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How to Reduce Commercial Warehousing Costs

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Archives, Global Trade Daily, Warehousing

How to Reduce Commercial Warehousing Costs

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With an unpredictable market, erratic economy, and huge competition, it can be quite difficult to get a warehouse business running smoothly. Your goal is to maximize profit while cutting down on production and operation costs. Well, that is not always easy. One of the biggest issues that create setbacks is spending money on things you don’t need to keep a business running. My goal is to show you how to reduce commercial warehousing costs, and increase your earnings while keeping the quality of the service on a satisfying level.

The Primary Goal

The primary goal of every professional warehouse must be to reduce commercial warehousing costs. Since all items must be in buy-ready condition, and in their proper place, you must have enough funding to keep this well-oiled machinery running smoothly. If you wish to improve the efficiency, speed, and accuracy in your warehouse, this strategy is a must. Let’s see how to achieve that.

Optimize Your Storage by Reducing Space

Optimizing your warehouse space is crucial for peak performance of your facilities. If we think about expenses, one of the major contributors is land cost. Since the productivity rate of the warehouse depends on the speed of locating the item and loading it onto the truck, you must think of the best system.

Optimize your aisles by carefully calculating the necessary length and width. Learn the dimensions of forklifts, and reduce extra space by moving the racks closer. Furthermore, sorting the packages on the racks makes everything easier.

When we think about square footage, it is crucial to go narrow and tall. That is the best way to reduce warehouse space, without losing productivity and effectiveness. Nevertheless, it is important to factor in the safety requirements of your workers, and provide enough space for them to work without constrictions.

Protecting the Inventory

Every warehouse has its own financial problems. Damaged inventory is most certainly one of the biggest culprits for the loss of money. Smart inventory management helps you keep your inventory protected.

One of the first approaches to take is to tightly stick to the packing and storage procedures. Extensive employee training is imperative for a smoothly-operated business without many losses.

Furthermore, it is not just the damage to the inventory that causes loss of money. It happens many times that a package is lost. That not only dries out your budget, but it is also bad customer service. Implementing proper control systems like RFID, VDP or RF is the best solution.

Finally, increasing overall security by installing top-of-the-art security systems will prevent theft, which is also a huge issue in many warehouses.

Cross-Docking

Cutting out the middleman and transferring a package directly to the customer is a great way to reduce commercial warehousing costs. This system is called cross-docking, and while many are aware of it, not everyone is using it. It is a great way to save both money and time, and improve store management, shipping, delivery, labor costs, etc.

Utility Bill Management Solutions

Reducing your utility bills is a great way to simultaneously reduce commercial warehousing costs. Better insulation, automatic lighting system, and water consumption reduction are just some of the ways to achieve this.

The more windows you have, the more natural light enters the warehouse. If you install hands-free faucets or automatic flush toilets with low flow, you will see great results.

You may also consider having utility bill management solutions to efficiently manage all aspects of your utility bill expenses, and avoid those costly late fees and other oversight penalties.

All these changes require funding, but it is a long-term investment that always pays out in the end.

Used Containers vs. New Containers

Buying new containers for your warehouse seems appealing. Everyone likes to have new things straight out of the factory. However, that can be a costly investment. Instead, you should turn your focus towards used containers. You can find plenty in good condition, at a lower cost.

Believe it or not, you can save up to 40% on the smart purchase of used containers. All vendors keep them in superb condition, and all the containers are cleaned and inspected before selling. With such great savings, it really isn’t that difficult to see the benefits of used containers over new ones.

Cutting Down Labor-Related Expenses

When we talk about cutting down labor-related expenses, we are not referring to reducing employees’ salaries. That is not the way to go about this. However, it is important to properly manage your employees. Having idle workers is only draining your budget.

A great solution is to put everything you have into employee retention. If you keep your employees satisfied and give them an opportunity to develop, they will stay with you. Over time, they will turn into experienced employees that really have no cost. That strategy is much more affordable than hiring and training new employees.

Furthermore, the automation of warehouses is also an option. Machines can run as long as you need them. However, do not forget to factor in the installation and maintenance costs. Nevertheless, it is the main strategy of the future to reduce commercial warehousing costs.

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Joshua Collins is a business owner with a degree in economics, with over 10 years of experience. In his spare time, he runs a blog about startups and writes articles for multiple companies, like ccmover.com and many others. He is offering his advice both to young entrepreneurs looking to find a way into the small business industry and to experienced business owners looking for ways to increase earnings. Furthermore, his vast knowledge of marketing strategies provides a great foundation for any business and helps in reducing costs and increasing effectiveness and productivity.

Archives, Global Trade Daily, Warehousing

6 Ways to Improve Efficiency, Speed, and Accuracy in Your Warehouse

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Modern warehouses are already much faster and more efficient than those 20, even ten years ago. But you’re still feeling the budget crunch every quarter. And, if you’re like us, you know that there are always things we can do to make a warehouse a little better.

So, we crunched the numbers, talked to experts, and meditated in the back of the warehouse to come up with these six methods designed to improve your warehouse efficiency, speed, accuracy, and how much we like working in a warehouse.

Improve Your Operational Software

Your first step in improving your warehouse operations is having the right tools in place to measure, track, and understand what you’ve got. A modern warehouse management system (WMS) is your safest bet to start establishing baselines of your efficiency, waste, how quickly you fill orders, and how accurate everything you do is.

We’ve all heard it a thousand times, but it remains true: you can’t improve something you don’t measure. Choose and implement a capable WMS to gain a better understanding and give your team plenty of ways to use their time and your inventory better.

Enhance Your Metrics Choices

Metrics, especially key performance indicators (KPIs), build on that introduction of a smart WMS. They help you tell the story of your business and how it can do better — and sometimes communicating KPIs is just as important as choosing the right ones.

Review the metrics you track and how you define KPIs. Do they measure productivity? Can they respond to changes to your baseline? Do they match up with current targets and accurately track as performance changes?

Don’t get overly complicated.

You want KPIs that are easy to understand and measure. Glancing at your system and dashboards with these metrics should give you an idea of the health of your business. You and your warehouse team can understand five metrics much better than 20. So, find what easily tells the most important story.

Reorganize Your Inventory Locations

Once you know what to track and can start tracking it, it’s time to review your standard day’s orders and the routes people take to pick them. Look for high-volume products and see if they’re in a good or bad location.

Put your most popular products near they critical points in your warehouse that can speed up picking and packing efforts. Usually, this includes aisle ends and exit or transition areas. However, you might also have enough volume to give them their own space that’s closest to your packing areas, with a set team of pickers grabbing only these while others grab the secondary items to complete each order.

You can speed this up further with a WMS that support voice picking and wave or batch pick and pack methods. They’re faster, more accurate, and improve your efficiency for filling orders.

Try Custom Kitting

When you redo your inventory locations and start reviewing route changes, you’re collecting a lot of data along the way. Use it.

Productivity can see significant gains when you implement custom kitting in your warehouse. Kitting can occur with the packages you sell or how you manage your warehouse, both increasing efficiency by reducing pick points. Selling kits means you can control inventory better and generate higher-value orders more often.

However, you can kit within the warehouse simply by grouping products that are typically bought together. Some companies even bag select items together to give pickers an option to grab one thing instead of many. It can help you control your space and keep inventory counts more accurate, giving you a nice boost.

Give Receiving Its Due

The warehouse mantra is often about getting orders out the door as quickly and accurately as possible. Unfortunately, that leads to bottlenecks and procrastination in the receiving department. The faster and more efficient you become, the quicker you need to get your inventory ready for use.

Make every aspect of receiving, from putting away inventory to breaking down boxes and taking out the trash, important. It should be habit, and your systems should reinforce it. The better you do this, the more accurate and reliable your data, making all these other steps more efficient.

Besides, do you really want a bad inventory count because an empty box listed as full?

Talk to Your Team

And the final way we’ll think about running a better warehouse is by asking you to stop thinking about it. All of the steps above require data and activities from your warehouse team, IT, leadership, and more. Every group interacts with each change in a variety of ways, giving them varied perspectives.

Don’t let all that experience go to waste.

Talk to your team in the warehouse, in IT and sales, and leadership. Discuss what’s working, what isn’t, and their suggestions to change things regularly. You’ll get a two-prong benefit:

-People interacting with the systems and changes have excellent vantage points to find breaking points or see additional changes that can boost your performance.

-It helps your teams feel heard, which makes them happier to come into work and more likely to implement the changes you make.

Your company pays a lot to have different experts in and around the warehouse. They’re the most significant resource for maximizing your business. And, we all like feeling respected at work.

Archives, Global Trade Daily, Special Reports

6 Important Tips for Effective Logistic Management

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The larger your operation, the more steps you will have in your logistics plan and the harder it is to manage. A supply chain has to be very efficient to supply different materials to varying locations at specific times.

It’s also important to be able to respond speedily when there’s a problem. Here are six tips to help you manage logistics effectively.

1. Define your goals

The business sector uses the term logistics to describe the efficient flow and storage of goods from where they originate to where they’re consumed. The supply chain includes transportation, shipping, receiving, storage and management of all these areas.
 
Some of the key goals for all businesses are increased efficiency, more sales, and greater customer satisfaction at the lowest cost. However, for every business there are different logistic/supply chain needs and they must support the goals of the business.

For example, if one of your goals is to make your supply chain as lean and efficient as possible, you will continuously strive to identify opportunities to streamline work processes and minimize waste.

In order to implement a logistics management strategy, business owners need to take a thorough look at every part of the chain, define how it should work and how it contributes to the overall supply chain management goals i.e. are the distribution centers in the right locations and are there enough of them?

2. It’s all in the planning

Logistics can be very stressful without good planning. The entire operation should be able to progress smoothly with minimal interruptions and this requires planning ahead.  Of course, there are always unexpected hiccups but the fewer off-the-cuff decisions that have to be made the better.

Shawn Michaels who works for paper writing services has spent a decade motivating business owners across various industries. He suggests logistics managers should devise flow charts for the entire operation. It needs to include factors such as goods procurement, storage facilities and delivery of products to an exact location.   

3. Have a contingency plan

Logistic managers need to have a contingency plan for every aspect of the logistics. No matter how good the original plan, covering every eventuality is impossible. Managers have to follow the supply chain at every point and be ready to switch to a backup plan if necessary.

Inventory management is often one of the main culprits that can adversely affect business goals. Being able to track and manage inventory in real-time helps with smooth and efficient functioning and increase sales.

If there isn’t the capability to give the alert about potential shortages and relay information about bottlenecks, costly delays can be expected that can significantly affect the company’s bottom line.

Logistics managers need to know that they can’t depend on one supplier or vendor and usually have an extensive network of sources for products and services. Michael Osborne who works as a writer for rush essay stresses the importance of having a network of contacts to rely on in event of an emergency. 

4. Hire the right logistics manager

Your company needs a good logistics manager who knows how to sort out issues and keep things moving. He must be able to keep a cool head and think on the fly. 

He needs to be good with people and have the interpersonal skills to communicate with employees and make alternative arrangements when necessary. It helps if he has a network of industry contacts he can rely on when he needs to sort out problems. 

Richard Alderman, manager of My-Assignment.Help, says that apart from good interpersonal skills, and the ability to remain calm under pressure, good logistics managers also need strong leadership skills and good financial acumen.

5. Adopt automation

Technology can play a major role in increasing еру efficiency of the supply chain. Today’s software is able to measure and analyze just about anything, improving the chances of success in any logistics venture. Valuable software saves time and maximizes performance.

Potential problems in the supply chain such as inadequately tracked fleets, scattered inventory or mismanaged warehouse processes can be improved by automating systems.

For example, using fleet and inventory management software and HR software can help refine processes taking into account factors that have the most impact on the bottom line. Tracking a truck in transit not only provides valuable data but helps to make sure delivery is on time as a driver may have questions about the freight and problems could occur.   

Kenneth Novak who heads up a writing service has found that using systems to centralize information and automate provides access to real-time information. This can help a business to reach its maximum potential with a minimum investment in planning and implementing solutions.

6. Learn from your mistakes

Poor logistics management can undermine a company’s future. In order to optimize your supply chain, you have to learn from your mistakes. This means regularly sitting down as a team, being open about mistakes and discussing how to put systems in place to prevent them from happening again. 

According to John Abrahams who writes easyessay, learning from mistakes is vital when it comes to conducting logistics-related activities in an economic and efficient way. Team meetings need to be held frequently that include all the primary functions of the business in order to review and discuss problems and solutions.

The aim of effective logistics management is to improve operations, ensure customer satisfaction, and increase productivity.  Using the best logistics practices can help your company to gain a competitive advantage. The supply chain environment is continually shifting and so logistics strategies need to be constantly reassessed. If you keep these tips in mind, you can make sure your supply chain is as effective as possible.

This guest post is contributed by Kurt Walker who is a blogger and college paper writer. In the course of his studies he developed an interest in innovative technology and likes to keep business owners informed about the latest technology to use to transform their operations. He writes for companies such as Edu Birdie, XpertWriters and uk.bestessays.com on various academic and business topics.

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Archives, Global Trade Daily, Warehousing

Not Just the Warehouse: How Smart Inventory Management Improves Your Ecommerce Overall

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Once you start using Smart Inventory Management (SIM) in your ecommerce, you’ll notice lots of benefits mostly surrounding inventory control and workflows. But it can improve some other aspects of your business as well, like marketing, margins, and accounting.

It’s all about data, and this moves far beyond the limitations of preventing out-of-stocks by reordering goods faster. While there are software opportunities, such as using SIM to integrate your warehouse and ecommerce platform to allow customers to see what’s available and shipping times 24/7, we’re looking at bigger business processes that can have an impact on company culture, leadership, and communication.

These are some of the biggest bangs for your buck because they help you keep the business healthy.

Saving money from inexperienced purchasing decisions

One benefit of SIM technology is that you will have up-to-date access to current inventory information. This will prevent the purchase of unnecessary amounts of additional inventory. You will save money by only making purchases you will need.

You are also able to save money by being smarter about how inventory is stored. Locating goods at the proper places within your warehouses or strategically around the country in partner fulfillment locations can save you significantly on the time it takes to ship an order and the cost a shipment takes to reach your average customer.

In the warehouse, SIM helps you move inventory to shelves that reduce walking and movement, making your team faster at getting orders out the door. For partners, SIM can help you track the data you need to get a better understanding of where your customers live and how they shop. So, you’ll be able to select warehouse or fulfillment partners located near to them and provide these locations with the right mix of goods so that they can continually fulfill orders without any risk of running out of stock.

Financial Reporting

Accurately knowing your inventory, storage costs, and more data make it easier for your ecommerce store to understand its overall health. You get a complete snapshot at the expense of goods over their lifetime in your care, especially if you link up SIM with your marketing data.

You get a 360-degree view on each item, including sourcing and production, shipment to your warehouse, storage, delivery to customers, and any returns. You may be surprised to learn what the total margins on your goods are, helping you understand what to promote and sell as well as what products it might be time to phase out of your offers.

Plus, it is in these reports that many companies first acknowledge and get a complete picture of their dead-stock: what never gets sold and just slowly eats away at your overall income.

Give leadership and your accountants the ability to understand the costs of your business entirely and discover what you can best manage and change to maintain a healthy ecommerce offering.

Developing New Sales Opportunities

One reason we really like SIM tools is that they make it easier to track your overall sales and look for patterns. Plus, you can test upsell and cross-sell efforts more easily with all this new data.

Combining your products, through efforts like kitting, allows you to leverage your products for the best return both in the immediate and the long-term. You can sell multiple items together, reduce inventory levels (and related storage costs), and even get rid of things that are sitting on shelves for too long.

Customers like it because it’s convenient for them when the products work together. If you add the right set of products, kits can make your offers more useful, less costly, or start a need to reorder from you. This is common in most industries, and one of the best examples are razors that come packaged with a series of disposable heads. The customer gets the handle and heads together and then has to go back to you to get the next set.

Returns and More

Another area to consider for your smart inventory management system heads back to the warehouse but touches on many of the other elements we’ve discussed: returned goods.

Returns present a significant problem for most ecommerce businesses. You have to figure out how to approve and process the customer’s request, handle the items themselves as they come back to you, potentially repackage and resell these, and eat much of the sale cost even if you’re charging a restocking fee.

Customers returning goods tend to be unhappy and want you to automate as much of this process as possible, and they expect an email from you to include things like a shipping label.

SIM tools can integrate with your order system to generate the information the customer needs automatically. Giving your own shipping labels within an SMI also helps you out by updating your team with package tracking data, so they know what to expect and when. You’re able to manage customer expectations and prep your warehouse, minimizing the disruption.

The same system can also record information from customers about the nature of a return, giving you a feedback loop into product development and sales, helping you adjust based on price, materials, or other information.

We’re seeing a rise SIMs on their own as well as integrated with tools like ERPs because being smarter about your inventory cuts down on costs, keeps your warehouses efficient, and makes it easier to manage your business. It’s time for every ecommerce store to start considering a smarter tech stack that includes inventory controls.

Improve Customer Service

It all comes down to customer service, one of the core differentiators in the world of ecommerce. With so many drop-shipping companies, Amazon sellers, small shops, and global partners, it can be challenging to stand out on product selection alone.

So, one way companies are building a competitive advantage is by developing best-in-class customer service. Inventory management is a core part of this even though it doesn’t seem like it. Inventory management allows you to keep filling orders and even get ahead of spikes in orders that are new or seasonal by giving you smarter business analytics.

When you’re ready to ship immediately, instead of having to wait for a new restock, customers are happier. They also like it when your returns policy and other policies are clear and easy to understand. Greater knowledge of your inventory makes it easier to control those types of concerns, allowing you to simplify any steps your customers have to take.

Run a smoother business and have happier customers just by developing better control of your inventory.

Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.