Operations & Fulfillment: How to Make Your Warehouse More Profitable
Tips to Make Your Warehouse More Profitable
After you've identified the primary sources of inefficiency in your warehouse, you can begin to implement strategies that target these obstacles, using these tips to help make your warehouse more profitable:
1. Match workload to labor. Don't let your labor resources manage the workload; people generally work to the size of the pile. If you give employees eight hours to complete a small workload, they'll take eight hours to finish the work. Carefully evaluate your employees’ capabilities and plan their workload accordingly. Ensuring your warehouse is properly staffed and outfitted with the necessary equipment can eliminate costly overtime.
2. Choose location wisely. Before you decide to build a warehouse in a specific location, you need a thorough understanding of the labor resources available in the surrounding area. For example, if Europe is a primary shipping destination, your warehouse should be situated near a port on the East Coast in an area with a large enough labor pool to adequately staff your facility.
3. Treat space like gold. Wasted space limits the efficiency and processing capability of the entire warehouse. Products should move efficiently throughout the warehouse and be stored as densely as possible. By stacking items on organized, high-reaching shelves, you can improve the use of space while ensuring that inventory is still easily accessible by forklift or human. This maximizes the productivity of the warehouse and increases the profitability of your operation.
4. Remove slow-moving inventory. Since space is so precious and holding costs can rack up quickly, warehouses should get rid of slow-moving or nonmoving inventory. Inventory that sits for extended periods of time isn't only expensive to house, but it also has a higher chance of becoming obsolete. By removing slow-moving items, you can free up valuable space for faster-moving inventory and minimize the storage costs of sluggish SKUs. This reduces the need to liquidate stock and improves your bottom line.
Maria Haggerty is CEO and one of the original founders of Dotcom Distribution, a premier provider of B2C and B2B fulfillment and distribution services. She received her Bachelor of Business Administration from University of Houston, C.T. Bauer College of Business with a concentration in Accounting. Maria plays an integral role in developing and defining all aspects of the business, including sales and marketing, operations, finance and IT. As CEO, she is responsible for providing strategic leadership, establishing long range goals, and developing strategies for the senior leadership team. Maria has developed the systemic and procedural infrastructure necessary to provide timely and accurate analysis of budgets, financial reports and financial trends in order to assist the Board, senior executives and clients in performing their responsibilities while achieving favorable results. She works closely with the leadership team to enhance, develop, and enforce procedures that will improve the overall operation and effectiveness of the corporation. During her tenure at the Dotcom, Maria has developed an environment of continual improvement by supporting the Senior Leadership Team and their department managers on continuous process, space labor, automation, and financial best practices. Prior to founding Dotcom, Maria was a CPA at Arthur Andersen and was later the CFO of GoodTimes Home Video where she helped grow the company’s distribution business. When Maria is not in the office, she enjoys traveling around the world and practicing her photography skills.