Many expenses go into calculating storage costs, from the big expense of holding inventory to fixed costs like utilities and rent. New premises often have startup costs, and there are also dynamic costs like stacker cranes, conveyors, and forklifts.
A warehouse’s size has a strong influence on labor costs, which typically eat up a big share of a warehouse’s overall costs. When a warehouse is too big, pedestrian and driver movements are longer than they need to be. That’s why it’s vital to get the space just right if you want to keep costs under control.
When business suddenly starts to surge, it’s important to resist the urge to expand space until all other avenues have been exhausted. Other solutions could prove more efficient – for example, adding mezzanines to make use of space above loading dock areas. Another approach is using overhead conveyors, particularly if the products tend to be items like clothing, and high-speed sortation conveyors can give you a lot of bang for your buck in this scenario. You could also switch to articulated forklifts, which can allow for as much as 50 percent more pallet storage locations.
The Right Racking Can Keep Costs Down
Some products can be kept in double-deep racking, while push-back and mobile racking can also be utilized where appropriate. If cold storage is needed, APR racking can help save space.
Warehouse costs typically eat up around 2 percent of your total sales revenue once everything is operational, and more than half of that is usually spent on labor. This is why productivity gains should be taken wherever possible, whether it’s by retrofitting voice systems or boosting training.
No matter how much business is booming, make sure you are fully exploiting all your racking and shelving options before you opt to enlarge your warehouse.
This blog post was based off an article from Warehouse News. View the original here.