If you are looking for reducing costs and increasing profits in your business, you are at the right place. According to the CSCMP State of Logistics Report of 2015, logistics make up around 8% of the GDP. You can focus on a few of the basic parts of your business to reduce logistics costs.
How much labour do you have in your warehouse? And, how much of it is actually needed? Find out the answers to these two questions and you will realize where you need to reduce on your costs. There are many Labour Management Software systems that can manage work in your warehouse. Utilize projects that automate repetitive tasks like light or voice directed picking and robotics. This will reduce overhead costs and you will require fewer staff to work for you. Also, offer incentive programs to your employees in order to increase productivity.
Systems and technology costs
You must focus on having a warehouse management system (WMS), which is a software application that can support day-to-day operations in your warehouse like tracking inventory levels and stock locations. Every task including automatic cycle counting, maintaining location control, product slotting, having SKUs near shipping, etc. help in reducing costs. Robotics is another emerging trend that will help in removing inefficiencies through strategic mindsets, thus reducing costs. Eliminate all that adds to return stock or failed or slow-moving inventory, which causes usage of additional space in the warehouse.
How often do you check on the maintenance of your equipment? Maybe not very often because maintenance means additional costs right? But, this is where your thought misguides you. In order to save yourself from bigger losses later, it is essential that you keep regular maintenance checks on all your equipment. Preventative maintenance, as it is called, keeps a regular check on your equipment while it is still working efficiently so that it has lesser likelihood of failing and does not break down unexpectedly. If you have a breakdown in the middle of a job, and you try fixing the issue, it will cost you in man hours, customer service and maybe accidents too!
It is vital that every shipper and logistics provider understands the safety considerations and rules of OSHA. You need to ensure secure and safe working operations in your warehouse or you will be liable to OSHA fines. These fines can add to your costs unnecessarily. OSHA can also shut down your operation if there are too many safety issues in your warehouse. So, be very careful when it comes to safety. You can also hire a Safety Manager who can take responsibility for all kinds of safety.
You must collaborate and partner with suppliers to reduce costs. ‘How?’ you may wonder. What you must do is create an association of buyers that include your client and their multiple suppliers. This can soak up direct logistics costs if these buyers purchase required logistics supplies in greater quantities that will automatically reduce costs.
The per-order cost of logistics support must be kept low in order to have satisfied customers. Move farther beyond the expectations of customers so that you can increase the number of orders and clients. This keeps the business rising up and spreads out the burden of logistics cost reduction.
Focusing on all the above mentioned elements and having an automated cost-effective transportation and logistics system, you can have improved strategies to reduce costs and increase customer service levels. This will lead you to improvement in your processes and help you become the top logistics service provider in India, just like Jayem Logistics is today.