How to Run a Successful Warehouse Business That's Efficient and Profitable
Along with other forms of logistics, warehouses are a key component of our global supply chains. Manufacturers, wholesalers, and retailers all rely on warehouses to store their goods before reaching their customers. And like all other businesses, warehouses need to be operated efficiently in order to be successful and profitable.
Warehouses rely on three main resources in order to run efficiently: space, equipment, and personnel. If they falter in any of these areas, the business may incur costs or suffer losses. At the same time, successful warehouses are also run strategically, enabling them to remain competitive and grow. According to experts, there are certain best practices to follow in order to be successful and profitable.
1. Incorporate a flexible design space to maximize efficiency.
As you grow your warehouse business, your space will be your greatest asset. Many companies have incorporated flexible designs in order to maximize efficiency and ensure a frictionless workflow. To best utilize your building, make sure to study it from the perspective of space, taking care to track efficiency and the comfort of the employees working there
- Keep movement and flow a priority. The most effective flow, as reported by the Logistics Bureau, is a one-way flow through your warehouse, as it ensures an efficient process and maximizes profits. A common practice of warehouse operations is to find ways to minimize touches to the goods that are handled daily. Eliminating superfluous steps in between can streamline the process from the beginning when a shipment enters your warehouse until the end when it's shipped out.
- Maintain flexibility as your business evolves. Privacy will be important to those storing their items in your warehouse - and so will accessibility. Space partitions that can be rearranged as your business evolves offer flexibility while still catering to your customers. Scalability to your design will be of increasing importance as the number of customers you have fluctuates.
- Allow space to accommodate products. Be sure to think through the quantities of products that are coming and going through your warehouse. If they’re being transported by trucks, do both large and small scale vehicles have room to maneuver by the loading dock? If the customers in your warehouse are providing products to niche audiences, they may have specific needs regarding the storage of their goods, such as temperature-controlled areas or stored in an elevated space.
- Run an audit to measure efficiency. How long does it take for processes in your supply chain to be completed? Efficiently running warehouses also prioritize free movement over storage capacity. Research has shown that warehouses that properly define, document, review and optimize their processes at least once a year are more efficient than their counterparts - making annual operational audits a profitable activity.
2. Enhance warehouse functionality with equipment and amenities.
After identifying the kind of items you will be storing, consider if the warehouse will require any additional functionality to accommodate these items. Warehouses with additions such as loading docks, forklift-charging areas, manufacturing or packaging operations, and staff facilities can attract more tenants and charge higher prices.
- Provide ample parking spaces. Adding parking spaces near your facility is of great benefit to you and your employees, especially if there is limited street parking. Accessibility is often confined to being a perk, but it doesn’t have to be.
- Include loading docks for large deliveries. To facilitate the movement of goods in and out of your warehouse, it is a good idea to build a loading dock in your warehouse. While a loading dock is thought only useful during a long-haul delivery, this is not always the case. They can come in handy for the efficient delivery of larger items within cities.
- Offer temperature control units to protect goods. Depending on the types of goods you are storing, it can be helpful to partition a section of your warehouse and add temperature control would expand the range of products you can store in your facility.
- Install cost-effective lighting for additional safety. Effective lighting leads to better working environments, reducing the number of accidents and creating a positive impact on the productivity of employees. Choose LED or HID (high-intensity discharge) lights to reduce both your electricity bill and environmental impact. Consider adding skylights to increase the amount of natural light, which can further reduce your electricity bill and boost the energy and mood of employees.
- Invest in a warehouse management system (WMS). The most frequently called upon technology by warehouse owners is a WMS, a comprehensive piece of software that helps to streamline day-to-day operations by providing a central location for all data points. By investing in a WMS, you will benefit from accurate inventory counts, fewer returns, stock visibility, and traceability, among other things.
3. Assemble a skilled and qualified workforce.
As you build your warehouse business with efficient use of space and equipment, consider how you can minimize labor costs while maximizing productivity. As warehouse technology becomes more advanced, many tasks can be performed by automated equipment. Hire workers who offer value through their skills and abilities – and also following safety rules.
- Assign tasks that cannot be completed by machines. Many tasks that are repetitive can be managed by automated systems. For example, automated sorting machines can increase the accuracy and lower order cycle times, thus allowing you to get orders to customers more quickly.
- Train workers to learn new skills. As you hire more employees, assign more repetitive tasks to be handled by machines, and train workers to handle other tasks that add more value to your operation. Additional responsibilities, such as sales, marketing or customer relations can grow the business while teaching workers to use new skills.
- Offer incentives to increase productivity. Everyone likes to be appreciated and recognized for a job well done. Workplace incentives are a great way to motivate workers and increase productivity. Management can offer a wide range of incentives, from free lunches and snacks to annual bonuses and personal time off.
- Implement workplace safety programs. Above all else, ensure a safe workplace. Inspect the warehouse premises and equipment to ensure it meets all workplace safety requirements. Implement safety programs and protocols so there is a clear understanding of how to avoid accidents or injuries, including proper procedures if anyone is injured on the job.
Like any other business, a warehouse business must continually look for ways to improve efficiency and increase profitability, while looking for ways to diversify, grow and expand. The warehouse industry is unique and dynamic. As the global supply chain becomes increasingly sophisticated with new technologies, practices, and processes, warehouse businesses will discover new and innovative ways to be part of the mix.
Sources:
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Sunol, Hector. “5 Foundations of a Successful & Profitable Warehouse Operation.” Warehouse Technology Articles, 3 Mar. 2017, articles.cyzerg.com/5-foundations-of-a-successful-profitable-warehouse-operation.
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