70+ Cost Reduction and Productivity Improvement Ideas
Warehouse & Distribution Center – Warehouse Cost Saving Ideas & Warehouse Strategy
20 warehouse strategies to help you to reduce warehouse costs, trim your cost per order, increase capacity without expansion, and improve service levels in your warehouse or distribution center
F. Curtis Barry & Company developed these warehouse management ideas to help multichannel businesses with reducing warehouse costs and developing warehouse cost saving strategies. Our assessments are tailor-made to identify your needs and potential improvements to process, layout and use of space, staff productivity, systems and freight analysis. We have been successful in lowering the cost per order, increasing storage capacity within the center, reducing inbound and outbound freight, improving service levels and turnaround times. Fulfillment clients include Positive Promotions, Publishers Clearing House, Sea Bear, Hanna Andersson, LifeWay Christian Resources, Cabela’s, Abercrombie & Fitch, The Metropolitan Museum of Art, Belk Inc., Sur La Table, Crutchfield, Urban Outfitters, and Colonial Williamsburg Foundation; to name just a few.
Check out some of our great blogs on similar topics:
- Operational Assessment Can Rid Negative "Tribal Knowledge" in DC
- 10 Ways Third Party Logistics is Profitable for Multichannel Companies
- Operational Assessment Will Identify How to Better Utilize Your Space
- 15 Ways Identified Through Operational Assessment to Reduce Expenses
Need help implementing our warehouse cost saving ideas or formulating a warehouse strategy?
A program to set up internal benchmarks will reduce your cost per order or hold the cost in line as volumes increase. Translate these down to department and inpidual work standards. Contact us if we can help you with an independent internal benchmarking study.
2. Manage the labor force
Labor is the largest controllable expense item in your distribution center. Successful practices to improve performance can lower your labor cost.
3. Hiring, retention and attrition (turnover)
Labor is your first or second largest expense after outbound freight in the fulfillment center. Review the reasons attrition is so high and work to close the gap. Review your hiring, retention and training practices. How well are you able to staff for the peaks?
4. Reduce handling and touches
The fewer touches of product, the less cost of shipping an order. An effective warehouse cost reduction strategy is to streamline the operation and apply industry best practices in order to reduce the handling and cost of fulfilling an order.
Effective slotting practices can lower your costs for picking, replenishment, and putaway warehouse labor.
6. Team building
Successful organizations take team building seriously. Take your organization to a new level and improve productivity.
7. Picking options
How can you use best practices to improve picking productivity?
8. Use what you have more productively
This is a mantra in fulfillment today. Our operational assessments will help you get more productivity from your layout, space/product storage utilization and staff. By not caring for the basics of fulfillment, you are adding costs to the warehouse operation. Increasing current capacity and utilizing that capacity more effectively are key objectives. We believe that getting as much productivity as possible out of the existing layout, processes and systems will help you reduce warehouse costs.
9. Performance reporting
The old adage of, "You can't improve what you don't measure" is certainly true. An effective measurement and reporting process can improve performance and lower costs.
10. Packing options
How can industry best practices help you improve performance and reduce costs of one of the most labor intensive functions in the warehouse?
11. Freight management
Controlling inbound and outbound freight can make the difference between a profit or loss for your business. Learn more about freight cost reduction.
12. Use proper levels of qa
Are you “over inspecting” activities to the point of diminishing returns and spending money that does not result in a return on the investment?
13. Receiving practices and cross docking
Cross docking is an effective practice to reduce handling and costs while improving customer service and shipping costs.
14. Process returns more efficiently
Returns cost more than orders to process. Untimely processing of customer credits, refunds and exchanges can damage customer service. Our assessments look at use of staff, people, space and systems to improve productivity.
15. Workforce software
Many companies are still using Excel for their staffing software. Excel cannot save you as much money year over year as a good workforce program. Team up with your Contact Center to share a scheduling system. It will pay for itself quickly. If you have one, understand how to use it to its maximum.
16. Outsourcing option
There are practical and cost effective reasons to outsource part or all of your business. It may be to deal with a peak, new product categories or when fulfillment is not a company core competency.
17. Finding the right level of automation and systems
ROI analysis could put automation into your planning for cost improvement. The wrong material handling equipment can be creating hidden lost time and inefficient product flow, impacting cost and customer service.
18. Warehouse management/bar code systems
This should include reviewing how bar coding throughout the warehouse, conveyance, material handling and warehouse management systems can improve productivity, increase service levels and reduce costs. See more Warehouse Management Systems Implementation Strategies .
19. Inventory management in the warehouse
Effective inventory management is the single most important tool to improve customer service and reduce cost of operation. See more Inventory Management Cost Savings Strategies.
20. Replenishment practices
Effective replenishment is the basis of successful order fulfillment. Inefficient replenishment will cost huge dollars and negatively impact customer service.
The Next Step in Reducing Warehouse Costs
Ready to evaluate your facility in order to implement a warehouse cost saving plan at your company? We have warehouse strategies for your warehouse efficiency & performance issues. Give us a call at (804) 740-8743.