Where Do the Biggest Losses Occur in a Warehouse?

Biggest losses in a warehouse

Has your business recently suffered losses in your warehouse operations? Are you beleaguered and unsure of where to turn? While there are many sources of losses in the warehouse, there are a few areas in particular that are primary culprits. By addressing these areas in question, your organization can see a sudden uptick in profitability by amending issues in these problem areas.

Here are four proven areas that create losses in any warehouse.

1. Accidents

Accidents are a sure-fire method to create losses in a multitude of ways. First, if the accident causes injuries to an employee this will likely result in a workman’s compensation claim which will cost the business. Furthermore, if any inventory is damaged in any accident this also slashes profitability and incurs a loss for the item in question. As an estimate, the average accident can cost between $35,000 and $40,000. In terms of damages to equipment and inventory, any one incident can proliferate upwards of $150,000 in losses. Reducing accidents is a proven way to drive down losses.

2. Lack of Training

This point more or less coincides with the first one in that a lack of training can create accidents and also increase liability. In some cases, a lack of training can cause an organization to expose itself to fines and penalties be that it is not working in compliance with modern presiding regulations. Instituting training regimes can keep both management and warehouse employees up-to-date with the rules and regulations, while also forging a progressive attitude towards safety and efficiency.

OSHA, in particular, can be a great asset and ally but also an overwhelming adversary. Drivers who are not up to certification standards can cause a lot of trouble for any company. Punitive fines can be suffocating but they can also be avoided. Proper training prevents such an event and also limits liabilities and enhances productivity.

3. Inefficient Fleet Activity

According to TotalTrax, as utilization drops, losses are bound to increase. As we had promoted in our corresponding article regarding the appropriate selection of the right forklift for the right job, efficient fleet activity affords all vehicles to be used enough where they fit their purpose and optimize the duration of executing a task.

The efficient fleet activity also affords any organization the opportunity to conduct routine maintenance and limit wear and tear on any one vehicle. In adhering to this principle, overall repair and maintenance costs are decreased by virtue of the fact no one vehicle is overused and overworked.

4. Vehicles Locked Out Due to Maintenance Issues

Aligning with the principle outlined above, vehicles locked out to due to maintenance losses can put a dent in any enterprise’s wallet. In many regards, this will likely diminish productivity and also create a heavy burden on available vehicles to complete the project. As a result of this heavy burden, active vehicles are prone to be subjected to more maintenance costs and repairs. These expenditures directly impact profitability.

How do you replace your CMMS

See the Results Red Hawk Enjoys With Limble

Image Description

Tom Reddon is a forklift specialist and blog manager for the National Forklift Exchange. He also sits on the Material Handling Equipment Distributors Association (MHEDA) Executive Dialogue team. Follow him on Twitter at @TomReddon.

Image Description
Written by

Tom Reddon


Leave a Comment

Your email address will not be published. Required fields are marked *


This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.