Supply chain businesses worldwide are constantly competing to gain market share, optimize operations and reduce costs. For many supply chain solutions providers competing on cost has proved to provide a significant competitive advantage. To compete on cost, it is necessary to first reduce costs. There are many ways for your business to reduce costs. Below we will detail the top 8 ways for your warehouse facility to reduce costs.

Optimizing facility layout is a good first step to reducing costs in your warehouse. Whether your facility is 3,000 square feet or 300,000 square feet there is room for improvement. Analyzing inventory flow through rate can help your operation to identify fast moving items and which items should live in areas that can be replenished and picked easily. Identifying these items can help to optimize inventory location priority.

Implementing EDI and ASN can also provide significant cost savings. Using these communication methods can give your staff access to data in real-time, improving decision making capabilities, improve supplier relations and simplify your business all while reducing overall transaction costs. Utilizing forecasting technology and analytics in your warehouse can help your team to more accurately estimate needed inventory levels. Eliminating excess on-hand inventory will reduce associated inventory handling costs.

Some supply chain solutions providers not only manage inventory for customers, but own and manage some of their own inventory as well. For those who own inventory, it is valuable to take advantage of bulk discounts offered by manufacturers for fast moving products. This can help to reduce the cost of the inventory item itself, which can then be passed on as savings to customers.

The implementation of crossdocking can also be a cost saving tool for your warehouse or distribution center. Eliminating inventory storage and facilitating order fulfillment in a just-in-time (JIT) fashion reduces inventory holding costs as well as labor costs. Further labor savings can be received through workforce performance monitoring. Measuring performance using KPIs and comparing to industry standards will help your business to maintain efficient workforce management techniques. Utilizing your warehouse management system to provide labor reports will simplify this process.

Lastly, leave final component manufacturing until orders for that item must be fulfilled. In some cases this can reduce storage costs if these add-on items may increase the inventory size significantly. WMS software that includes manufacturing execution functionality can assist with managing this process.

To learn more about reducing costs within your warehouse visit , call 800.933.2839 or email .

Other Ways to Save Money in Your Warehouse Operations:

Cross Docking

  • Reduce Labor Costs
  • Eliminate Picking and Putaway
  • Limit Storage Space Needs

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