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10 Tips to Help Save you Money in your Warehouse

Filed under: Materials Handling

To kick off our blog for 2014, here are 10 tips to help save your business money within your warehouse operation. In recent years, businesses have found maximising profits difficult due to the economic climate and have continued to look for areas in which costs can be cut and productivity can be increased. This week’s blog will focus on 10 simple and effective ways to cut costs from your warehouse operations in order to contribute to the maximisation of profits in the year ahead.

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1. Error reduction: focus on reducing error within the warehouse. Improving the overall quality of operations will aid in the reduction of expenses. Collect data on error rates and set targets to reduce them. Highlighting where the faults are and acknowledging good performance to ensure a focus on quality within the warehouse.

2. Maintain storage conditions: Maintaining a proper temperature and humidity can be beneficial to the goods within the warehouse. To avoid unnecessary costs it is also important to cover and secure storage areas as uncovered areas can permit weather damage.

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3. Receiving practices and cross docking: Cross docking is an effective practice to reduce handling and costs while improving customer service and shipping costs. Click here to find out more about cross docking.

4. Reduce labour: Labour is a significant contributor to cost in warehouse management. By integrating automation within the warehouse, labour costs can be drastically decreased and long term profits can be realised.

5. Optimise space: Land cost is one of the largest contributors to costs in warehousing. Cost per pallet stored should be questioned to ensure space is optimised. The type of racking within your warehouse should utilise the height of your warehouse. Aisle space is also a consumer of space and having the right equipment to optimise this space can contribute to cost savings for the future.

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6. Re-assess suppliers: re-examine your suppliers and have them submit new bids on products and services you frequently purchase. Compare to quotes from other suppliers and determine where spending can be curbed.

7. Assess new technology: investigate new lower-energy systems and replace older equipment which costs more to run.

8. Save energy: Timers and sensors so that lights turn off when no one is around an area of the warehouse is not only energy efficient but will save you money on your electricity bill. Alternatively, replace existing light bulbs with energy-efficient bulbs. Also, painting walls white and installing windows to introduce natural light improves light levels while reducing energy expenditure.


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9. Employee suggestions: Employee suggestions can play a key role in reducing costs and improving productivity within the warehouse. Employees have hands-on experience regarding daily operations and can come up with easy-to-implement cost saving ideas. This also ensures employee commitment to implement cost saving strategies is greater.

10. Continuous improvement program: reducing wasted motion, wasted time, wasted inventory and more can be controlled through a continuous improvement program. The program should include visual communication of information, process mapping, process control, and identification and elimination of defects. By implementing such a program within the warehouse efficiencies can be improved and costs can be minimised.

Can you think of any other ways for a business to cut costs and maximise profits within a warehouse operation?

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