How to Make Your Warehouse More Profitable


6 Tips for Making Your Warehouse Profitable

Warehouses and distribution centers can lose a huge amount of time and therefore money due to inefficient working practices. Often warehouse managers do not review processes that have been in place for years, despite the huge advancements in warehouse technology in recent years. However, with some detailed analysis of a warehouse’s utilization of space, labor, and automation, there is usually great potential for improvement.

When you have discovered where the inefficiencies lie in your warehouse, you can start to take action to cut wastage and improve productivity. This guide highlights some possible ways to make your warehouse business more profitable.

Evaluate your workforce’s capacity

In too many cases, warehouse managers let their workforce dictate how much work is completed in a day. If you present your workers with a small amount of work, they may take more time than is necessary to complete it. If you overestimate what your workers can achieve, they may become demoralized, and you will miss your projected targets. Take a closer look at your workforce and ensure the workload is well matched to their abilities. You may be able to increase productivity and remove the need to pay over time by investing in new equipment.

Reorganize your space

The way that the warehouse is organized will have a direct impact on its efficiency and the way that your workers operate. It should be easy and quick for workers to move, warehouse vehicles, and stock. The available space should be maximized by storing products on high shelves with a clear organization strategy and forklifts to ensure all stock is accessible.

Eliminate slow-moving stock

You should become familiar with the concept of a Lean warehouse which is the principle that any activities or processes that are not adding value should be eliminated. Following this principle, if you are assigning valuable storage space to stock that is not selling or is selling slowly, you should consider getting rid of it. Removing stock that is not profitable frees up space for stock that does sell and reduces the amount of stock that needs to be liquidated.

Embrace automation and technology

If your warehouse relies on repetitive manual processes, it may be time to embrace technology that will automate and streamline your operation. There are now lots of machines and computers that can either perform tasks or make tasks significantly easier and quicker. This will make your warehouse workers more productive, you will fulfill orders more quickly, and you might even be able to reduce the number of hours that you need to pay workers for.

Keep your processes flexible

While it is sensible to bring in technology and automated processes, take care not to adopt changes that can not be adapted or changed as your business expands. If you invest too heavily in one system only to find that it cannot cope with increased demand, you may find yourself facing the need to invest in new equipment all over again. Look for flexibility in any productivity strategy or equipment that you adopt so you can adapt as needed.