Want to save on pick times? Start with storage

Travel time is a common 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. This is notoriously tricky in e-commerce situations where orders could have picks located and spread out over multiple, non-adjacent locations.

The simple solution is to condense storage space, as well as to improve SKU layout and organization to reduce touches. Straight forward as this thought process may be, it is not always simple to implement.  Every fulfillment center has its own unique challenges that can throw curveballs, but let us tell you why 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. This achieves multiple goals:

  1. Reducing labor cost per pick
  2. Reducing need for additional employees
  3. Increase productivity and order capacity

Just condensing storage, with no other changes to order flow, can have a huge impact on your bottom line.

Did you know that just by shaving 5 seconds per pick, which adds 1 pick per day per picker, a warehouse with a staff of 25 pickers can add an additional 100 picks per week? That is an incredible gain for such a small change. Now imagine you can save entire minutes off pick times. With 60% denser storage and tightly optimized order picking, your operation costs drop without pushing your workforce.

You can calculate the cost savings yourself. If we look at just the labor cost factor:

Average Pick Times / Labor Cost

Say your warehouse staff is paid $13.00 per hour and most can pick an order in 6 minutes. Your labor cost per pick is $1.30.

By reducing the pick time down to 5 minutes per pick, you add 16 picks/day/person and reduce the cost per pick to $1.08. Assuming a staff of 25, the average labor cost savings per week is $440.

That is an average cost savings of around $22,000 per year. Just in labor.

Not to mention cost of warehouse space saved, reduced number of picks needed, increased profits from increased productivity etc.

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 current 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. Over the course of one year they will save over $500,000 and gain the space to increase their product line without needing additional distribution centers.

The rise of labor costs and 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.

FacebookTwitterGoogle+LinkedInEmail