularly using a trusted partner

If you’re looking for more advice on how you can reduce your warehouse costs overall, contact us for a free consultation. We’ll come out to your site, anywhere in Australia,  review your set up to understand your needs and the problems you’re facing with your current model mix. We’ll then work with you to provide the best fit-for-purpose solution that suits your budget.

At Linde Material Handling Australia we give you the Power to Choose with a broad range of new, used or rentable material handling equipment. With our Value, Performance and Performance Plus ranges, we can cater for any budget from businesses requiring just one truck all the way up to fully automated robotic warehouses. Get in touch today!

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