The Real Cost of Inefficiency in Small-to-Mid-Sized Warehouses

Colleen Stewart

Apr 14

2 min read

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By Colleen Stewart | Supply Chain Consultant | April 2025

In the world of logistics, efficiency isn't a luxury—it’s survival. For small to mid-sized warehouses, every misplaced item, every delayed order, and every inefficient process comes at a price. But how much is inefficiency really costing your business?

The answer: more than you think.

🔍 Hidden Costs Are Everywhere

Most warehouse leaders focus on obvious expenses: labor, space, and equipment. But inefficiency hides in the gaps between systems and people:

Idle Labor Time – If your team spends 15 minutes per hour waiting for instructions, system updates, or inventory to arrive, that’s over 12.5% of wages paid for zero output.
Inaccurate Inventory – Misplaced SKUs lead to backorders, customer complaints, and lost sales.
Space Waste – Poor layout or slotting often results in wasted square meters and higher rent costs.
Order Delays & Errors – Rework, customer churn, and reputation damage aren’t always tracked—but they hurt your bottom line.

💡 Case Study

One client—a mid-sized FMCG warehouse—believed their operation was “doing fine.” But after a one-day walkthrough, we identified:

18% of picking time lost due to poor slotting.
Inbound shipments delayed an average of 42 minutes/day due to unclear staging zones.
12% of inventory overstocked due to lack of visibility.

After applying low-cost, high-impact improvements? They saved over €74,000 annually.