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Warehouse Cost Reduction: Maximising Efficiency

Rising warehouse expenses – How to reduce costs and increase efficiency

Supply chains are facing multiple challenges and complexities in the current economic environment. The inflation is impacting energy costs, e-commerce customers expect faster shipping, warehouse space is under pressure and labour is in short supply. Keeping up with current trends while trying to achieve cost savings is becoming more difficult every day. 

If managing day-to-day operations is taking up all your time and energy, when do you find time to review your operations? The main questions we get asked are:

How do I…

  • reduce my operating costs?
  • improve efficiency in the warehouse?
  • automate routine processes?

The answers may lie somewhere between making some simple workflow changes to redesigning your warehouse layout, automating picking and packing processes, or implementing a technology solution. Where can you reduce your energy usage?    

Tips on optimising warehouse operations

The challenges a business is facing can come from changes to customer requirements, limited storage space, ineffective inventory management, low productivity, and/or outdated technologies.

Here are some practical steps that can be used to improve warehouse utilisation and save costs. 

 

  • Document the current warehouse space and its dimensions to establish if it is fit-for-purpose.
  • Ensure that there are clearly defined receiving, storage, packing and dispatch locations.
  • Review the current workflow and identify and solve the bottlenecks.
  • Use a storage and racking solution that best suits the inventory.
  • Improve operational efficiency. Locate fast-moving items in accessible locations, save labour time spent searching and picking, and prevent packing errors.
  • Reduce excess inventory. Revisit inventory levels and order processes for slow-moving stock.

Consider outsourcing all or part of the warehousing needs. The warehousing costs depend on many factors, it may be more cost-effective to use a third-party logistics (3PL) provider.

The latest trends in warehousing

Many important trends that are driving warehouse management efficiency involve the use of technology.  

1.

Equipment automation and robotics 

The development of automated and electric vehicles and their application in the warehouse will continue. Mobile technology tools that use IoT and AI techniques can improve inventory tracking and automate picking and packing processes. 

2.

Warehouse Management Systems (WMS)

WMS solutions typically provide similar core functionality but products vary greatly in their scope, ease of implementation, and the ability of the solution to match a particular industry or operation. Choosing the right WMS for you will reduce your operating expenses.

3.

What do warehouse consultants do? 

Data visibility means transparency, i.e., being able to track and trace shipments throughout the warehouse from receipt to delivery. Error-prone manual methods limit immediate access to reliable fresh data.

4.

Sustainability: the environment and consumer pressures

Companies are under pressure to reduce their environmental footprint inside and outside their facilities. Issues include carbon emissions, eliminating waste, reusable packaging and conserving water and energy. 

What do warehouse consultants do?

A supply chain consultancy that specialises in warehouse design and layout  provides a range of services based on applying industry best practices, including some or all of these:

1. 

Distribution centre planning and optimisation

Any major project starts with a strategic review of operations. This is essential when you need to:  

  • design and commission a new facility
  • expand or re-design an existing facility
  • enter a new market or sales channel
  • consolidate operations due to a merger or acquisition
  • outsource one or more operations

Professional warehouse consultants can identify sustainable ways of improving supply chain performance, boosting productivity, and driving savings through re-engineering processes.

2.

Warehouse design and layout

In an existing facility there are inevitably some inefficient processes. It may be that the technology is outdated, the utilisation of space is poor, or routine tasks take too long. An experienced warehouse consultant focuses on improving workflow and processes and automating or eliminating routine tasks. These can include:

  • optimising warehouse layout for better space utilisation
  • improving inventory management and reducing cycle times
  • the selection and implementation of a WMS solution
  • improving materials handling through automated tools

3. 

Selecting and implementing the right technology

Advances in cloud-based solutions have made technology a powerful enabler in the warehouse. But how do you choose the best solution for your situation? Our consultants have access to the latest technologies and achieve success by applying industry best practices to all functions from receiving goods to picking, packing, and dispatching.

4.

Support Services

Our warehouse consultants can assist with:

  • Sourcing of goods and services including managing tenders and RFPs
  • Renegotiation of supplier contracts for goods and services
  • Data collection and analysis to aid decision making
  • Allocation of resources and staff recruitment and training

Choosing the right warehouse consultants

Consultants that specialise in optimising distribution centre and warehouse operations have problem-solving abilities and good communication skills as well as technical knowledge.  They are up-to-date with the latest trends and bring a fresh perspective. They work with you to answer questions like these:

  • What can we do to improve productivity in our warehouse?
  • We are struggling for space, how do we optimise our layout?
  • How do we select the best storage and handling equipment?
  • What is the best WMS for us?

A professional consultancy will show broad expertise across industry sectors and project types. SCCG consultants have wide expertise and are independent of third-party vendors of materials handling equipment and of software solutions.


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Do you have a question about one of our services or are you working on a supply chain project and need assistance? Get in touch.

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