How to Reduce Labor Costs in a Warehouse Setting

October 31, 2017

Author: Definitive Technology Group

In warehousing, logistics, and materials handling, it is not uncommon for labor costs to comprise as much as 50% or more of a company's expenses. With wages constantly rising, the cost of labor continues to grow, and without meaningful gains in productivity per worker, it can be difficult to compete and thrive in the current economic environment.

Many businesses focus on revenue growth to drive success, and that's excellent, but efficiency is where the real gains are made. If your business operates at a 10% profit margin, a cost savings of $10,000 on labor is worth an extra $100,000 in revenue, and it comes without the added challenges of moving all that extra product through your warehouse.

To help you improve your processes and competitiveness, we've created a list of the top 5 ways to reduce labor costs in a warehouse setting. Each of these items is effective on its own, but these techniques can be combined to super-charge your labor force, boost your corporate culture and work environment, and revolutionize productivity at your facility.




Follow the 80/20 Rule to Optimize Your Warehouse Organization


One of the easiest ways to start realizing productivity gains in your warehouse is by optimizing the layout of your facility to help make streamlined processes even faster. For most warehouses, 20% of your total product catalog will comprise up to 80% of your orders - do you know which items you're picking most frequently?

Create a "warehouse within a warehouse" by grouping together your most frequently ordered and delivered items and ensuring that they are kept in a highly accessible and ergonomically friendly location. You can also modify your layout to group together items that are frequently ordered together - toothbrushes with toothpaste, shirts with pants, tables with chairs, etc.

A mobile computer cart is the most important component of enhancing your warehouse layout because it allows you to label, print, and document your inventory from anywhere in your facility without making frequent trips to a stationary workstation. Mobile carts unlock the full potential of an optimally organized warehouse facility.


Implement One-Touch Order Picking with Mobile Computing Carts


One-touch order picking is a process that promotes worker efficiency, drives productivity, and helps to minimize errors. Picked orders should be loaded onto trucks having been touched/processed by only one worker. Workers often collaborate on order picking when orders need to be labeled at a stationary workstation located away from where the order picking takes place.

A worker with a mobile computer cart can pick an order, create a label for it, print the label on the spot, label the order, and pick it into a shipping carton. This process enables a single worker to quickly and accurately pick orders, reducing confusion and errors that inevitably result from attempts to coordinate order picking between several workers.

One-touch order picking also promotes accountability for accurate job performance, making your workers more conscientious and less prone to errors that could result from a lack of focus.


Eliminate Walking Steps to Reduce Fatigue, Distractions, and Errors


Processes that require workers to walk back and forth to a stationary workstation are naturally inefficient - we've already saved companies millions of dollars just by reducing the number of steps it takes to complete a simple task like labeling newly received stock or getting a shipping label onto an outgoing order.

Not only do mobile computer carts help save time on each activity, eliminated walking steps have a big effect on errors in your warehouse. Every worker makes mistakes when they get tired, and employees that walk across the warehouse to a stationary workstation for an entire shift are naturally more prone to errors. In addition, each trip through the warehouse presents an opportunity for distraction - a shared joke or a request for help from a co-worker results in a loss of focus and wasted time.

Workers with mobile computer carts are empowered to accomplish more, stay on task, and avoid errors throughout their workday.


Engage Mobile PCs and Printing in Your Receiving Processes


Warehouse facilities that don't use mobile workstations in their receiving processes are missing out on the best opportunity to minimize errors and enhance productivity. We know that walking back and forth from the receiving dock to a fixed workstation is a major productivity killer.

An employee with a properly outfitted mobile computer cart can take a workstation with them to the receiving area, print inventory labels on the spot, and efficiently put items away where they belong in much less time and with fewer errors, resulting in big productivity gains, and that means fewer labor costs.

A well-organized warehouse further improves receiving - your employees will be able to more efficiently put away your most commonly received items in record time.


Leverage Mobile Power Supplies to Maximize Equipment Up-time


A commonly anticipated drawback of mobile computer carts is a limited power supply - how can your warehouse get the best use out of a mobile workstation with a limited power supply?

To fully unlock the labor savings associated with mobile computer carts, a lightweight, modular power supply system is needed. Mobile power supply systems ensure that mobile computer carts are always ready to go when your employees need them, and a single charge offers hours of up-time for the computing, printing, and labeling equipment that you need to get the job done.

Mobile batteries mean you'll never have to interrupt your workflow to charge a workstation.




Reducing labor costs in a warehouse really comes down to figuring out how to do more with less - getting the maximum amount of productivity from your existing employees, and investing in the tools and technologies that make their lives easier, so they can do more for you in each hour that they are at work.

While there are many ways to get more productivity through management of people, business process improvement is the best way to elevate the efficiency of your daily processes, and that translates into huge labor cost savings.

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