8 Ideas for Managing Warehouse Labor and Reducing Costs

Labor is typically the one of the largest distribution expense items, along with freight costs, for most companies. According to Indeed.com, the job employment website, the average base pay for warehouse workers is $16.78 in the U.S. However, when you factor in benefits such as healthcare, training and more – the fully loaded cost balloons to $28.86 per hour. Companies typically have the following costs over and above the base pay:

  • Benefits and healthcare: 35% of payroll costs
  • Workers comp and unemployment: 8% of payroll costs
  • Training: 4% of payroll costs
  • Recruitment, hiring and HR: 25% of payroll costs

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The 6-Step Plan To Conducting A Warehouse Management Audit

In today's challenging and competitive world, your success can hinge on whether your warehouse operations are productive and effective enough to meet customer expectations. 

One way to gauge how effectively your warehouse operations meet those expectations is to conduct a warehouse operations assessmentwarehouse assessment

A warehouse operations assessment, also known as a fulfillment center audit, is a systematic review of all warehouse functions and possible efficiency and service improvements. Keep in mind, that if you cannot measure something, it is difficult - if not impossible - to improve it. 

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10 Ways to Improve Your Internal Benchmarking Programs

One of the most important pieces to managing your operations is to understand how your workers are performing, how costs are trending, and what to do based on what the data is saying. For companies that are just beginning to implement metrics and KPIs, the task can seem daunting. For companies that have utilized benchmarking for quite some time, they might have benchmarking that needs to be reviewed and evaluated. Consider these 10 aspects to improve your internal benchmarking programs.

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The Dangers of Choosing to Go Multi DC and How to Mitigate the Risks

Multi distribution center strategies and risksMany retail and ecommerce companies are feeling more pressure to reduce time in transit to the end customer, pushing the operations to provide options for supporting this. Being closer to the customer in general is a good thing, but for many companies, this can lead to disaster. Because of the complexity, it’s easy to under-estimate the order processing, WMS, and process changes required; recruiting and hiring costs; additional inventory investment and the financial implications.  

It’s not uncommon for businesses to commit to multi-DC, only to have disastrous results which can cost the business significant cash and erode the customer base, or worse, put them out of business. Our objective isn’t to dissuade companies from going multi-DC, but to identify the risks, costs and where companies fail to properly plan and execute.

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9 Distribution Center Benefits From Capturing Item Weight & Dimensions

Operations are under a lot of pressure to continually meet customer demands, as well as to support marketing and merchandising initiatives which often means adding many products, providing value added services to customers, and increasing order volumes. From a warehousing and distribution consultant perspective, we are often asked what the tasks are that the warehouse operations can undertake, that can have the largest impact.

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10 Considerations for Transitioning from a 3PL to Internal Fulfillment

Companies that utilize third party fulfillment (3PL) services sometimes reach a point where they consider transitioning from the 3PL services to internal warehousing and order fulfillment. Some of what drives these decisions is to control costs, whereas others have had a bad experience with 3PLs and now only trust themselves with their product. Using a 3PL isn’t for every company.

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10 Supply Chain Strategies for eCommerce Businesses

The Chinese military strategist, Sun Tzu said, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”  

How does this apply to modern day fulfillment and Supply Chain?  Many fulfillment centers spend much of their time implementing reactive tactics without ever thinking through the strategy of what they are trying to achieve. The terms tactic and strategy are often confused and incorrectly used interchangeably.

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How to Calculate Fulfillment Cost Per Order

Fulfillment cost prder order calculations and data requiredFulfillment cost per order is the sum of all the warehousing expenses involved with shipping orders, including:
  • Receiving, inventory putaway, and storing the product.
  • Fulfilling orders through picking, packing, shipping.
  • Reverse logistics or returns processing from customers.

Historically, many managers only look at the labor portion of the fulfillment cost per order. However, labor only represents 50-60% of the total costs. A fully loaded fulfillment cost per order is a better metric and includes facilities and occupancy costs and packing material costs.

This article discusses how to calculate the fulfillment cost per order, cost per line, and cost per box shipped.

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Taking Physical Inventory: 13 Best Practices for Counting Inventory

taking-physical-inventory-best-practicesInventory is typically the largest balance sheet asset in most companies. Accurate inventory is required to deliver timely and accurate customer service as well as calculate profitability correctly.

The process of taking physical inventory once or twice per year to correct on hand counts by SKU is tedious, time consuming, expensive and disruptive because they generally halt all production through the distribution center.

Causes of shrinkage include theft, poor inventory processes, inaccurate systems, lack of use of cycle counting and not having full bar coding of products.

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Dock to Stock: 10 Efficiency Ideas

Understanding Dock to Stock Times 

dock-to-stock-efficiencyEvery fulfillment center faces the same daily pressure to meet service levels, and much of this starts with the receiving process. This makes dock to stock time one of the most important metrics. What is dock to stock time? Dock to stock time measures how long it takes to process a receipt until it put into a stock location.

In the supply chain, best in class companies have a dock to stock time that is typically around two hours. This is really only achievable by having, ASNs, dock scheduling, a strong vendor compliance manual, and strong warehouse management systems. For many companies, we tend to target a window of approximately four to eight hours for dock to stock times.

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