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Trim down warehouse costs by smart choices

For warehouses the perceived service quality and the biggest source of labor costs come from warehouse personnel. Did you realize that labor costs make up over 56 % of the total costs in the warehouse? Another major slice, over 28 %, is consumed by maintaining the building and the site. Within labour costs picking is the by far the largest single cost factor, adding up to over 40 % of the personnel costs.

Tips for leaner cost structure

To ensure efficient execution of warehouse processes such as receiving, put-away, transfers, stock-taking, picking and loading solutions and technologies best suited for the purpose should be used. In reducing logistics costs warehouse automation plays a key role as well. Simplifying operations by automating manual processes and managing logistics and transportation operations in a timely manner can increase the competitive edge of an organization significantly. Integrating the warehouse management system, ERP and other crucial systems together further boosts efficiency giving transparency throughout the processes. Shift to vertical warehouse for better space utilization and optimization of inventory and order picking routes to minimize the overall throughput time can also bring warehouse capacity to new heights.

Warehouse costs

Warehouse labour costs

Over the years Optiscan has helped their AbakusWMS customers to achieve better work process quality and effectiveness by using modern and easy-to-use technology. According to our customer Kärkkäinen Web Oy, which uses Abakus for improvement of web shop order picking and dispatching from the Kärkkäinen stores, the system has improved the company’s picking process by 30%. Another customer, Verkkokauppa.com, relying on picking orders by Abakus voice in their 12,000 m2 warehouse, says that after the system integration the number of picking errors have gone down by 90%.

Interested to learn how we can help your company to streamline warehouse processes?
Just contact us and we will tell you more.

Sources:
How to Reduce Logistics Costs: 12 Business Logistics Experts Share Their #1 Tip for Cutting Costs
4 simple steps to improve your warehouse
Itewiki-blogi: Digitalisaation ja verkkokaupan nousu muuttavat logistista ympäristöä

 

4.5.2017

 

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