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Hello Team,
The important factors to improve your warehouse efficiency and reduce costs
1. Controlling inbound and outbound freight
It must be your number-one ongoing focus to prevent profit erosion. Use a consultant to help you competitively bid. While carrier agreements are proprietary, experienced consultants can still help identify areas to negotiate reductions without hurting service levels.
2. Incentive pay
Properly engineered incentive pay for performance can bring the biggest percent improvement in labor productivity. More than 50% of your warehouse labor is in pick and pack, so start there. You always need to be sure you’re not paying for productivity you’re already getting or could get in other ways.
3. Simplify Processes – Reduce Touches – Reduce Costs
Over the years, have you been layering new functions over longer term existing ones? Do product flow and order flow no longer make sense and crisscross the floor? Take a fresh look at the physical processes and steps involved in product flow and order fulfillment. Generally speaking, less steps equal fewer touches equal lower costs.
4. You Can’t Improve Something You Haven’t Measured …. Feedback to the Employee
Does your operation capture and manage critical KPIs? Do you know your critical productivity and costs on shipped orders, cost per box and cost per line shipped? I was in a $20 million company the other day and they couldn’t show me these critical metrics. How can we assess and put in place cost reduction measures if we don’t know the baseline? What do various types of errors cost? What do returns cost?
Once these things are established, THEN create regular feedback to the employees on individual and departmental performance. They’ll respond and give you higher productivity.
5. Develop More Effective Frontline Managers
Effective managers know it’s all about execution. Their ability to efficiently manage all aspects of fulfillment radically affects your costs, worker morale and the quality of customer order fulfillment. What are their individual needs? What exposure to other aspects of your business will help them understand your merchandise, your customers and vendors? What training resources are available online or locally?
6. Inbound Supply Chain
Changes to supply chain include scheduling inbound purchase orders to manage the receiving dock and yard better. Develop vendor compliance policies, including purchasing terms and conditions, on-time delivery, quality and item specifications, routing guides and importing guides, product packaging and labeling and drop ship vendor standards. Push quality and value-added services up the supply chain to the vendors so the product is ready to be put away or shipped. This reduces labor for rework of mistakes.
7. Voice-Enabling Technology
Some vendors reduced the costs to make this technology available to all different sized businesses. Voice enabling can be applied to all processes and departments – from receiving to shipping and returns – for better inventory control and increased productivity. These systems have quick install times, require no IT or modifications to your WMS, don’t require extensive training and have a fast ROI – as quickly as four to six months. Do your due diligence though, because not all voice applications are created equal.
8. Consider Third-Party Fulfillment
Third party fulfillment (3PF) isn’t for everyone. Many of our clients believe they can do fulfillment cheaper and with higher quality themselves. However, we have seen good experiences from 3PF at costs competitive with internal costs. Using a 3PF partner means capital isn’t tied up in new facilities and systems. For smaller companies 3PF lets management concentrate on marketing and merchandising functions essential to sustain growth. When you need to increase warehousing, storage or order throughput, look at 3PF as an option.
9. SaaS Versus Licensed On Premise Systems
The investment in new order management, enterprise wide or WMS systems is something that companies do only every 5-10 years because of the investment and implementation timeframe. A SaaS subscription model provides an option for acquiring a new system at a lower cost. However it’s important to understand the SaaS costs long term vs. the one-time purchase and annual support of traditional systems. Also compare the detail of warehousing function in SaaS WMS. You generally find more effective warehouse functions which can decrease costs and improve service.
10. Continuous improvement process.
Great merchants and marketers measure everything and do post mortems of their promotions and results. Do an assessment. Work out a plan. Set objectives and accountability for improvement, review progress and start again.
Regards,
Saiyid
More efficient and productive warehouse operations:
Boston Consulting Group research shows 1.2 million robots are expected to be deployed across manufacturing facilities in the U.S. by the year 2025. Why? Not only can robotic automation help manufacturers achieve greater warehouse productivity, but it can also drive significant cost savings as compared to employing workers.
Whether through automation, employee incentives, or any other means, optimizing labor productivity should be the cornerstone of any warehouse improvement effort. Since labor tends to be the largest cost factor in warehousing and order picking operations, it’s critical for organizations to understand production rates.
On the production floor, where space can be limited, it’s important to take advantage of every inch of available space (floor to ceiling). As noted in an Occupational Health & Safety article, solutions such as pallet racking can lead to safer working conditions as well as increased efficiency in the warehouse. Pallet racking, the most common way of storing pallet loads in the world, is an easy-to-use storage solution; it’s used in the vast majority of warehouses, manufacturing facilities, commercial warehouse operations, and even retail stores.
The Occupational Safety & Health Administration (OSHA) reports that musculoskeletal disorders (carpal tunnel syndrome, tendinitis, muscle strains, lower back injuries, etc.) are one of the leading causes of workplace injuries and illnesses. To reduce the risk of such injuries in repetitive, manual tasks, it’s important to design workstations according to the specific task and worker (for example, ensuring work surface height is the height of the conveyor or roller from floor level). Doing so increases ergonomic benefits and drives greater efficiency and productivity in everyday work.
As with ergonomic considerations (i.e., designing the workstation to suit the particular work being done), it’s also important to determine whether the current picking methodology appropriately suits the organization. Making the right order picking choices directly impacts supply chain productivity, so it’s not something to be taken lightly.
Most manufacturing facilities are trending toward 5S/lean manufacturing as part of their efforts to improve manufacturing processes, enabling quicker, more efficient production and lowering overall costs. According to the EPA, “lean production techniques often create a culture of continuous improvement, employee empowerment, and waste minimization [in addition to] driving rapid, continual improvement in cost, quality, service, and delivery.”
With the Industrial Internet of Things (IIoT) becoming increasingly pervasive in the manufacturing sector, the challenge then becomes: How can organizations leverage these technological innovations to stay one step ahead of the competition? Accenture predicts the value created by the IIoT could reach as high as $15 trillion by 2030, paving the way for more efficient, productive, and intelligent industrial warehouse operations.
Faster part and tool retrieval is a key component of achieving greater organization and efficiency in the fulfillment process. Automated storage and retrieval systems can, for example, increase picking accuracy while yielding better inventory control. Additional benefits to these types of systems include better operator safety, increased labor productivity, and improved floor space utilization.
One of the most important parts of evaluating industrial storage equipment is factoring in how storage systems can/will evolve with a facility’s needs over time. Performing a thorough assessment of current and future warehouse storage needs can improve storage density and picker productivity and drive significant cost savings over the long term.
When all is said and done, perhaps the best way to drive productivity and efficiency in the warehouse is to keep an eye on continuous process improvement. Successful manufacturers don’t just focus on short-term goals; they set objectives and accountability for improvement, review their progress, and start over – time and time again.
Yes, I agree with Brother answer completely happy
There are lot of ways through which you can make your warehouse more efficient. Let us understand few main role of warehouse;
1) Receive product in salable condition
2) Store goods in appropriate manner (space management and product safety is consider here).
3) Deliver goods to the customer in salable condition.
Now you have to see each area separately and see how you operate and what measures will make your warehouse more efficient.
eg:
1) Receive product in salable condition - Here you have make ways so that if your receive defective product the same can be informed to the concerned person/department immediately. If you are already maintaining GRN (Goods Receipt note) than good, If not you can start using it.
2) Storing goods - This is a challenging part. Here you have to have good systems to find problems. You can allocate BIN location, goods can be allocated as per size, volume, weight etc. Proper ventilation systems should be maintained.
3) Deliver of goods - FIFO methods should be used. Documentations should be clean and easy to maintain.
I am sure you might be using the above, if not they will improve efficiency. The post important thing in warehousing is to maintain proper systems and security of both goods and people.
Here are some visual clues to why a warehouse may not be running as efficiently as possible, (you can find more details by reading 7 things you don’t want to see in your warehouse management process.)
Excellent feedback from Experts. I too emphasize on the following points for improving efficiency..
1) Implement 5S and Safety
2) Reduce waste and be lean
3) Look for automation wherever possible, mostly to reduce fatigue
4) Create a safe and healthy warehouse
5) Improve employee involvement by various initiatives
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