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Travel time in the warehouse represents one of the biggest costs in modern distribution centers. Pickers must put away incoming product, pull product, and move products to packaging and processing zones. Like transportation management for shipped product, effective labor management and lean processes in the warehouse are key to lowering labor costs in your distribution center.

Warehouse Managers Underestimate Lost Revenue Due to Travel Time

Warehouse revenue is reliant on fill rates and orders shipped minus overhead expenses, including labor. Using manual picking and transportation devices, like carts, in the warehouse will result in less efficiency for workers, increasing costs per order. As explained by Logistics Viewpoints, the travel distance and prescribed path of pickers depends on the type of material handling equipment used. Failure to recognize this fact will lead to delays in moving product and filling orders.

Effective Control and Management of Travel Time For All Orders Reduces Distribution Center Costs

Control and management of travel time is based on reducing the amount of time to fill orders. Delay-causing issues will still exist, like ramps, obstacles in the aisle including other workers, and inventory issues such as incorrectly slotted bins or inaccurate inventory. Essentially, existing warehouses could improve efficiency through a 10-percent increase in travel speed. Optimizing slotting locations can be effective in lowering labor costs in your distribution center. Using people analytics in warehousing can also help identify problems pickers experience and how to overcome them.

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Best Practices For Lowering Labor Costs in Your Distribution Center

Warehouse Managers should know a few tips for lowering labor costs beyond “telling workers to up the pace.” Some of these tips include:

  • Automate scanning and order picking processes. This tip is focused on the tools human workers use to verify product picked is the products ordered.
  • Automate picking with robotics. Robotics may also include automated, smart conveyors and robotic carts that move throughout the distribution center in tandem with workers.
  • Optimize routes. A single distribution center can involve thousands of steps per hour. Optimizing routes effectively reduces the number and impact of delays in moving product.
  • Optimize slots. Slots must evolve with the changing demand forecast, and all incoming freight should be slotted according to recommendations in a slotting optimization program.
  • Integrate systems.  Integrated systems, especially the WMS and OMS, are key to optimizing both routes and slots, as well ensuring appropriate inventory levels. Since systems communicate, Warehouse Managers can immediately view overall productivity and identify ways to decrease labor costs, increasing profitability.

Take Back Control of Your Distribution Center With Fully Integrated Controls

Cost reductions in your distribution center are integral to staying competitive and meeting consumer demand. Since effective supply chain management is about picking the low-hanging fruit, lowering labor costs in your distribution center should begin with reducing travel time for workers and orders. This is possible through integrated systems and innovative picking strategies, including waveless picking and automation. Instead of using old, archaic systems, consider upgrading your existing WMS and integrating systems by partnering with the experts today.