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10 Practical Ways to Reduce Warehousing Costs

Reduce Warehousing Costs

Most companies find that their supply chain logistics capabilities help to set them apart from their competitors given today’s emphasis on fast delivery and low costs. Supply chain management and logistics are complex problems, but there are easy ways to control costs and improve efficiency.

  1. One simple first step is to select a supply chain warehouse partner that can help you by providing warehousing and distribution services to store and deliver your goods. The right warehousing partner can help by taking the day-to-day handling problems off your plate so you can focus on other important tasks.
  2. When selecting warehousing solutions, you should first identify the areas where you need help. For example, if you only need warehouse logistics for case picking, you may be able to lower your costs with an outsourced customized solution.
  3. Check out the supply chain solution software that the warehouse uses. If they provide remote access for your team, it can save you time and money when orders drop in with short lead times.
  4. It never hurts to call in a third party for some supply chain consulting and advice. A fresh set of eyes can easily identify areas where there are non-value added steps or other waste.
  5. Location is of primary importance. Ideally, you want your warehouses to be close to your production facilities as well as to your customers to reduce transportation costs and lead times.
  6. Look for a warehouse that has its own transportation options, including trucks or vans for quick deliveries and one that has established relationships with local FEDEX or UPS partners. That can save you money on premium freight and expediting fees.
  7. Look for up-to-date data processing equipment. The warehouse should use bar coding and possibly RF or mobile devices for tracking your materials and to ensure the most efficient picking sequences.
  8. If the warehouse can handle reverse logistics, it is a big money saver for managing returns. They should be able to receive the returns, inspect and repackage the items before returning them back to the customer.
  9. Make sure they have the right types of storage and material handling equipment to manage your needs. If you only stock small items, you may pay for a lot of wasted space if the rack configuration is geared for bulky goods. Look for rack heights as well. Since you pay by the square foot of floor space, make sure that you can use all the vertical space, and that the warehouse has the right equipment to accommodate your products safely.
  10. Keep careful track of obsolete and slow moving products and work with the warehouse to dispose of outdated items or to store them in an out of the way bulk location. That way, the more easily accessible locations are free for active items, which will reduce picking times and increase accuracy.

Some of these steps sound like simple common sense, but they can have a major impact on your warehouse costs. It’s easy to lose sight of the basics when you’re in the midst of a whirlwind of operations, so refer back to the list for a refresher whenever you are looking for warehouse solutions or a supply chain and logistics partner.

About Allied Distribution Services, LLC Allied Distribution is a national network companies that offer solutions for all your needs, from supply chain logistics to warehouse management and distribution. Contact Allied at 559-435-5810, join the Facebook Page or visit the company website.


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