How to Recession Proof Your Warehouse and Reduce Warehouse Costs In 2023
For many in the warehousing industry, this past year was spent recovering from supply chain disruptions. While it’s no secret that the COVID-19 pandemic took a significant toll on businesses around the globe, the need to prepare for the unexpected has never been greater.
Whether there’s another global pandemic or a nationwide recession around the corner, taking action to reduce your current warehouse costs and in turn, help recession-proof your warehouse, may be key to not only surviving but to thriving in 2023 and beyond.
We’ll look at warehousing predictions for 2023, share actionable methods to reduce your warehouse costs — specifically through automation — and explain exactly how our automated solutions at Modula can reduce your operating expenses and set your warehouse up for profitability in 2023.
Industry Trends That Will Impact Warehousing Costs In 2023
Over the last few decades, warehousing has become increasingly complex and costly as a result of many factors: inflation, increasing supply chain complexity, rising transportation costs, and labor fees.
Warehouse operators can expect their warehousing costs to increase by at least 5% over the next year, due to these factors alone.
What else is in store for 2023? Experts have several key predictions for the warehousing industry, including a drop in U.S. warehouse development, a new record for Mexico nearshoring operations, and an uptick in eCommerce leasing.
However, the prediction that may be the most important when it comes to recession-proofing your warehouse, is that the demand will increase significantly for sustainable warehouses.
While some may see the focus of this prediction as solar rooftops and greenhouse gas emissions, we’re looking at it from another point of view: setting your warehouse up for sustainable operation, as in the ability to perform profitably over time.
What does this entail? From opting for used containers to reducing energy costs and investing in automated solutions, we’ll explain exactly how to reduce your overhead.
6 Ways to Reduce Warehouse Costs in 2023
Before we get to automation, there are several ways you can reduce your current warehouse costs manually.
From organizing small items and kitted parts to providing better protection from contaminants, here are six key benefits of totes, bins, and dividers for warehouse material handling.
Practice Cross Docking
Cross docking is the practice of moving products directly from a manufacturer or supplier to a retail chain or customer. Using inbound and outbound docks, products are received, then immediately transferred to trucks for delivery.
This process eliminates the middleman and in turn, lowers costs for your warehouse in several places, including storage, shipping, and product management.
Protect Your Inventory
Key factors in financial loss when it comes to inventory include stock damage and theft — both internal and external.
If you’re not actively protecting your inventory, you’re leaving yourself vulnerable to financial loss that could have been prevented.
Hire security guards, install cameras and restrict access to areas that hold your most valuable inventory. The amount you spend on precautions like these will undoubtedly provide an ROI in no time, compared to the loss you’ll prevent.
In addition, training employees on the proper handling of products will help reduce accidental damage. Allow them access only when necessary, without compromising security measures.
Buy Used Containers
When it comes to shipping or storing your inventory, opt for used containers.
Used containers are an excellent option for those looking to save money in the long run. They can be repurposed and come at a lower cost than new containers.
Whether pallets, bins, baskets, trays, totes or others, this may be one of the easiest cost-saving tips in the warehousing industry.
Maximize Your Equipment
A top goal for your warehouse should be to ensure that all of your warehouse inventory-handling equipment is running at 100% utilization.
This includes:
- Optimizing your warehouse layout so it is as efficient as possible
- Installing the right equipment for your business
- Making sure that the equipment you have is running in good condition and is being used effectively
In addition, you can:
- Use technology to help you monitor your equipment
- Track how long each machine is in use or idle
- Set up a maintenance schedule for each piece of equipment based on its age and condition, so that it’s serviced at least once a year
Utilize the Benchmarking Technique
Benchmarking is a technique used to compare your performance against other warehouses in your industry. It’s a great way to see how your warehouse can be optimized.
Benchmarking helps you determine:
- The best practices of top companies
- How you can improve your warehouse management
- Which areas need improvement
Cut Down on Energy Costs
Energy costs can be a huge expense for warehouse managers. Whether you’re paying for electricity and natural gas or paying to heat your building, the total cost of energy can be substantial.
There are many ways to cut down on your energy costs, from improving your warehouse insulation to installing more windows for natural light, and upgrading older equipment with newer models that consume less power; or even adding solar panels if possible!
Identify the methods that will prove most cost-effective for your warehouse, and make the changes needed to reap the benefits down the road.
How Can Warehouse Management Reduce Costs Through Automation?
Enter your warehouse’s best friend: automation. Here are at least four ways that automated solutions can help drastically reduce your warehouse costs.
Optimize Space
Space utilization is a key factor in warehouse efficiency and productivity. It represents the percentage of warehouse space that is actually being used.
Bulky warehouse storage systems such as standard static shelving and pallet racks can take up precious space in your warehouse.
This is where automated storage solutions come in handy.
Automated storage solutions make use of every inch of your warehouse’s floor space by maximizing your storage density. In addition, automated storage solutions eliminate the footprint required by static shelving and pallet racks and improve your operational efficiency.
As a result, you won’t need to move into a bigger and more expensive warehouse if your business grows.
(Need more warehouse space-saving tips? Read our blog about warehouse organization!)
Improve Inventory Visibility
Many organizations schedule their operations based on unclear or inaccurate forecasts and without an exact overview of the number of products still available in stock at the end of the month.
This can easily lead to some of the most significant wastes, such as excessive inventory, storage, resources and movement costs, and significant capital tied up in unused inventory.
As a result, improving inventory visibility is key to reducing your warehouse costs.
A warehouse management system (WMS) is a software system that manages the flow of inventory from the time it is received until it is shipped.
It allows you to track and manage your inventory in real-time, which helps you optimize your business processes and reduce costs by reducing your inventory levels.
For example, a WMS can help you improve visibility over your inventory levels by providing reports on supply chain metrics such as:
- Stock on hand
- Stock outs
- Cost of goods sold
By identifying trends in these metrics, you can improve your overall efficiency as a company while also reducing costs associated with running a warehouse operation.
Reduce Labor Dependency
Picking is considered one of the most tedious and costly warehouse processes in a manual warehouse.
Typically, a warehouse picker’s day-to-day routine in a manual warehouse includes:
- Holding a paper checklist with instructions on which items to pick and where they are located
- Traveling throughout the warehouse picking items
- Confirming a picked item by marking the paper checklist
A great way to reduce labor dependency and make your warehouse more efficient is to automate repetitive and mundane manual processes
Automated picking solutions help streamline this process by delivering items to your warehouse picker, eliminating the travel time spent walking from one pick location to another. This dramatically improves your productivity, making it possible to do more with less manpower.
Minimize Workplace Accidents
Just like any other workplace, warehouse employees are prone to potential accidents, including falls and overexertion.
If you’re not protecting your employees from workplace accidents, you risk higher rates of injuries and absenteeism, which are both costly scenarios.
To minimize workplace accidents caused by reaching, bending, stretching or climbing, invest in automated systems that create a safe working environment for your employees.
This can result in lower insurance premiums, which will ultimately save money for businesses that choose automation over manual labor as their primary method of operation.
Reduce Your Warehouse Costs with Modula’s Automated Solutions
While you can utilize manual methods to reduce your warehouse costs, investing in automated solutions takes warehouse cost savings to another level.
Automated storage and retrieval systems allow you to maximize your current warehouse space, speed up your picking rates, ensure picking accuracy across the board and ultimately, eliminate labor-intensive and tedious tasks to minimize costly human errors.
At Modula, we offer state-of-the-art innovations to help you reduce warehouse costs and set up your business profitability for years to come.
1. Modula Vertical Lift Modules
Make use of your existing warehouse space by utilizing every inch of your available ceiling height.
To use our vertical lift modules, simply place configured totes, dividers and bins into the system’s picking bays.
A scan of a barcode or simple touch of the system’s user-friendly Copilot controller allows inventory to be automatically delivered to your warehouse operators.
Designed with your employee’s safety and ergonomics in mind, our automated storage systems deliver the goods right to your operator’s location, eliminating the need to reach or travel.
The ability to store more products in a smaller space also allows you to reduce your warehouse’s carbon footprint by reducing the amount of energy you use.
Modula vertical lift modules come in three models:
- Modula Lift: Boost efficiency, picking speeds and accuracy by up to 90% with our most popular vertical lift module.
- Modula Slim: Leverage the same innovation as the Modula Lift, but in a more compact design. Ideal for smaller warehouses.
- Modula OnePick: If complete automation is what you’re looking for, Modula OnePick has you covered. Ideal for eCommerce and fully automated warehouses.
2. Modula Horizontal Carousel
Working with limited ceiling height? You can count on our Modula horizontal carousels.
Modula Horizontal Carousel allows you to save space, reduce labor costs, store and retrieve items as needed with minimal additional labor. This feature boosts throughput and improve accuracy and inventory control.
The horizontal carousel consists of carriers (bins) which are mounted on an oval track that rotates horizontally and delivers stored goods to the picker.
Each bin shelf can be divided into totes, bins, and partitions to create an efficient and well-organized storage space.
They are commonly used in warehouses and distribution centers for their ability to quickly handle large quantities of inventory.
Check out our horizontal carousel in action in the video below!
MODULA HC: the New Horizontal Carousel for Efficient Picking
When seasonal demands arise, you can boost your picking accuracy by up to 99% when you use our barcode readers and Put to Light Systems (more on this below!).
3. Modula Warehouse Picking Order Solutions
Are your picking operations quick enough to meet challenging consumer demands? Save time and money with our picking order solutions.
Our automated warehouse picking solutions allow your operators to simultaneously fulfill multiple orders.
Our Modula Warehouse Order Picking Solutions include:
- Mobile Picking Station: Process large volume orders quickly
- Modula Picking Cart: Move inventory to and from different areas within your warehouse
- Modula Put to Light: Direct your warehouse pickers to the correct picking zone
- Modula Mobile Picking App: Manage your picking operations whether on-site or on the go
4. Autonomous Mobile Robots
Need an extra hand with order fulfillment when demand spikes?
Autonomous mobile robots (AMRs) are smart robots that:
- Navigate their way in the warehouse without supervision from human operators, thanks to next-level sensors, digital mapping and artificial intelligence software.
- Perform warehouse tasks such as picking and putting away inventory while taking the fastest possible route.
Check out our AMRs in action in the video below!
Modula & MiR: automatic storage systems and autonomous mobile robots. How do they work together?
Autonomous mobile robots allow you to:
- Automate time-consuming tasks, allowing warehouse operators to focus on more value-added work that requires human intervention
- Dramatically increase accuracy and productivity to fulfill more orders in less time
- Overcome the uptick in demand during fluctuating and peak seasons
- Save on labor costs when warehouse operators are not available
- Adapt to the evolving needs of each customer, without requiring any structural modifications
- Streamline inventory management, when integrated with Modula’s warehouse management system
(Interested in learning more about AMRs? Check out our guide to autonomous mobile robots!)
5. Modula Warehouse Management Systems
Gain inventory control and visibility to prevent dead stock and overstock when you invest in Modula Warehouse Management Systems.
Modula WMS is a comprehensive warehouse management software that automates the flow of work through a warehouse and improves the accuracy, efficiency, and visibility of all operations.
Modula WMS integrates with vertical lift modules to provide a complete warehouse solution.
The WMS can be configured to receive data from VLMs and other material-handling equipment and integrates with any local ERP systems.
This allows you to store and manage your data in a centrally-located, easy-to-manage system. Thanks to its scalability, it can grow with your business as your warehousing needs change over time.
Check out our warehouse management systems in action in the video below!
MODULA WMS: Easy Warehouse Management Software for Boost Productivity
Our warehouse management solutions allow you to:
- Access warehouse trays to gain inventory visibility
- Accurately pick and replenish your warehouse inventory
- Gain better control over inventory management, preventive maintenance and material handling
- Prevent potential employee theft and unauthorized access with next-level security and identity systems
- Operate in batch and multi-order modes
Wrapping Up
Reducing your warehouse costs through automation and other means can help you prepare for even the most unexpected situations that might lay ahead.
At Modula, our automated solutions are designed to help you streamline operations and reduce costs throughout the warehouse, from storage to picking and beyond.
