There is a fine line that connects customer retention and warehouse efficiency. Once your warehouse efficiency slips, so will your customer retention. In short, everything you do within your warehouse facility, with all the warehousing operations, it automatically reflects your customer retention rate. When your customers choose to take the better road, that is, your competitors, who are starting to serve them much faster and fulfill orders a lot quicker than you do, your bottom line will definitely take a hit.
How you manage your stocks and inventory can potentially interfere with how much profit your business makes. Or even worse, it could result in you losing all the money you worked hard for.
This is why it’s ultimately important to manage your stuff well, especially if you operate extensive warehousing facilities. In a world full of booming e-commerce businesses, be one of those who stand out because of how well you carried out the company’s daily operations, stocks, and inventory. Here are the top money-saving options that can help improve your warehouse management system:
Why is Inventory Management Important?
Before anything else, let’s try to identify why inventory management is essential in all warehousing facilities.
Whether you’re a startup company with small warehouses or a known business for years with warehouse spaces as big as those that LSCR has, inventory management is crucial. It basically helps work things out for you and your business. Meaning, you can avoid losing money when you learn how to quit overstocking or performing incorrect audits.
Money-Saving Options To Help You Improve
Reduce Space By Optimizing Storage
Land cost is a significant contributor to all your expenses, especially if you have bigger warehousing facilities. Smaller spaces are more cost-effective and require less budget, so if you regularly change your storage techniques and procedures, you’ll most likely save up more cash and take advantage of storing more stocks in less.
Aisles essential in any type of warehouse as these make navigation a lot easier, especially for machines and warehouse workers. The quicker a specific product can be located inside a vast warehouse, the sooner it is loaded into the truck for delivery and distribution.
Racking has got to be the best and most efficient option for inventory and storage space optimization. By using this, you will see a significant change in your warehouse operations, allowing an increase in square footage for pallets. Other than racking, you can also try roof lifting, which is the process of extending your warehouse space vertically so as to maximize storage. However, roof lifting can be costly, so you may want to stick with racking and placing enough aisles for smoother navigation.
Set Par Levels
Par levels are also known as the minimum level to which you can stock your items or goods. This should be the minimum amount of product you should have on hand at all times. Once your inventory falls below this number, then that’s the only time you can stock up and order more.
However, do keep in mind that this number shall vary based on your expected demand and how fast a particular product sells. Determining the minimum amount of your stocks will then help you systematize your product orders. Make sure to assess your par levels every now and then so as to adjust it following the current market conditions as it changes over time.
First In, First Out
FIFO stands for First In, First Out, a concept used by many companies in the warehousing industry today.
FIFO is a strategy that focuses on getting your oldest stock (first in) sold first (first out). This is especially important to consider when you’re in a business that sells perishable items. Of course, you don’t want to be holding goods and have them expire before the product sells. You also wouldn’t want non-perishables to just sit there accumulating dust and getting scratches or damages only because it takes a while before they leave the shelves and get sold.
Your workforce is the largest controllable expense item in all of your distribution center. Successful practices to improve your overall performance can significantly help lower costs in your entire facility.
One of the best things to consider when managing the workforce is taking team buildings seriously, as this can help improve productivity and efficiency. Make it a habit to take your company on annual team buildings that will help further hone their skills and build better relationships with one another.
Every improvement can greatly help in reducing all warehouse costs. However, keep in mind that these improvements and adjustments all have to come in consistently in order to also accelerate warehouse efficiency. More than anything, the best approach is having to implement a proper warehouse management system that continually monitors overall performance. Over time, each change you make shall continue to reduce costs and innovate your warehouse operations.