Reduce Labour Costs In The Warehouse

Did you know a WMS could help reduce labour costs by up to 30% in your warehouse?

Across the supply chain and in the warehouse, there is a labour shortage.  Labour is one of the single most significant expenses in warehouse operations. By investing some time and effort, you can reduce labour costs in the warehouse.  First, conducting a comprehensive inspection and evaluation of the warehouse facility, processes, safety issues and staffing is critical.  It is essential that this be done with “fresh eyes” and an open mind geared to be willing to make changes.

Secondly, time spent in planning and executing a program that has been optimised to attract, hire, train and retain a workforce that has a solid array of soft skills and is self-motivated and focused on worker performance can make a positive impact on reducing labour costs.

Finally, relying on current technologies, such as a cloud WMS, to enhance and extend fast, accurate workforce performance can help to maximise workforce productivity and provide a competitive advantage for your company.

Labour costs are likely the largest line item on your company balance sheet. Therefore, a successful cost reduction strategy must adequately balance resourcing and cost controls. Cutting your warehouse labour costs can improve the organisation’s overall efficiency and increase earnings. The key is to devise ways that produce an impressive return on investment instead of simply reducing staff. Warehouses generally claim a large amount of real estate on the premises. Therefore, ensuring you reduce labour costs in your warehouse, could make a big difference in overall expenses and to your bottom line.

Moving more product through the warehouse with the same amount of staff or not having to hire additional temporary staff during peak times are key for reducing labour costs.  Even shipping the same volume of stock, but needing fewer people to do it is a cost saving – resulting in better efficiency & profits.

By introducing a cloud based Warehouse Management System (WMS) in conjunction with wireless handhelds, will allow to realise numerous benefits – more stock being shipped with less people, less time and less mistakes.

So how does a WMS hold the key to labour efficiency?

Labour can be divided into three categories: direct (receiving, put-away, picking, replenishment), indirect (supervision, training, inventory control) and administrative (inventory management, order planning, customer service, data entry). Those three groups are all tied together and the right WMS will reduce labour costs at every tier, resulting in substantial cost savings throughout the operation.

See labour productivity improvements ranging from 20 to 30%.

Much of these labour savings come from a smarter picking process. The No. 1 labour expense is time spent traveling to gather products. The WMS software will help workers on the floor (“direct”) by assigning them to specific tasks in a specific sequence to maximise efficiency. The system will know where all your inventory is located and will assign picking based on proximity to the item, maximising the efficiency of receivers, pickers and others. No time is wasted planning these activities as the intuitive software works out the best sequence for you.

The right  picking strategies that will increase the hourly and daily picking rate of every person on the floor will result in a saving of a minute or two every few hours that will add up over months and years, making this is an area of significant value by installing a warehouse management system.

A warehouse management system also eliminates the paper trails that are not only a constant source of mistakes but also eat up working hours. When all this information is stored electronically, you will eliminate endless piles of paper to wade through or endless pages of paper documents to fill out – resulting in less work for administrators, ultimately lowering operational expenses.

Less paperwork and handwritten forms will also improve labour productivity as well as reduce labour costs by freeing operators to focus on completing actions rather than handling/locating paperwork. However, do not be misled into believing a paperless environment is a completely hands free environment. If the data collection option chosen is radio frequency (RF) or batch hand held units, operators will still be required to handle and manage the hand-held units. Hand held data collection units are, however, a far better alternative than paper intensive systems in many operations. Moving towards Voice WMS is also an alternative that can result in even further cost savings and give that hands-free environment.

Are peak seasons such as Easter, Black Friday, Christmas, January sales a real headache for you?

Predicting how many workers you need on different days of the week or at different times of the year is another hurdle a warehouse management system will help you with. The system will track order volumes, inventory levels and other information allowing a company to effectively plan their staffing levels and eliminate over-staffing or under-staffing that is difficult to predict without a WMS.

Once you start to realise the benefits of the WMS, managers will be able to spend time more proactively managing the day-to-day operations rather than firefighting problems such as allocating resources to expedite rush orders due to errors in inventory availability or lost products.

Additionally, stock control staff can implement and manage cycle counting programs that will result in an overall reduction in the need for an annual physical inventory – further cost & time savings.

From a training and learning curve perspective, by automating processes using an intuitive and simple to use cloud WMS, new employees will have less to learn and can become efficient more quickly by simply following instructions provided by the WMS.

Although lower labour costs is one of the biggest reasons to invest in warehouse technology, it’s not the only reason. A WMS will also enable you to have better inventory management – resulting in giving your customers an excellent service and of course a more efficient organisation of the warehouse.

A WMS can drastically reduce money spent on your workforce while simultaneously improving productivity. These factors can have a major impact on the financial health of a company – resulting in improved efficiency & increased profits.

About us:

Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.

Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The Clarus WMS platform will cost effectively scale with your business based on demand.

Clarus WMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.