Can You Beat Rising Warehouse Costs

Warehouse costsWith the recent announcement that industry giant, Amazon, have increased minimum wage for their workers worldwide, the competition for good warehouse staff looks set to become more aggressive than ever going forward. With many businesses already struggling to retain warehouse workers against the lure of better pay and benefits available at local Amazon Distribution Centres, this latest news regarding Amazon’s pay increase is inevitably going to force other businesses to follow suit with staff wages – ultimately leading to an increase in warehouse costs.

Therefore, with staff costs only set to increase, this leads to questions about other areas in the warehouse where businesses can look to reduce their operating costs. The answer to this is that companies simply need to start investing in their warehouse technology if they aren’t already, or face losing their best warehouse staff and customers.

So whilst many businesses are looking at the prospect of increased staff costs and wondering how they can keep up with the new standards set by Amazon, we thought we’d take a look into some easy wins that can streamline processes and provide a more cost-effective warehouse environment.

Review The Effectiveness Of Your Processes

Firstly, it is impossible to improve something without knowing where the issues lie. For this reason, when trying to reduce costs and boost customer satisfaction, businesses must first measure and analyse staff performance, error rates and average picking speeds, so that areas where improvements can be made are accurately targeted. It can be a costly data preparation nightmare trying to manually collate this information but, by using the correct software and reporting tools, warehouses can quickly identify what needs to be improved and dramatically reduce wasted staff time as a result.

The next thing then that businesses should evaluate is how stock is being despatched. If your warehouse is still working from paper pick notes, then you are paving the way for these to be lost, damaged or misplaced, as well as errors in picking and orders shipped out incorrectly. For these reasons, working from paper is no longer an acceptable method of picking for businesses despatching sizeable order volumes, as errors such as these can cause costly despatch delays and dissatisfied customers.

Add in the cost of time-consuming amendments, as well as the increased number of returns to be processed, and you have a detrimental impact on warehouse operations that plays into the hands of your competitors.

By using barcode scanning technology instead, businesses can greatly reduce their number of picking errors, while also increasing the speed at which orders are picked and products booked into stock. With increased competition for retaining employees, streamlining daily processes through barcode scanning technology helps you to negate the need to employ more staff to cope with demand, instead maximising the productivity of your current team of workers.

Minimise Walk Time

It’s an obvious point to make but good warehouse efficiency and a structured warehouse go hand-in-hand, as a badly organised or difficult to navigate warehouse can slow staff down. What’s more according to recent research, 70% of staff time is spent walking around the warehouse rather than picking and completing tasks. Companies such as Amazon and Ocado have already implemented robotics to dramatically reduce this walking time, however there are other quick and easy wins that can be achieved through simply better organising despatch processes.

With the constant pressure to improve throughput, it is always valuable to evaluate walk routes and minimise walk time for pickers. If your stock is badly organised and similar items are placed at opposite ends of the warehouse, then extra time spent navigating warehouse aisles can quickly mount up. Similarly, having fast moving stock located towards the back of the warehouse will also slow down the despatch process, as workers must make frequent trips that take longer to get the items they need back to packing stations and despatch gates. What’s more, businesses should also look to keep commonly used pick faces topped up with stock so that staff aren’t having to collect items from bulk piles or high up racking.

Additionally, if there is already sales demand for stock arriving for suppliers, there are huge time saving benefits to despatch these items at the same time they are booked into stock. This eliminates the double-handling of putting stock back on shelves, only to have another member of staff come and pick the stock a short time later.

Therefore, to help increase order pick rates, it is beneficial to optimise the layout of your warehouse, the walk routes used and the way stock is handled, so staff are always using the fastest and most logical methods of conducting their daily warehouse activities. By making it easy to progress through the warehouse using logical set ups, such as ensuring your packing bench is near to the despatch gate and items often bought together are stored together, you can achieve streamlined operations that help to keep costs down and increase your throughput.

Getting The Most Out Of Staff

Once you’ve got an optimised warehouse structure in place in terms of layout and structure, you can focus on getting the most out of your staff. By using tools to accurately monitor picker performance and record average times, businesses can set efficiency targets for staff to achieve. Once you have an idea of these average travel times, you can even use software for picking countdown timers, so staff are actively aware of the time they should be taking to complete tasks. This also helps to create a sense of urgency in their work rate. By maximising picking productivity, you can help drive customer service levels whilst also keeping overtime and staffing costs under control.

Businesses can then further improve operations with tools to ensure the most suitable pickers are always being selected, e.g. heavy picks to a forklift driver, pickers based in certain warehouse zones etc. By using automated pick assignment, businesses can take the headache out of effectively determining the logic behind the creation and distribution whilst also driving greater efficiency.

Create Cost-Effective Operations & Reap The Benefits

So to round up – with the current wage benchmark being set by Amazon, it is down to businesses to take the initiative and address their warehouse processes now in order to beat the curve of rising staff costs being set out by larger corporations. By investing in the right technology, streamlining workflow processes and ensuring you are always getting the most out of staff, you can keep costs down in all aspects of your warehouse operations, while also driving the accuracy and efficiency that your customers expect.

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