Labor costs account for 65% of the total warehouse operating budget. Employee salaries are only one aspect of labor costs. They also include the costs of employee sick days, injuries in the workplace, and potential lawsuits associated with those injuries. A reduction in labor costs will go a long way to reducing overall warehouse expenses.
Automation will also provide the following additional benefits:
- A 25% gain in overall productivity
- A 10-20% increase in usable warehouse space
- A 15-30% more efficient use of stock
25% Gain in Productivity
Implement the use of barcodes with a warehouse management system to see a 25% gain in overall productivity. With a WMS creating the pick list, and using tablets to scan items during the pick process, not only will employee productivity increase, labor costs will decrease. The WMS created pick list will lead to a 40% reduction of walking time needed for picks by creating a more efficient pick route through the warehouse. Furthermore, the WMS will direct walkthrough traffic, eliminating bottlenecks and injuries caused by employees reaching the same areas at the same time.
A 10-20% Increase in Warehouse Space
An organized warehouse increases storage space. When adopting a WMS directed putaway, usable space in the warehouse will increase by 10-20%. The WMS will assign storage locations in the warehouse based on item size and sales volume. It will also help you free up storage space by identifying obsolete inventory that can be donated or thrown away.
15-30% More Efficient Stock Use
A WMS directed putaway creates an organized warehouse. An organized warehouse leads to 15-30% more efficient use of your stock. How? Since 20% of warehouse inventory accounts for 80% of all picks, a WMS will ensure that those items are placed in the most accessible places. With high turnover items stored in easy to reach locations, pick time, and thus labor costs, will decrease. In addition, the WMS increases inventory visibility. This means you will see exactly how much inventory you have on hand and will prevent over or understocking of items.
SkuNexus is a fully customizable commerce operations platform that can help you improve your current warehouse processes and reduce labor costs.
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