Part 2 – Running your warehouse manually is like having a leaky pipe. Why is it so? Read more below.

Still running on manual? You’d be surprised how much cost is going down the drain.

We start a company in order to make money. Nobody does it for the wrong reasons. Now that we’ve established that, we must realise that expenses are present in every activity in our modern society, particularly in corporate operations.

It’s not rocket science to know that in order to make a profit, income must be greater than the expenditure. However, sometimes cost goes over and beyond what a business normally expects. This has got to do with efficiency and other key factors.

Did we say efficiency? Apparently, we did…

However, efficiency is achieved when operations are optimized, all aspects of the business are running at its most proficient.

Sometimes a lack of efficiency is not due to business practices – often times it comes down to the choice of resources.

In warehousing, labour inefficiency can turn out to be more of a cost centre rather than a resource.

Manual picking & packing can be costly

If you rely extensively on manual workers for picking and packing, your costs could rise to 60-75 percent of your entire cost. When a company’s operations use this labor-intensive manner of operating on a regular basis, efficiency decreases. When the workload increases, the company recruits more employees. Not only does a larger workforce increase the potential for worker inefficiency, but it also increases the challenge of managing this group of individuals.

Automation helps to save time & money

This is why warehouses should look at introducing the best automated pick technology and which processes it can support. For instance, in an omnichannel workflow, one warehouse might have to deal with multiple pick processes for a single customer or when working with B2B or B2C customers. No doubt, single picks may still be good for a simple in and out workflow. However, with barcode scanners which help to assign jobs and the validation of inventory will help to save time and money while maintaining a great degree of accuracy.

Automating your business will not only reduce human error (which by the way, is another cost centre in the “leaky pipe”), but cut down on an operations’ dependence on manual hands. Investing in a warehouse management system (WMS) will help increase productivity, reduce costs and free up your human resources for other more important or profitable tasks.

60-75% of cost is on manual picking & packing. Automation will save this cost and help reallocate the labour to build other parts of the business.

When you automate areas such as billing, you are better able to capture costs for services and storage more efficiently. Save money and avoid that income literally slip through your fingers.

Mistakes are costly

It is not uncommon to find 3PL warehouses who spend a lengthy period just calculating how much they should be charging their customers. On top of that, mis-shipments can lead to compromised inventory integrity, chargebacks and reshipments – the cost of these mistakes comes back to… you guessed it – the warehouse.

Make more money by streamlining workflow

Using a simple and guided automated process such as mobile scanning can reduce bottlenecks in your system. This streamlining will lead to better efficiency in billing for services such as handing your customers’ inventory, the use of space in your warehouse and so on.

Your accounts department will thank you for it when at month end, consolidation is more accurate and when the company starts making more money, there will be smiles around as well.