How to Reduce Warehousing Costs

Woman in proper safety attire moving a fork lift in a warehouse

Warehouses are like other businesses– they need to be productive and competitive and ideally make a profit for their owners. How can warehouse managers and workers work together to reduce warehouse costs? 

Here’s a basic question that really can help you assess your current situation: Is all your inventory easily visible… or not? When inventory can be seen by the naked eye then it’s easy to locate. If it’s hidden behind stacks of other things– good luck finding it! If the warehouse has gotten sloppy with the placement of inventory and “things are a mess,” that’s not good. It’s time to have everybody work together for a day or two to do some cleaning and organizing such that inventory is visible and accessible. 

Optimizing Warehouse Storage

What are some of the key things to consider for optimizing your warehouse storage? Well, there’s the physical structure of the building. Then there’s warehouse flow, as well as product placement, storage and retrieval methods. Assess each of these to see where changes could be made to make the place more efficient. Layout and design matter, especially if you want to boost productivity and reduce loss of stock while improving traffic flow, too. 

What about theft? It seems to be a problem if workers are gossiping about rumored thefts going on, or stock levels aren’t matching sales records. Meanwhile, if there are missing (or unusual) invoices, something might be “up.” It’s a good idea to have one or two trustworthy people at the warehouse subtly keeping an eye out for any suspicious activities. If and when there are thefts, authorities should be alerted. 

Finally, think about how items are arranged within the warehouse. Keep SKUs that are typically selected together physically close to each other but don’t mix SKUs. Avoid vertical picking when you can– store slower moving stock vertically. And, best of all, label all your stock clearly.

Taking the time to invest in thinking about improving your warehouse’s operation can ultimately result in the reduction of costs when positive changes are made. Of course, partnering with a reliable third party logistics company can help too.