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.

When taking the keys to a new warehouse there is a lot of potential that can be unlocked in that space. The natural reaction is to fill it with as much racking as possible to maximise the amount of stock it can hold. But, before diving in, it might be worth considering whether warehouse optimisation strategies could help unlock additional benefits and improve your warehouse

If you need a better racking system or setting up a new warehouse and are not sure where to start, don’t worry—you’re not alone. We have some tips to help improve your space.

Why is warehouse optimisation crucial for your business?

Before we run through how to optimise your warehouse, we’ll first look at why the racking in your warehouse matters so much.

You can’t escape the fact that the modern warehouse is an expensive outlay. Apart from the rental fees, you also need to purchase racking, machinery for picking stock and, increasingly in today’s environment, automation to increase productivity. The costs add up.

To reduce overheads, you need to install bespoke racking solutions which drive down operational costs while boosting warehouse optimisation, efficiency and employee productivity. Get the correct system in place and you can streamline the throughput of products, from the moment they arrive at the warehouse door through to when the order leaves your facility. Make sense of your stock’s journey and not only will it reduce lost working hours, but it will result in enhanced staff satisfaction – after all who wants to spend all their time trying to locate missing items? This naturally results in a second benefit – customer satisfaction. The last thing any warehouse business needs is a customer who hasn’t received their order in time.

These are the five steps you should consider.

Step 1: Assess Your Space

Before making any decisions on your racking, assess what you’re working with. Although warehouse space is limited by its width and height, there are still effective ways to maximise it. Address how much and what type of stock you hold. You need racking or shelving structures which accommodate the product – whether that’s boxes or pallets – and its weight. Don’t forget to consider what happens when your warehouse business grows. Should you consider racking that adapts to varying stock levels or can be extended for more storage?

Accessibility is a often overlooked aspect of racking design, yet it is crucial for ensuring orders move seamlessly through the warehouse. To optimise the picking and packing process, consider the necessary equipment and how employees will interact during these tasks. Obstacles that prevent access to items or a lack of attention to safe working zones can significantly increase the risk of serious accidents.

Step 2: Optimise The Warehouse Layout

Once you have evaluated the space and understood your stock profiles, you need to create the best racking layout for warehouse optimisation.

Start by mapping out the warehouse and understand how products will move through the space. Consider each stage; where does it arrive, where will you store the stock, do you need a designated zone for picking and packing and how will it leave the warehouse? Do you need to create specific zones for tasks, for example, an area for packing, shipping or receiving items? Now work out where each of the zoned areas will sit to ensure they allow the stock to seamlessly flow from one zone to another. This will help you to spot areas where orders could get bottlenecked during the process.

During the process, you should also look at how you can reduce wasted areas the and utilise them for other tasks or storage areas. And of course, don’t forget to include areas you can’t change such as doors, corridors or office space etc.

Step 3: Implement Smart Storage Solutions

The backbone of most warehouses is the storage equipment. It’s an almost obvious choice to go with standard pallet racking, but will that maximise the space? Racking is well-suited for larger and heavier items, with deeper shelves that are ideal for storing pallets accessed by forklifts or automated systems. In contrast, shelving is a practical option for lighter and smaller items typically picked by hand. Its more compact structure makes it perfect for areas with limited space.

If you’re going for racking, have you got the best system? There are multiple options and design configurations available which help improve the efficiency of the warehouse.

Racking Examples: 

If you want to maximise the available space you have a few options to choose from. You could go upwards with a Very Narrow Aisle (VNA) racking structure which is built higher while moving the bays closer together to reduce the aisle widths and add more storage capacity.

Alternatively, you can choose a multi-tier structure which creates multiple hand-loaded picking zones throughout the racking. Walkways are then fitted between the shelves which are accessed by a staircase.

If other options don’t work, mobile shelving eliminates fixed aisles by placing storage on tracks. Units stay compact and roll open as needed to access the correct bay.

Step 4: Warehouse Automation

Technology advancements are taking hold in the warehouse environment. To stay competitive, integrate technology into your warehouse and racking systems.

Now is the time to research the market and find out which system works best for you. While Warehouse Management Software (WMS) systems are not new, they have certainly evolved over the last few years. WMS are essential for providing real-time analytics and insights into the movement of your items and managing your supply chain fulfilment

However, when combined with AI, it can improve the process even further. This will increase the efficiency of your warehouse by avoiding the chance of stockouts and enabling quick response times. Get the right racking in place to support your WMS system and it can transform your warehouse.

Step 5: Employee Engagement

Finally, none of these changes will stick unless your team is on the same page. Take time to train your staff on the new racking system and safety procedures. Racking training may seem easy to dismiss, but it offers valuable benefits. It enhances productivity and efficiency, reduces costly repairs from avoidable damage, and, most importantly, ensures your team’s safety.

That is why we run our Rack Inspection Training which equips your employees with the skills and knowledge they need to work safely and handle products in areas where racking is present. It also provides them with the tools they need to recognise damage on racking.

The course will also help you to meet your Health and Safety and industry requirements. As the owner or warehouse manager, HSE and SEMA expect you to perform regular inspections to check the racking is loaded and used correctly and report if damage is present. Our Rack Inspection Training course will train a member of your team to perform this important ‘weekly’ inspection.

Finding a Racking Supplier You Can Trust

If you search for a racking supplier online you’ll be inundated with options. For true warehouse optimisation, choose a supplier who can deliver a storage system that maximises space and efficiency, such as a SEMA Approved Member.

For over 50 years SEMA has led the way in developing best practices and standards within the storage equipment industry. As a SEMA Approved Member – Advanced, Teepee undergoes an independent assessment every three years to demonstrate our commitment. This rigorous process ensures our compliance with over 40 regulations, industry standards, Codes of Practice, and legislative requirements, allowing us to maintain our membership and credentials.

Contact Teepee Today

At Teepee Warehouse Solutions, we specialise in planning and installing storage systems for various industries, from retail stockrooms to warehouses and beyond. To ensure every customer receives the best possible storage system for their needs and requirements, we offer a site survey. This includes an expert visiting your premises to assess the space and recommend the best storage solution for your business.

We also ensure your equipment stays safe and functional. To help you meet warehouse requirements, our approved inspectors can also conduct expert pallet racking inspections.

Ready to take your warehouse to the next level? Contact us today to find out how we can help you choose the best racking solution for your business. Let’s optimise your space for maximum productivity!