Tips for Improving Warehouse Efficiency and Making it More Profitable

Home / Tips for Improving Warehouse Efficiency and Making it More Profitable

Managing a warehouse is more than having a tight control on issues such as inventory, freight, and laborers. It’s true that labor costs can destroy any thriving warehousing business. Due to this, it’s imperative for the warehouse owner to find ways of improving efficiency. An efficient warehouse is a productive facility. When efficiency and productivity improve, the warehouse will continue being profitable.

So, how can efficiency, productivity and profitability improve in the warehouse?

Introduce Incentive Pay

First, some of the biggest warehouses operate what’s known as ‘incentive pay’. This simply means that workers receive incentives for good performance. The biggest percentile improvement occurs when workers know that their efforts will not go unappreciated or unnoticed. Since more than half of any warehouse workforce operate in the pick and pack section, it only makes sense that the ‘incentive pay’ program should start there.

Simplify Processes and Reduce Costs

Secondly, a warehouse that seeks to thrive should do the following:

  1. simplify processes
  2. reduce touches
  3. reduce costs

New functions should never be layered on tops of the old ones. Study the physical processes closely. All the steps regarding order fulfillment and product flow need in-depth studying and evaluation to ensure that all is well. By simplifying processes, the warehouse owners will lower their costs. With reduced costs come higher profits. Check all aspects of the warehouse to see if the processes flow smoothly. Remove handicaps and bottlenecks that triple or double costs. Pallet racking and warehouse storage solutions are vital to many businesses operating with products. Second hand or used pallet racking maybe the solution you’re looking for if reducing the initial costs are an important factor.

Encourage Feedback between Employees and Management

Feedback from the warehouse employees should be encouraged. Also, the warehouse owners should share information with their employees regarding performance. Individual and collective or departmental performance deserves to be studied and evaluated. The information should then be shared with the respective personnel or departments. Do this and see the workers responding positively by improving their productivity.

Appoint Frontline Managers

An efficient, productive and profitable warehouse does not just happen on its own. The workers within the warehouse are the most critical elements. Without them, warehouse owners can never manage to make their facilities efficient. Therefore, appoint frontline managers who are willing to develop teams that value efficiency. Appoint managers who appreciate the importance of proper execution. Effective frontline managers are capable of:

  • Boosting worker morale
  • Improving the quality of order fulfillment that customers receive
  • Doing whatever it takes to reduce costs

Lastly, it’s important to focus on in-bound supply chain as well. Where appropriate, make changes to the supply chain. Vendor compliance policies need to be developed well. Examine the terms and conditions regarding purchases too. Encourage on-time delivery by every person working in the warehouse. Investing in the latest technology (such as voice-over technology) is also guaranteed to make the warehouse more efficient, productive and profitable.

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