Reducing warehouse costs? Meet the challenge with your racking

• • Warehouse costs to consider
  • How to reduce warehouse costs
  • Utilise the space – increase storage capacity
  • Streamline processes – reduce labour costs
  • Automation – speed up order timescales
  • Avoid moving costs – reduce overheads
  • Create a multi-functional warehouse – maximise budget
  • Training, inspection and maintenance – deliver on your ROI
  • Why work with Teepee Warehouse Solutions – avoid unwanted costs

In any business, you have to balance the books. You need enough revenue to pay your overheads, including warehouse costs, employ staff, and invest back into the company. Somewhere along the line you also want to make a profit. Yet, as material and living costs increase, the financial world has tightened its proverbial belt, and other businesses have followed suit.

There’s no ignoring the fact that logistics and warehousing are expensive industries to run. Making your warehouse profitable has recently become increasingly harder, yet despite this, there are ways for owners to reduce costs. We look at the seven key areas to address.

Warehouse costs to consider

Before we examine ways to save, let’s first determine the warehouses costs associated with your operations.

First, the rent. In the UK, this typically costs around £5 to £9 per sqm. This square footage is an essential outlay and to maximise value you need to use the space wisely. That is where the next important cost comes into play – equipment. Depending on your operations, this list can be long and include everything from pallet racking and shelving to store the stock, right through to forklift trucks and conveyors for moving pallets around the warehouse. You also have to consider other warehouse costs such as administrative and transport fees along with energy and security costs. Finally, the cost of paying your staff is an essential element in most logistics’ companies.

How to reduce warehouse costs

It’s almost impossible to avoid warehouse costs associated with your facility but there are ways to maximise your Return On Investment (ROI). By analysing what you have in place and how you can improve warehouse operations it’s possible to reduce ongoing costs and make significant long-term savings.

Utilise the space – increase storage capacity

One of the biggest warehouse costs you will have to factor in when running a warehouse is the cost of rent. Therefore, it makes sense to maximise every last metre of that space and make the warehouse work hard for you. The sums are obvious, enhance the floor space and you can hold more stock. The more produce available the bigger the opportunities to sell more orders. More orders equal greater profits.

Yet achieving this isn’t simply a case of stuffing in as much racking as possible. You need an intuitive solution designed to optimise that space. Maximising the available space is all about filling it wisely and may require a mix of storage equipment options. Apart from  adjustable pallet racking, several complimentary solutions can maximise both floor and vertical space. For example, shelving can efficiently utilise small spaces while mobile shelving can remove the need for static aisles and increase capacity using a smaller footprint.

Streamline processes – reduce labour costs

Of course, filling that space won’t maximise your costs if you haven’t considered how to streamline processes to increase efficiencies. Stock arriving at the warehouse door should move seamlessly to its storage location. Then, when needed, it must be easy to locate and move swiftly to the packing zone. Finally, its last journey is when it heads out the other side destined for delivery.

Failing to implement a smooth journey for your orders will increase warehouse costs over  time. If staff can’t find stock because the labelling or storage solution is inefficient then you’re reducing the number of orders you can fulfil. Alternatively, if pallets are held up at sticking points within the warehouse it not only reduces optimal picking timescales but can also result in stock getting lost or damaged. These problems can be overcome with a clever racking design that accommodates distinct zones to help staff and machinery perform their designated tasks and reduce time spent getting from point A to B.

Automation – speed up order timescales

The presence of automation and robotics in the warehouse environment has grown significantly in recent years and it’s not hard to see why. These methods can provide significant benefits including speeding up processes and speeding up the movement of stock. Yet, there are other, perhaps unrecognised, benefits. Automation can increase safety levels, by moving stock away from employees and removing repetitive tasks to improve employee retention.

Automative processes and digitisation do not necessarily require complicated systems built at scale and even small steps can make a big difference to your output. For example, by updating your Warehouse Management System for one better suited to your business it should make stock easier to store and locate. Even adding labelling systems on your racking can make a big difference. However, to benefit from the advantages your automation system delivers it must work in cohesion with your racking.

Avoid moving costs – reduce overheads

We’ve talked about how you can optimise the warehouse environment to enhance efficiencies and increase order processing, yet have you considered the impact of growth? If your warehouse is running as a tight ship it should lead to an increase in sales but with this comes the requirement for additional storage space. Moving location to bigger premises has a hefty price tag. First, there will be the increase in rental costs, then you need to consider moving fees and potentially purchasing racking for your new space. On top of this, you could face a temporary reduction in order processing while you move location. It all adds up.

Instead, look at how you can control warehouse costs by managing the timescale. More often than not, it’s possible to delay moving by enhancing your current warehouse setup. Hopefully, you previously worked with an experienced racking supplier who has already designed an intelligent and flexible racking system that is simple to adapt. If not, there are still options. There may be the possibility of extending your racking upwards to utilise the roof space of your warehouse. There may be the option to adjust your equipment into Very Narrow Aisle (VNA) racking which enables you to reduce aisle widths to create more runs of racking within the same footprint.

Create a multi-functional warehouse – maximise your budget

In most cases, the main function of a warehouse is to store stock but that doesn’t mean it can’t pivot into a more multifunctional space. Adjusting your pallet racking into a multi-tower with multiple floors enables you to create layers of storage space while also creating more picking and packing stations. You could consider mezzanine flooring which adds floors to your warehouse floor that you can turn office space, additional storage density or zones for different retail functions such as online or high-street shops.

Another option is to divide your warehouse space into smaller, functional zones. Installing factory partitioning will separate and segment the area to accommodate different production stages in manufacturing units, organise storage areas for raw materials or divide the floor into specific workstations, helping to streamline operations and reduce warehouse costs. Alternatively, systems like clean room partitions are constructed using high-quality materials to minimise contamination making them ideal for food processing or pharmaceutical manufacturing areas.

Training, inspection and maintenance – deliver on your ROI

While designing the layout of your warehouse floor or manufacturing unit can provide multiple cost savings, you will only deliver true ROI if you can maximise the lifetime of your equipment. This means correct use and maintenance of the racking.

To achieve this, you need to cover three key areas:

• Training

Training is essential for two key reasons; employee safety and minimising damage. If you train your team on working safely around racking it can reduce damage to both stock and the racking. Training will also help your employees identify damage on racking. If you spot the damage early on you can conduct the repairs before they turn into bigger, and more expensive, issues.

• Inspection

Fail to meet your inspection requirements and you fail your racking. As the HSE states in HSG76 Warehousing and Storage – A Guide to Health & Safety ‘Any damage to racking will reduce its maximum load capacity. The greater the damage the less its strength will be.’ It’s for this reason that SEMA and the HSE recommend adopting a three-tiered inspection process. Every day, your employees should immediately report if they find damage. At least once a week, a trained team member should conduct a visual inspection. Finally, at least once a year a trained professional should undertake an in-depth Expert inspection.

• Maintenance
  

  If your inspection does identify damage on your racking, then you need to get it fixed. However, choose your supplier with care. SEMA, a leading voice on storage equipment safety, has strict guidelines on permissible work allowed and your supplier may not be working to their recommendations. You should also be aware that any remedial or alteration work undertaken by a racking company not approved by the manufacturer could invalidate the original racking warranty and end up with unnecessary costs in the long term.

Work with Teepee Warehouse Solutions – avoid unwanted costs

Now you know how to reduce overheads in your warehouse, how do you implement these actions? If you work with Teepee Warehouse Solutions, you can be safe in the knowledge that, as a SEMA Member – Advanced, we have undergone a rigorous independent audit process to prove we meet industry standards on quality and safety. This SEMA badge is proof to warehouse owners that we can support you throughout the safe design, supply, installation and maintenance.

With over 30 years of experience within the industry, we can help you find the perfect solution that will improve the productivity and efficiency of your warehouse. We offer full turnkey solutions supplying racking, shelving, mezzanine floor and factory partitioning systems. We can also conduct your Expert racking inspection and provide training for your team at your warehouse.

If you’d like expert advice on how to maximise your business, why not get in touch today for a free, no-obligation quote. Plus, follow us on LinkedIn for exclusive tips and strategies.