Improving Warehouse Operations Improves Profits

It is common knowledge amongst warehouse operations and owners that inefficient processes in a warehouse gradually erode the bottom line. A survey by Intermac showed that warehouses and distribution centers lose around 3000 hours a year owing to workforce inefficiencies. Additionally, the survey also showed that 30 percent of warehouse managers had not reviewed their warehouse processes in the past year. It’s not hard to imagine the impact of such inefficiencies on profits.

But here’s the good part – proper planning and strategies to improve warehouse performance can deliver incredible results in terms of your warehouse efficiency that can be reflected in your balance sheet. In order to increase profitability, it is imperative to constantly work on the improvement of warehouse operations. And by warehouse operations, we mean not only the cost-cutting measures, but almost all aspects of the operation. By thoroughly analyzing the amount of space, labor, equipment and automation your warehouse operation requires, you can create appropriate plans targeting to improve the efficiency and thereby the profitability of your warehouse. Let us find out some of the ways you can do that.

Planning

This is the fundamental step to improve efficiency and profitability in a warehouse. This step starts by evaluating the available resources and other variables such as the number, size and type of orders that the warehouse will receive in the given period. Also take in account the labor, equipment and inventory levels you need to meet demand. Accordingly, you can formulate a plan outlining the labor, inventory levels and the space you need.

Inventory Management

Based on the planning stage, you take steps to manage inventory better. This can be done in three ways: accessibility, organization and space management. Placing the high-selling goods in accessible areas minimizes worker travel time, effectively increasing productivity and getting more out of your labor costs. Secondly, organize your stock by categorizing it, labeling it and storing it neatly. This will make it easy for workers to locate items, improve efficiency, reduce labor costs and maintain your warehouse profitability. The third step is to utilize the space in the best way possible by organizing your products in a way that frees up valuable space that’s underutilized. Try to maximize your current space by adding additional racking and taking your stock vertical.

Equipment Management

To increase the efficiency of a warehouse’s operations, you need the right equipment for the job. With the right equipment, you can make the warehouse processes faster, easier and more efficient. This also reduces the need for manual labor, leaving your workers free for more sophisticated jobs that need human intervention and saving your labor costs. So having the right equipment can result in improving the warehouse operations and profitability. For example, when you need to place the product beyond a column, it would take a significant amount of time for workers to carry it and go around the column. An articulating jib, on the other hand, would take lesser time and is more efficient in handling the product, resulting in fewer chances of product damage.

Similarly, there are several other ways that can help you improve warehouse operations resulting in improved profitability. You can refer to our articles on tips to improve warehouse efficiency to know more.