From packing slips to bills of lading to pick tickets and other paperwork, third-party logistics (3PL) warehouses utilize tons of paper every year for operational purposes that end up as waste. By adopting technology such as a warehouse management system (WMS), 3PLs could eliminate much of this waste, but striving for a paperless warehouse environment is still an important–if seemingly daunting–goal. For 3PLs that have never considered reducing paper waste or, perhaps, see it as too overwhelming of a process, here are three reasons to reexamine paper use in the warehouse.
1. Eliminating paper can help with labor shortages
According to our recent 2021 Third-Party Logistics Warehouse Benchmark Report, finding and retaining workers ranked in the top three challenges for 3PL warehouses this year, and the highly publicized supply chain disruption and worker shortage since the pandemic has made labor a major concern for 3PL warehouses. By adopting different technologies, 3PL warehouses can address both their paper usage as well as their labor issues with one solution.
For example, introducing automation that can execute warehouse processes digitally instead of manually with a person using pen and paper can replace or reduce labor needs while eliminating unnecessary paper usage. Some companies report improving labor efficiency by up to 50% upon implementing a WMS. Additionally, a WMS that goes beyond simply tracking inventory and also automates billing and invoicing can replace physical invoices and documentation while simultaneously lessening the amount of work that must be done by workers.
2. Reducing paper increases profitability
At a basic level, reducing paper usage in the warehouse increases profitability by reducing the overhead costs necessary to run a 3PL. Less money spent on paper means lower operating costs, which enables greater profitability.
However, the greatest gains to profitability from reducing paper also come from the adoption of technology that would replace the manual paper processes in a warehouse. In our Five Point Warehouse Tune-Up, we identified technology–including warehouse equipment and automation–as one of the key factors contributing to higher levels of operational efficiency that leads to greater profitability. Paper-based methods are inefficient, error-prone, and can end up being very costly when compared to cloud-based or software as a service (SaaS) systems that may seem expensive at first glance, but save the warehouse time and money in the long run.
3. Paper-based operations are bad for the environment and unhygienic
Probably the most obvious reason to reduce paper waste, environmental concerns are extremely important to consider as we see the devastating effects of climate change and our waste management infrastructure is overwhelmed. Skeptics may ask, what about recycling? But the reality is that not all paper is suitable for recycling, and much of what we “recycle” still ends up in a landfill, or, worse, our natural environment. With many warehouses focused on becoming greener and reducing waste, the best way to go green is to cut back on paper. Additionally, considering how important sustainability is to many new entrants to the workforce, this can also help or hurt your hiring efforts.
Also important to consider is how paper affects hygiene in the workplace. As essential businesses, 3PLs continued to operate throughout the pandemic, potentially putting workers at risk of illness, and paper-based operations only increased that risk. Paper is unsanitary in that it can carry bacteria and viruses and pass them between coworkers as it moves throughout the warehouse. Alternatively, mobile devices and computers that would replace paper often do not switch hands, and if they do, workers can sanitize the devices before handing them over. Paper is not only bad for the environment, but it might be bad for your health, too.
There are many more reasons why reducing paper waste is a good objective for 3PLs, and many warehouses have already acted; industry trends show that the most efficient, profitable, and future-proof warehouses rely on a backbone of technology in paperless environments. As 2022 approaches, consider making reducing paper waste an action item for your new year strategy.
To learn more about strategies to improve your 3PL warehouse, download the Third-Party Logistics Warehouse Benchmark Report or subscribe to our blog.