warehouse team checking inventory

Factors to Consider in Warehouse Cost Saving

March 12, 2020

What are the factors to consider in warehouse cost saving?

  1. Effective communication
  2. Maximize storage
  3. Monitor inventory
  4. Retain good performing staff
  5. Invest in cross-docking


There are many factors to consider in order for your operations to run smoothly. You can make various investments on highly efficient equipment or an exemplary pool of manual labor. One of the factors you should definitely consider is practicing warehouse cost-saving techniques.

Generally, a warehouse is responsible for storing your goods before they’re transported to their final points of distribution. As such, retaining the quality of the items before they’re delivered to your customer is an essential undertaking.

Continue reading to learn more about some practices you can adopt to help you become more financially efficient in the cost of your warehouse operations.


Effective communication

As with any type of industrial endeavor, effective communication is highly important in keeping the cost of your warehouse operations down. A lack of proper communication can affect your operations at every level and may, unfortunately, produce undesirable outcomes for your business. One mistake includes inputting inaccurate information regarding the inventory, which could lead to a potential loss of great resources.

If you’re constantly communicating with your employees and managers about your goals and your desired outcomes, you’re keeping them abreast of daily targets as well as improving their overall productivity. For example, if you’re an operations manager, one of your responsibilities is ensuring the product count in the inventory is accurate. One way of achieving this is by constantly asking for updates from the employees handling warehouse operations. By taking initiative in establishing a consistent stream of communication, you’re providing a great example to your employees of a cost-efficient action that they should all emulate in their respective tasks.


Maximize storage

man checking warehouse inventory

Another important factor to consider in warehouse operations is the physical environment. The warehouse, after all, can define your operations’ level of productivity as well as the efficiency they can generate.

While having unreasonably large storage space can cost you more in your financial expenses, having a small storage space can also become unbeneficial. You should aim for just the adequate size of your warehouse if you want to be more financially wise.

One best practice you can adopt in order to achieve this is to plan out the types of equipment you’ll be utilizing, and also the size of the products you’ll be storing in the warehouse.

Knowing the dimensions of your equipment can also help you decide the measurements of your warehouse’s aisles. These areas experience the highest level of foot and equipment traffic, so you should ensure they’re spacious enough for machinery to comfortably pass through.


Monitor Inventory

Your inventory is definitely one of the most essential aspects of your business. It is a detailed list of the products you’re storing in your warehouse, containing accurate information about their final place of delivery. It won’t be hard to imagine that one of the reasons for financial losses in warehouses is the presence of unreliable information regarding inventory count.

Another cost-saving option for your warehouse is to meticulously monitor your inventory. There may be possible cases of theft occurring in this type of space, due to the nature of your products. One of the best ways you can avoid this situation is by investing in a comprehensive security system that can monitor all points of entry and exit in the warehouse.

You can also introduce a digitized keycard system so you will be able to limit warehouse access to only the key people in your staff.


Retain Good-Performing Staff

woman scanning package

One of the most financially exhaustive practices is training warehouse staff. Apart from handling heavy machinery like forklifts, for example, they’re also responsible for keeping track of the inventory, as well as managing responsibilities in maintaining the utilities in the warehouse space itself.

Oftentimes, there are cases of exemplary staff members resigning due to various reasons. It won’t be farfetched to imagine that some of them may feel like their efforts largely go unnoticed by management, leading them to quit. If you’re faced with this kind of situation, you would need to once again go back to the drawing board to hire new employees. This is time-consuming and will cost your business more in the long run.

Avoiding this situation is easy if you adopt practices that incentivize your best-performing employees. This is not only cost-saving, but you’re also letting the employees know that you value their efforts and that they’re essential to your overall warehouse operations.


Invest in Cross-Docking

Though warehouses are key storage space systems for your products, another way you can reduce your warehouse costs is by investing in cross-docking practices. Simply put, this refers to the process of using a terminal by which the products are directly and immediately transported to outbound vehicles destined for the products’ final points of delivery.

Investing in cross-docking reduces the time and resources which are expended on inventory management, storage, labor costs, and the like.


Key Takeaway

In order for you to run your business delivery service in the most efficient way possible, it would do you well to invest in different warehouse cost-saving practices. Ranging from simple acts, like improving communication among your staff, from more complex tasks, like investing in a cross-docking system, all of these practices will offer your business with more cost-efficient outcomes.

The guide above has hopefully offered you just some of the factors you should consider to reduce the cost of your operations.