Warehouse labour cost calculator
Two figures you already know, one number back: what the paid hours that don't reach the work are costing you a year.
The calculator needs scripts to run. The working below does the same sum by hand.
What is it costing you?
What the paid hours that don't reach the work cost you, if utilisation moved from 65 to 90 per cent, the top of a realistic level rather than a perfect one
Worked out from your two figures and the assumptions below. An estimate rather than a measurement
It's worth reading as hours rather than heads. Closing the gap means more of the work gets done by the team you already have, with less overtime and agency needed to cover it.
Fettle is charged per tracked operator, on the operators actually working, which comes to under one per cent of what an operator costs you.
How the number is worked out
The working is here so you can check it, or lift it straight into a business case.
- Your yearly labour cost: the number of operators times what one operator costs you a year.
- Where your utilisation is likely to be today, taken as 65 per cent. That's what two warehouses we've worked in measured once the work that never reaches the WMS was counted, such as replenishment, housekeeping and training.
- Where a well-run warehouse gets to, taken as 90 per cent, the top of the 85 to 90 per cent we treat as realistic: six hours 45 minutes of work in a 7.5-hour shift.
- The 25 points between the two, times your yearly labour cost. That's the cost of the paid hours that could reach the work and don't, rounded to the nearest £1,000.
For example, 200 operators at £33,000 each is a labour bill of £6.6m a year. A quarter of that is £1,650,000.
ONE SHIFT
Where the paid hours in a 7.5-hour shift go
Two bars show a 7.5-hour shift. On the systems alone, the tasks the WMS recorded fill around 42 per cent of it, about three hours ten minutes. With the off-system work counted, the bar reaches 65 per cent, about four hours 53 minutes. A shaded band from 85 to 90 per cent marks the realistic level, about six hours 23 minutes to six hours 45 minutes, at least 90 minutes further on.
Two warehouses we've worked in, measured on their own systems and then with the off-system work counted. The hours are those percentages applied to a 7.5-hour shift.
Why realistic rather than perfect?
Because nobody reaches the work every paid minute. Briefings, breaks, walking to the first task and waiting on stock are part of every shift. The calculator stops at 90 per cent, the top of a realistic 85 to 90: six hours 45 minutes' work in a 7.5-hour shift. A figure built on perfect would promise hours no warehouse gets back.
Where do the two percentages come from?
The 65 per cent is what two warehouses we've worked in measured once the off-system work, such as replenishment, housekeeping and training, was counted. On their systems alone, the same two read around 42 per cent. The 90 per cent is six hours 45 minutes of work in a 7.5-hour shift, the top of a realistic level.
Can I use this in a business case?
Yes, as a first estimate, with the two figures you put in and the working above shown alongside it. Most boards will want the measured version before they sign anything off. That comes from your own data, starting with the week on site where we agree the starting point every later change is measured against.
What turned up when it was measured
572 hours in one week sat between operators clocking on and starting their first task, time no report ever showed
Regrouping the pick lists lifted output 12.5% in a warehouse of around 600 people, by changing the method rather than working anyone harder
See where the hours actually go
The calculator gives you one number from two figures. The demo shows the version with every dial in it and is set up for the kind of warehouse you run. It takes about an hour.
Book a demo