« »

Tuesday, January 27, 2015

Saving on your business warehouse and logistics costs

As any business owner knows, running a successful operation is all about the bottom line. So keeping costs down wherever you can without harming your business is essential. Staff wages are one of the greatest overheads in business, but second to that is the cost of premises and distribution. So here’s how to keep your bottom up by keeping storage and distribution costs down.

Business warehousing solutions
Just in time inventory systems reduce storage costs

Saving money on warehousing

Findings ways to save on the cost of your workspace can be achieved by giving some consideration to the following ideas.
  • Moving premises
Moving to a cheaper location can be an idea, but before doing this, you should take into account whether the new location works for you. Research the facilities, location, transport links, customer base, competitors, and how suitable the premises are for your needs before making any leap.
  • Extend your current workspace
Instead of wasting capital on new premises, think about how you could add to your current work areas. Temporary warehouses can be erected to cope with product over flow, fluctuations in seasonal demand, and as extra office or showroom space. Although temporary buildings don’t typically need planning permission always check with your local authority first.
  • Outsource
Find a warehouse partner that can help you by providing warehousing and distribution services for storing and delivering your products. This takes the handling problems out of your hands, leaving you more time to concentrate on other aspects of your business.

Saving money on distribution costs

Having the right distribution strategy in place will fuel your business growth. However, logistics isn’t always the easiest element of a business to put in place, and inefficiencies will badly impact profit. Moreover, sudden higher than expected growth, changes in location, or excesses in stock can throw any existing distribution strategies into turmoil. Obtain the most cost-effective and efficient distribution channels by trying the following:
  • Optimise your sales
Rather than selling direct to the end user, it’s often far more cost effective to sell to suppliers. This takes much of the headache and cost out of distribution.
  • Focus on demand
Operating a demand driven logistics strategy means demand is driven by the customer, allowing companies to match the demand of products with supply. The advantage of this is in the reduction of transportation costs and the savings that can be made from relying on information rather than physical inventory. However, it’s also important to be able to respond quickly by using a flexible logistics provider.
  • Define who you are
Remember that your logistics strategy should always reflect your business. So If your company’s strategy is to always be the low price leader, then the prime goal of the logistics strategy is to move stuff at the lowest possible cost.
  • Invest in logistics software
Logistics requires endless monitoring and reviews, but an efficient logistics software system helps you organise the process. Track inventory for replenishment and supply, track  and trace goods in transit, monitor and reduce delivery times and empty miles, and control your procurement to save time and money.

About the author: Harry Price is a busy man! Not only does is he a full time writer, but he also teaches English to foreign students.

Image license: Romeogistics, "Inside One of Pantos Logistics' Warehouses"; CC BY-SA 3.0