In the concluding part of this article, we will discuss the commonly overlooked costs that can help you increase ROI.
4. The Hidden Cost of Maintenance
Investing in a fleet of forklifts, leasing the warehouse space, employing staff all require a significant investment. Add that to the ongoing maintenance of these components and your costs just seem to keep adding up.
Part of the ongoing maintenance will include maintenance of the racking. Depending on the amount of and expertise of the fork lift drivers, the type of goods stored, your racking may be due for maintenance anywhere from every 4 months to every 4 years.
The type of racking itself also plays a part in how often it will need to be maintained, for example drive in racking is prone to damage, as the fork lifts have to get really close to it while whizzing past. Working ‘inside’ the racking leaves very little allowance for error. And when things go wrong there, THEY GO VERY WRONG.
The flip side to this cost is that when damage has occurred and you are seeking parts. If you had obtained it from a manufacturer who no longer carries or manufactures the part, the waiting time becomes a big issue
5. Hidden Cost of using Holding Areas
A major KPI in many warehouses is the time used to load and unload trailers and HGVs. One way of meeting these KPIs is the creation of dedicated spaces of the warehouse. This acts as a holding area for the unloaded pallets, before the fork lifts pick them up.
The location of this area is key to meeting KPIs as it impacts the amount of travel time the forklifts and pallet trucks incur. However, with careful planning and redesign, the floor area can be eliminated and used for other purposes.
6. Cost of External Storage
Depending on the primary freight that the warehouse processes, there will be extremely busy periods, usually in time with seasonal events. Problems arise when the accounting department allocates these overheads to the general income statements. Thus leads to inaccurate reporting of the profits or losses for that period.
Transportation costs, handling costs and stock management issues can also add to the overall costs. These costs regularly run into tens of thousands of pounds; money that could have been saved and used in other departments.
7. Hidden Cost of Using a Building and Racking Synergy
In designing a new storage facility or redesigning an existing one, you can take advantage of the ‘blank canvas’ and build a structure that will encompass whatever type of racking you plan to install. Enlisting a design specialist on the build team can reduce the potential cost from ineffective space allocation.
Having abroad plan in place for what your warehouse will look like will allow you decide the best layout of all the components; from style and type of pallet racking used. One example is building facilities with an extra few feet in height. This reduces floor space in use and delivers savings on building costs.
Most companies simply incur the initial costs and take it as a done deal. The numerous ongoing and easily overlooked costs are rarely taken into consideration, but they exist across in one form or another in warehouses all over the UK.
Examining your processes can help you improve ROI. Contact Monarch Shelving Limited and let us supply your racking needs.
