Most businesses have been hit hard by the global pandemic and this will continue to have a ripple effect for years to come. The only way for businesses to survive and even thrive is by reducing unnecessary wastage and expenditure. The biggest savings can come from significantly reducing your warehousing costs by following these 5 steps:
- Theft Identification
Theft is the leading reason for inventory shrinkage and is a widespread issue for supply chains; unfortunately, it is on the rise due to the stress of the coronavirus and global lockdowns. Theft is a challenge to prevent but with the security system and vigilant managers, theft can be reduced and possibly even eliminated. Be on the lookout for stock levels that don’t match your sales or unusual invoices as these are indicators that something is off and you need to pay attention to the red flags.
- Consider Couriers
Instead of setting up another warehouse and being subject to added costs and stresses, strongly consider using Texas Couriers to deliver your products straight from your operation. Using couriers can save you money and get your products delivered far more quickly than if it was stored in a warehouse first. You need to do some research on your local couriers to make sure that they can ship your particular items. The best perks for using a courier service are that you can be guaranteed same-day delivery and they can handle packages with special needs.
- Cross Docking
Cross-docking is a super-smart way to reduce your warehousing costs. This practice involves off-loading items or products from incoming trucks and then loading these directing onto outbound trucks with little or zero storage in between. This will greatly reduce your warehousing costs as well as reduce shrinkage – if the product isn’t stored for long then it’s less likely to be stolen. This reduced material handling will reduce labor costs as well as helps your product reach your customers faster by cutting out the middle man.
- Inventory Visibility
Inventory visibility means that you know what inventory you have on hand at any given moment and where it is. Your inventory internal records need to be a true reflection of reality. By increasing your inventory visibility you can provide more accurate forecasting, increase efficiency and reduce stock levels by encouraging smarter resource allocation. This level of greater supply chain transparency will increase demand fulfillment and save your business money.
- Optimize Storage
There are many ways to optimize your warehouse storage, such as extending the racking vertically, reducing your aisle width, and installing a mezzanine floor above storage areas. You need to address any overstock issues your warehouse may have and consider offsite locations for handling any overstock you may still have. If you store large items or large quantities of items you can greatly reduce inventory costs by utilizing some form of dropshipping.
Reducing your warehousing costs doesn’t have to be a difficult process, you just need to think smarter and be mindful when spending money.
