Labor costs are the largest expense of doing business for many warehouses. In addition to wages, businesses have to account for related costs such as payroll management fees, hazard insurance, and benefits like health insurance. Increasing labor costs can eat into profits and make it difficult to operate your warehouse. In addition, the current labor shortage has made it difficult to find help and has led to a further increase in wages, causing businesses to look for ways to improve the efficiency of their labor force and cut costs.

One way to cut down on your labor costs and increase productivity in the face of labor shortages is to use technology and optimize your equipment. To identify ways to reduce labor costs, first, you need to determine where the bulk of your costs lie. There are three main categories of employees in a warehouse: direct, indirect, and administrative. Direct labor includes employees that work on the floor and perform tasks such as receiving, picking, and replenishing. Indirect labor workers are the supervisors and inventory control personnel. And, administrative employees work in data entry, customer service, and order planning type areas. Depending on your operating costs, you can select areas where you will benefit from cost savings.

Here is a list of 5 pieces of equipment that will help reduce labor costs in your warehouse:

1. Carton Flow

One way to improve the efficiency of your workforce is to have a storage system that speeds up your operations. Carton flow is a type of dynamic shelving that uses gravity to move products from the rear end of the shelf to the front. This type of shelving allows for the product to be loaded from the back while picking continues in the front. As space opens up in the front, the product moves from the back and replaces the open space. 

Carton flow speeds up the order picking process and is a great way to improve productivity in order fulfillment warehouses. When carton flow is used, products are easier to reach, more organized, and employees don’t have to spend as much time organizing and loading the products.

Although carton flow costs more than regular static shelving, the savings in employee hours will more than makeup for the difference in cost. As an example, when you have static shelving, your employees spend more time restocking and picking. In addition, carton flow will also increase your storage density compared to static shelving.

2. Containers & Bins

Having an organized and efficient storage system is crucial to the smooth running of your warehouse. Investing in storage equipment will increase your employee productivity and cut down on wasted time trying to locate items.

Containers and bins can be used in various tasks in a warehouse. Labeling containers and having designated storage locations is a great way to organize your picking and storage processes. Storing the same SKU in the same container will also make it easier to find products. This is especially useful for open container picking practices. Bulk storage containers can be used in receiving and sorting products; saving time and effort during these processes. Whereas nesting totes can be used for sorting smaller items and help organize your inventory. 

Containers and bins are a simple and low-cost investment that you can make to better organize your products and make picking, stocking, and storage operations easier in your warehouse. There are many types of containers that work for different types of products.

3. Conveyors

Conveyor systems are widely used in warehouses and material handling businesses to reduce the travel distance of products from one station to another, and increase the speed of operations. Using conveyors in your business will cut down on the time your employees spend walking and allow for better integration between the existing systems in the warehouse. 

Conveyors can be used to move many different types of products from lightweight cartons to heavier pallets. They can also efficiently move products that are of different sizes and shapes.

There are several types of conveyors. Among the most cost-efficient and easier to maintain are gravity conveyors. Gravity conveyors are a type of conveyor system that uses gravity to transport products between two locations. These conveyor systems usually have rollers or wheels built on a frame that help move the product down the line. They do not use power to run, making them more economical to use.

Powered conveyor systems such as belt conveyors are another popular choice in material handling. These are often used for smaller and lighter pieces. 

4. Warehouse Management Software System

For many warehouses, the biggest labor expense is time spent traveling to gather products. A Warehouse Management System (WMS) can help cut down on that time and save you on labor costs. WMS is a type of software for tracking your inventory and visualizing how your products move throughout your warehouse. It is a great way to identify wasted labor hours and make your operations more efficient. A WMS helps “direct workers” such as those involved in the picking process by assigning them tasks based on proximity. It increases the efficiency of your picking processes which reduces wasted labor hours. It also minimizes the time spent planning by supervisors and administrative workers. 

Another benefit of a WMS is that it eliminates a lot of paperwork that needs to be done by administrative staff, thus reducing operational expenses. All of this data is stored electronically within a WMS and is easily accessible by authorized employees. WMS will help you plan labor more effectively and prevent over or understaffing. 

5. Barcode Scanners

Barcode scanners are an easy way to track your inventory as it moves throughout the warehouse. Paired with scanning software, the use of barcodes improves data collection and increases the efficiency of workflows. Using barcodes in your warehouse can boost productivity in many ways. One of the biggest advantages of using barcodes is the increase in accuracy rates. Barcodes reduce data entry errors that are often made in manual entry while taking less time. When you use barcode scanners, you do not have to rely on an employee to manually enter data as the scanners record this information instantly. Barcode scanners also enable employees to process orders faster and improve the workflow in your warehouse. They can even help track employee hours and cut down on HR management costs.

If you are looking to cut down on labor costs, you might consider investing in equipment that will increase the productivity and automation in your warehouse. The best place to start is by identifying where the majority of these costs are coming from and selecting the right equipment.

American Storage & Logistics Has All of Your Equipment Needs

Whether you’re setting up a new warehouse or looking to improve the efficiency of your existing operations, American Storage & Logistics has all of the equipment you need to build cost-saving systems. Check out our website for new and used inventory. If you have any questions, give us a call at 616-246-9800 to speak with a sales engineer.