So…you’ve taken the advice of experts. You’ve streamlined your labor pool. You’ve implemented a cloud WMS to identify and eliminate inefficiency. And you’ve worked hard to streamline inventory and safety stock.
But it’s not enough. You still need to squeeze more savings from operating expenses to meet your company’s aggressive profitability metrics. What now?
While it’s true that labor does represent as much as 60 percent of operating costs, there are other areas, often overlooked, that can add to the overall savings equation. Here are four you should consider:
Consider an investment in motion sensitive lighting. It can reduce power consumption, especially in bulk storage, overflow, corrugated and packing material storage areas.
Batching replenishments allow for reduced visits to bulk areas; likewise, stocking packing stations with larger amounts of material reduces visits to corrugated and packing material areas. Also consider a switch to LED versus traditional lighting to gain both longer life and more efficient energy use. In fact, Inbound Logistics magazine reported that according to Georgia Power studies, companies can save as much as 80 percent on their lighting bill, the single largest utility expense in the distribution center, by switching to LED solutions.
Beyond lighting, consider upgrades to energy-efficient equipment, including newer and more efficient ventilation equipment. Look for energy-star ratings on electronics and eliminate vampire equipment, which draws energy even when in an “off” state, from your premises.
Water can also be a source of utility savings for the smart distribution center operator. Installing low-flow fixtures can save significantly. Lastly, consider controlled, OEM advocated shut down procedures at the end of operations (overnight) and especially during “off days” (weekends, holidays).
Now that you have that new WMS software up and running, paper has no place in your distribution center processes. With support from your cloud WMS, work on eliminating or reducing labels/movement orders, pick tickets and other outdated forms of tracking.
Take a hard look at outsourcing inserts, greeting/holiday cards and other printed material. Leveraging online vendors and their scalable production capabilities can result in reduced cost without reduced impact. And if you still can’t purge all paper from your warehouse operations, work with your office supply providers to identify recycled and lower-quality paper that still meets needs for internal operations at a substantially lower cost.
In evaluating warehouse labor and process in a quest for savings, don’t make a huge mistake and overlook the knowledge of the line employees who work the processes and procedures daily. Start an employee suggestion box for savings – people have great ideas, and are introduced to better, cheaper, but qualified products all the time. Their insight can be invaluable since they know the processes and systems that drive your operation. And don’t be afraid to put some “teeth” into the suggestion program in the form of incentives. It may be some of the best money you’ve ever invested.
Disposal and waste charges
Where available, transition to environment-friendly cleaning and office products.
Disposal of ‘clean’, environment friendly products usually falls in line with non-specialized waste, saving money on disposition costs. It’s also the right thing to do and can enhance your brand image with customers and prospects.
Want more warehouse money saving tips? Read on.