Finding ways to save money (without sacrificing quality) in material handling operations is a good way to increase profits. You probably have read many resources explaining various ways to save on utility costs. Cost savings solutions do not have to be difficult. Here is an overview of five ways to save money when running a material handling warehouse or when working in a material handling environment.
1. Optimize Your Space and Use it Properly
Warehouse space costs money. When you do not utilize the space efficiently, you in essence are throwing money away. By taking advantage of the right storage and shelving solutions, you can multiply the space you have available. Investing in higher quality shelving provides savings in space requirements while enhancing stock picking efficiency.
A good rule of thumb in the warehouse is keep your materials organized correctly. The time spent by your employees placing items into stock and picking them for shipment is a large portion of your labor costs. Materials in the greatest demand should be kept where they can easily be restocked and pulled for shipment. Items that only move every few months can be stored further from your picking and shipping area.
Use some type of labeling system that helps your workers find products. While long-term workers may have your warehouse memorized, anyone should be able to find materials.
Finally, when you set up your shelving systems, consider the amount of space you need to navigate between rows. If workers are tripping over each other, you are not using your storage space properly. If you use forklifts, you need more room between shelves. If you use hand trucks or carts, you can have narrower aisles.
2. Run the Right Software Systems
No matter what type of materials you are handling, software programs are available to help you track and control your inventory. Accurate information must be available about each material and the quantity in stock. Having to tell clients that an item is out of stock after the order is placed does not put your business in a good light.
Your system should also be set up to alert you to low inventories of fast-moving items. This way you can arrange to order what you need and have it in time to meet your customers’ needs. Your system can also alert you to materials that are not moving quickly. This allows you to make decisions on discontinuing products that are no longer worth keeping in stock.
3. Schedule Maintenance Correctly
Maintaining your material handling equipment is a cost of doing business. However, this is not an area where any shortcuts should be taken. If your equipment breaks down, you lose both time and money. Never ignore equipment that is showing signs of failure.
Plan your maintenance to allow maximum working time. You do not want all of your lift trucks to be down for service at the same time. Create a schedule that provides the right flow for your material handling needs.
4. Use Cross Docking Methods
A cross docking system does not work for all material handling operations. However, even if you cannot use the entire method, you may be able to implement portions of it to help you in cost savings. Cross docking is designed to increase efficiency and save on material handling times and costs.
In the simplest form, this method involves putting receiving on one side of a facility and shipping on the other side. Incoming materials are received, verified, inspected and then sent for sorting. Sorting provides an area for breaking larger material quantities into the sizes required by clients.
From sorting, these materials are immediately sent to the shipping station. While the system may not work your facility, using a method of “in one side and out the other” can be incorporated. The less time spent handling materials, the more money your business saves.
5. Empower Your Employees
Empowering employees means employees who make many decisions for themselves. It also means workers who are responsible for their actions. Your staff should be accountable for the work being performed, and rewarded for any improvements they bring to the workplace. Create goals and encourage your staff to work toward them. Reward employees for coming up with money saving ideas.
When mistakes are made, workers should already know to take the initiative to fix the problem. For example, if an employee is consistently picking the wrong materials for orders, that individual should be required to return the items to the correct stock location. This should motivate workers to make fewer mistakes. However, the wrong materials must be properly returned to keep your inventory correct and avoid out-of-stock issues when the materials are actually in house.
With this in mind, you cannot empower workers or expect them to do their jobs correctly without adequate training. Make sure to have regular training sessions and always provide training when new warehouse methods are introduced. If a worker continues to perform poorly, you will need to address the situation.
When workers are treated well, they are less likely to look for new employment. You do have an investment in your employees’ training. Constant worker turnover is both costly and unnecessary. Empower your staff and make them feel valued. The rewards will speak for themselves.
Jerry Matos, Product Specialist of Cherry’s Industrial Equipment, the leading material handling manufacturer of custom material handling equipment for plant warehouses across the nation.