15 Ways to Reduce Warehouse Expenses
9. Inventory control. Inventory is the largest balance sheet asset in most businesses, Barry reminded attendees. Without accurate inventory, you can’t have sales or move orders efficiently in the distribution center. Use aisle mapping (proper location of product without counting) frequently.
10. Barcode scanning. This may be the most underused technology in our industry, Barry said. Maximize its use from dock receiving to put away to picking, pack confirmation, shipping, returns processing, inventory control and cycle counting. Speed up product and order flow through the center. Increase inventory accuracy to 99.9 percent.
11. Effective warehouse layout. Look to increase capacity within the same facility, and streamline product and order flow, Barry said.
12. Work standards and measurements. You can’t improve that which you haven’t measured. Apply benchmarking principles to set up internal benchmarks. Use external benchmarking to understand what other companies achieve and for best practice ideas.
13. Management of labor. Labor accounts for more than 50 percent of the cost per order for call centers and warehouses.
14. Develop a world-class team. There are 11 key issues you need to resolve, including staff empowerment, delegation, hiring competent people, recruiting, training the person who will eventually take your place and more.
15. Use third-party logistics. Barry noted that his clients have used third-party logistics more in the last two years than in the prior 10. Internal costs have increased to the point where, for many companies, on a total cost-per-order basis, it’s cheaper to use third-party logistics. Additionally, companies avoid having to invest in infrastructure such as warehouses and systems, and have reduced management of fulfillment, call center and IT. Companies instead can concentrate on the critical areas of marketing and merchandising.