10 Easy Steps to Reduce Warehousing Costs and Headaches
Today’s consumer wants faster, cheaper, better products. And companies are turning to warehouse logistics and supply chain management to deliver and create competitive edge. Supply chain management is complicated. But there are ‘tried and true’ methods to reduce warehousing costs, and control overall ‘spend,’ while you improve efficiency.
Follow these 10 Easy Steps to reduce warehousing costs:
Choose your supply chain warehouse partner like you would choose a roommate.
You want to select a partner that helps you by providing warehousing and distribution services to store and deliver your goods, just like you want to select a roommate that is capable of contributing to the maintenance and daily tasks of living space you share. The right warehousing partner helps by taking the day-to-day problem solving off of your plate so you can focus on other things. The last thing you need is to drain your energy teaching your partner how to perform a simple task (like wash the dishes), and then have to check again to ensure it is done. The keys here are capability and reliability.
Before selecting a warehousing solution, make sure you’re looking at the right problem.
Identify the areas where you need help first, and then select the warehousing solution. Going in the reverse order, in this case, could potentially increase your costs rather than reduce them. For example, if you only need warehouse logistics for case picking, you may be able to lower your costs with an outsourced customized solution.
- Research your warehouse solution’s capabilities and tools.
Too often do we get a new gadget, such as a new phone, and completely ignore the manual in the box that came with it. Typically, our process is to fiddle and play with the new phone to learn about the features and capabilities as we stumble across them. It’s more of a trial and error kind of process; in this industry, that can be expensive. Instead, check out the supply chain solution software that the warehouse uses and learn what is available to you. For example, if they provide remote access for your team, it can save you time and money when orders drop in with short lead times.
Consider seeking a supply chain consultation.
There are third party resources you can call for supply chain consulting and advice; it never hurts to get expert perspective. A fresh set of eyes can identify areas of inefficiency, steps not adding value or other waste that is draining your time and money.
In logistics, Remember: location, location, location.
True in real estate. True in Warehouse Logistics. The location(s) you select are of primary importance, and can either be your best friend or biggest headache. The ideal scenario is to have your warehouses close to your customers as well as your production, to reduce transportation costs and lead times. Studies have shown that perfect nationwide coverage relies on servicing six major geographies: Northern California, Southern California, Chicago, Dallas, the Northeast and Southeast.
Look for a warehouse with its own set of wheels, or access to them.
Back to the roommate metaphor, you want a warehouse that has its own transportation options, such as a private truck fleet for quick deliveries and established relationships with local parcel carriers such as FEDEX or UPS. This saves you money on premium transport and expediting fees. It can get expensive to have to drive your roommate around all the time, not to mention annoying.
Make sure your warehouse provider has an eye for innovation.
Your warehouse provider should use bar coding, RF scanning and have up-to-date systems for capturing, tracking and reporting the information you need. Are they using hand-held scanners, mobile devices, warehouse management systems (WMS), transportation management systems (TMS and offer easy remote access to your information? Not only will this increase overall efficiency, but will also reduce the headache of trying to complete more complex tasks on machines that are incapable of them. Imagine trying to create an excel spreadsheet on a Nokia brick phone; it doesn’t work.
Choose a warehouse system that can work problems in reverse.
If your warehouse logistics partner can handle reverse logistics, it can be a huge money saver for managing those returns. A good partner can receive, inspect, sometimes perform needed fixes and repackage the returns before returning them back to the customer. Remember the keys are capability and reliability.
Choose a warehouse that is a good fit for your company and products.
Warehouses have different types of storage and material handling equipment, so make sure you have the right ones for your needs. If the rack configuration is geared for bulky goods, and you only stock small items, you’ve wasted a lot of space and money. Another trick is to look for rack heights. You pay by the square foot of floor space, so make sure you can use all the vertical space. Also be sure that the warehouse has the right equipment, structure and regulatory compiance to safely accommodate your products.
Don’t forget your warehouse inventory “spring cleaning.”
Keep a close eye on your obsolete and slow moving products and work with your warehouse logistics partner to remove or store outdated SKUs. This keeps your more easily accessible locations free for active items which, consequently, reduces picking times and increases accuracy.
Following these 10 easy steps will make a world of a difference in your warehouse costs. Before you sign that agreement with your logistics provider, use this as a checklist to make sure you’ve covered the basics to ensure a happier partnership. And good luck with your collaboration!
About Allied Distribution Services, LLC. Allied Distribution is a national network of companies that offer solutions for all your needs, from supply chain logistics to warehouse management and distribution. Contact Allied at 559-435-5810, go to www.allieddistribution.com.