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Reduce Warehouse Costs and Increase Profits with these 16 Tips

Finding ways to tweak your processes in order to reduce your costs will always help your bottom line. Taking advantage of new technology has become easier than ever. What steps can you take to save money?

Reduce Warehouse Costs with these Key Steps


  1. Eliminate unnecessary steps.

    Every time an employee touches an item it decreases your bottom line. A streamlined process saves you money. A good warehouse management system will help you cut down on unneeded touches. Look at your processes with a critical eye to spot where you may be duplicating or retracing steps.

  2. Reduce inventory with cross-docking.

    Cross-docking bypasses the put away process and sends the product almost directly to outgoing carriers. It eliminates steps and doesn’t take unnecessary floor space to store the product.

  3. Real time supply chain tracking.

    Do you know where your inventory Is located? How much of each item do you have on hand? Do you have the same item in more than one location? Your WMS should help you locate each item in your warehouse in real time.

  4. RF tracking and/or bar coding.

    These help you track your inventory from door to door and ensures efficient travel. You can track orders and verify their accuracy. Real time visibility will speed processes and eliminate the need for paperwork.

  5. Use the right sized storage configuration.

    Inefficient use of space can increase costs and waste money on additional warehouse space that you don’t need. Use all available vertical and horizontal space. Your WMS can help you efficiently store your inventory that will reduce the time spent and increase the accuracy of your picking process. In order for it to work properly, you need to have accurate information about size and shape of your boxes and racks.

    Ready to Cut Costs and Increase Profitability?

    Discover how SphereWMS streamlines warehouse operations to reduce costs significantly. Optimize processes like cross-docking and real-time inventory management, enhancing efficiency and boosting your bottom line.

    Discover How
  6. Have enough inventory available to maximize pickers productivity.

    Your pickers waste time and money walking around, looking for inventory or waiting for restocking. Develop appropriate pick locations. Keep in mind product velocity and cube size when assigning picking slots. Store at least a week’s worth of inventory paying special attention to fast movers.

  7. Manage Returns.

    Reverse logistics can be a big money saver for managing returns. You WMS should enable you to receive, inspect, and repackage returns before sending them back out to the customer. This also results in less customer complaints

  8. Keep your warehouse clean and organized.

    Organization and cleanliness means a lot to your overall productivity. Keep workplaces free of debris and dispose of outdated items or to store them in an out of the way location. That makes picking easier and more efficient and increases accuracy.

  9. Controlling inbound and outbound freight.

    Are your carriers delivering on time? Do they adhere to your agreements? You may be able to reduce your costs by negotiating and enforcing your contracts.

  10. Continuous improvement.

    Create a general plan and develop a matrix to measure success. Each employee should know their performance goals and the overall goals of the company and should be expected to achieve those goals. Evaluate every process for improvement. This process should be repeated regularly.

  11. Manage your workforce.

    Make sure every employee is trained well and cross train so that work doesn’t stop because of sick days or doctor appointments. Focus on ways to retain employees. Flex time and incentives help to keep morale high. Bring in temporary help for busy times and schedule workers so they get a full weeks worth of hours.

  12. Controlling inbound and outbound freight.

    Let carriers bid knowing your overall needs, incoming and outgoing, so they can bid accordingly.

  13. Use the right equipment for the job.

    Using the right sized forklift will help your material handlers increase their efficiency and cut down on problems. Your supervisors should have the right communication equipment. The right tools make any job faster and easier

  14. Improve morale among employees.

    It doesn’t take much to improve morale and conversely, it doesn’t take much to destroy morale either. Little improvements like providing employees with incentives for performance or allowing employees to make suggestions and give input make a big difference. Employees who are happy in their job are more likely to stay on the job, reducing hiring and training costs.

  15. Make error reduction a priority.

    Keep supervisors on the floor and task them with optimizing the workflow. Your supervisors are your front line and can spot errors and correct them before they become habit.

  16. What are your facility management costs?

    By looking at things like fees or penalties, utilities, and maintenance you may be able to significantly reduce expenses.


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