How Do Warehousing and Distribution Reduce Costs?

How Do Warehousing and Distribution Reduce Costs?

Managing a warehouse and distribution can help businesses save money in several ways, keeping processes more efficient and less labor-intensive. Here are some of the specific ways you can use warehousing and distribution to lower expenses.

Have Complete Control Over Inbound and Outbound Freight

This is one of the most important factors in reducing costs and limiting profit. A consultant can assist you with competitive bidding, identifying opportunities to reduce costs without negatively impacting service levels.

Simplify Processes

Over the years, you may find that your company layers new functions over older ones that have been around for a long time. Product flow and order flow may also lose fluidity and make less sense.

You can avoid these issues by closely examining your company’s physical processes regarding order fulfillment and product flow. The fewer steps your processes have, the lower the cost.

Train Better Frontline Managers

Truly effective managers understand that everything amounts to successful execution. Managers should be able to efficiently manage every aspect of fulfillment to reduce costs, increase productivity, and improve order fulfillment quality.

Determine what your managers’ individual needs are, the level of exposure they have to other aspects of your business, and the ways you can improve their understanding of your products, customers, and vendors. You may also want to determine whether online or local training resources are ideal.

Use Third-Party Fulfillment

Third-party fulfillment (3PF) may not be ideal for everyone, but there have been many positive experiences with 3PF as a means to help reduce internal costs. For smaller companies 3PF allows management to focus on merchandising and marketing to help encourage growth.

Implement SaaS Instead of On-Site Systems

Investing in enterprise-wide systems or new order management is something that most companies only do every decade or so because of the time it takes to implement along with the overall investment. However, an SaaS subscription allows businesses to acquire new systems at reduced costs. To determine if this is right for you, you should understand the long term costs compared to the initial purchase and updating of traditional systems.

Continued Improvement

Great marketers and merchants measure everything and continue to make updates to their operations. You can do this by performing an assessment, developing a plan, setting objectives and accountability, reviewing progress, and repeating this process.

This can help ensure your business never goes stagnant and continues to develop and expand, while at the same time making costs manageable and operations more efficient.

Taking all of these into account can help ensure you get the most from your operations, with minimal risk of overspending while increasing your business’s efficiency and cost-effectiveness. You’ll see a difference when you implement one or more of these for your business.

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