Where Are the Hidden Cost in Your Warehouse?

13 Feb Where Are the Hidden Cost in Your Warehouse?

In today’s fast-paced market, Malaysian business owners are continually searching for ways to streamline operations and bolster their bottom line. However, hidden costs in warehouses can often go unnoticed, directly impacting profitability. With the rise of omni-channel fulfillment, you might think that modern warehouses are more productive and efficient than ever before. But dig a little deeper, and you’ll find the truth is far more complex.

A study conducted by Honeywell reveals some startling statistics that could be affecting your warehouse right now:

• 22 minutes of every 8-hour shift is unproductive due to various reasons.
• On average, there are 134 mispicks per week in a distribution center (DC), which translates to an annual loss of approximately $201,000 due to picking errors.

This data is a wake-up call for businesses to scrutinize their warehouse operations. Let’s explore some of the core issues that might be contributing to these hidden costs:

1. A Lot of Manual Data Entry

Manual data entry is not only time-consuming but also prone to errors. These errors can lead to incorrect orders, inventory discrepancies, and ultimately, unhappy customers. Automating these processes reduces errors and frees up your staff for more valuable tasks.

2. Hard to Predict Customers’ Demand

Without proper data analysis tools, predicting customer demand becomes a guessing game. This can result in either stockouts or excess inventory, both of which are costly for your business. With advanced data analytics provided by a Warehouse Management System (WMS), you can accurately predict customer demand, ensuring you have just the right stock levels.

3. Operational Costs Are Getting More Expensive

The cost of running a warehouse, like electricity and keeping machines working, can take away from your profits. Saving energy and using space wisely is very important. Instead of making your warehouse bigger, WMS can help you optimize the use of your current space, making your operations more energy and cost-efficient.

4. Labour Turnover

The warehouse industry often faces high employee turnover rates, leading to increased training costs and loss of productivity as new workers get up to speed. Automation through a WMS can reduce the dependence on manual labor, hence mitigating the impact of labor turnover.

So, what can you do to address these challenges and uncover the hidden costs in your warehouse?

Automation is not a luxury but a necessity to tackle labor turnover. It streamlines processes, reduces the reliance on manual labor, and compensates for a fluctuating workforce.

And when operational costs begin to mount, it’s not always feasible to expand your premises. That’s why learning to optimize your current warehouse space is crucial. This can include maximizing vertical space, improving layout designs, and implementing just-in-time inventory to minimize holding costs.

By taking these steps and integrating a Warehouse Management System (WMS), you can unlock efficiency and savings in your warehouse operations. Senwave’s WMS solutions are designed to help you automate your warehouse, forecast demand more accurately, and optimize your existing space.

By investing in the right technology and strategies to recession-proof your warehouse, you can safeguard your operations against economic downturns and stay ahead in the competitive market.

Don’t let hidden costs hold your business back. Act now and ensure your warehouse is as efficient and cost-effective as it can be with Senwave’s digital transformation solutions.