Pallet Racking In Warehouse

Nobody likes hearing it, but cost management is a vital component of any business. Any business large enough to require logistics and supply chain management is going to find themselves encountering ever-increasing costs as their business expands and new opportunities arise, but there’s a few ways to keep them in check.

 

One of these is through increased supply chain management. Supply chains and the processes that come with them are one of the biggest sources of costs and expenditures in warehouse and inventory management for any business, but isn’t completely unstoppable. Here’s a few tips we’ve compiled together for any business to help manage supply chain costs and keep expenses down across the board:

 

Customer Service Solutions: This may seem counter-intuitive, but a lot of money is spent on when companies give customers what they think they want instead of what will actually solve the problem. A lot of companies tend to overspend on shipping to help resolve customer service issues, or offer free shipping on orders where it isn’t economically feasible. Especially in B2B settings, customers will be happy to pay a little more for orders when it helps them run their own business better, so if you can reduce overhead and keep your customers happy by offering different shipping methods, everyone wins.

 

Clear Supply Chain Strategy: This only comes once you’ve looked into your customers’ needs, but once you’ve gotten a clear understanding of your clients and what they expect you can begin defining a better supply chain strategy. Take some time to review your processes and see what steps in your supply chain can be cut or trimmed down slightly – departments not working together, vendors taking too long to supply products, etc – and begin to formulate a better, more cohesive plan. And once the new plan has been written, remember to actually train your employees on it and make sure everyone implements it going forward.

 

Better Use Of Space: The mere act of keeping inventory and supplies in a warehouse is a common source of cost and expenses, and better usage of your space and workers is an easy way to reduce supply chain costs that people tend not to look into. Better usage (or new installations) of industrial storage and wire shelving will allow you to store products more easily, and better layouts in your warehouse will allow your workers to retrieve and store products more easily, reducing overhead and labor costs and increasing productivity.

 

Streamline The Ordering Process: Ordering systems are one of the biggest causes of increased supply chain costs. Keep a close eye on who does your ordering and how often it happens to make sure duplicates aren’t being ordered and to make sure the right quantities of each item are coming in as often as possible. Institute systems like approvals or a review system to make sure these processes are being adhered to, and make sure waste is being attended to.

 

Review Customer Demand: In many cases, inventory and supply management plans are based upon a pattern of customer demand that isn’t applicable anymore. Re-evaluate your ordering patterns and recent sales figures to make sure you’re ordering the right quantities of each item to meet how your customers order now.

 

With these tips you should hopefully be able to manage supply chain costs and see the benefits to both your company – and your customers.

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