Travel time is a typical efficiency hurdle for warehouse operations.
The time it takes a picker to travel to the pick location, pick the order, and return to packaging eats away at profits. Pick time is notoriously tricky in e-commerce situations where orders could have picks located and spread out over multiple, non-adjacent locations.
High-Density Storage
The simple solution is to condense storage space, as well as improve SKU layout and organization to reduce touches. As straightforward as the thought process may be, it is not always simple to implement. Every fulfillment center has its unique challenges that can throw curveballs, but you should start with storage when you’re looking to improve pick times.
Variables introduced by the human element of warehouse labor are hard to control. You cannot always squeeze more efficiency out of your workforce with incentives or punishments. What you can do is improve your storage layout, which achieves multiple goals:
- Reducing labor cost per pick
- Reducing the need for additional employees
- Increase productivity and order capacity
Just condensing storage, with no other changes to order flow, can have a significant impact on your bottom line.
Learn how to save space in your facility. Download The Guide To Optimizing Warehouse Space Utilization!
Did you know that just shaving 5 seconds per pick, adds 1 pick per day per picker? A warehouse with a staff of 25 pickers can add 100 picks per week.
That is an incredible gain for such a small change. Now imagine you can shave entire minutes off pick times. With 60% denser storage and tightly optimized order picking, your operation costs drop without pushing your workforce.
Average Pick Times / Labor Cost
You can calculate the cost savings yourself. If we look at just the labor cost factor:
Say your warehouse staff makes $15.00 per hour, and most can pick around 60 - 70 lines per hour. Your labor cost per pick is roughly $.25.
By increasing pick rates by 20%, you add 2,400 picks per day, 12,000 per week, and over 600,000 per year. Additional picks result in a substantial increase in revenue for your business. If you find you don't need additional capacity, you can shift some employees to other tasks to reduce your order selection labor. The end result?...
Savings of over $150,000 per year!
Not to mention the cost of warehouse space saved, reduced number of picks needed, increased profits from increased productivity.
When we fully calculated the ROI for one of our customers, we compared every aspect of their current operations to their operational costs after integrating SpeedCell. By condensing their previous aisles down 50% – 60% to just 40 bays of SpeedCell, we found with the savings on labor, pick times, and utilities/upkeep, they gained back the cost of the system in just 4 months. In one year, they saved over $500,000 and gained the space to increase their product line without needing additional distribution centers.
The rise of labor costs and a shortage of reliable and skilled workers adds to the urgency for warehouses to increase the efficiency of their current operations. Leveraging your current workforce to the fullest is essential, and when you optimize your DC without adding more operational costs, you achieve just that.
Are you ready to optimize your storage layout? UNEX can help, contact us today!
