As tax time arrives, many companies will analyze operating budgets and generate projections accordingly. Which leaves us with the exercise: What can we do to reduce overhead, or how can we reduce handling costs?
The good news is that there are many ways to achieve these goals. Optimizing space, preventing damage, managing space, or investing in technology are just a few of the many steps you can take to reduce inventory management costs. Here are five ways you can cut unnecessary expenses from your operating budget.
1. Make the most of your space.
The basic rule here is to work with what you have. Optimizing space means, as the name implies, using the resources you have at your disposal in a way that maximizes the space you have. One way to do this is to take a look at your racking systems, as well as the overall floor plan of the facility. Racks and shelving should be designed to make the best use of the height of the warehouse. In addition, evaluation of the pallet storage method should also be conducted on an ongoing basis.
Unused storage space could be the culprit for increased costs.}
2. Damage prevention.
Start with safe handling and proper maneuvering of equipment in storage areas. Preventing damage to raw materials, materials and finished products themselves is an excellent way to reduce overall costs. Much of this can start with implementing and following safe and effective practices.
3. Practice good storage conditions.
Based on the first point: space optimization, but considering the factor of reducing environments that could deteriorate and destroy your inventory. Good storage conditions are more than just efficient product storage; they are about creating an environment focused on the long-term use of inventory. In particular, humid environments can cause a variety of problems for any product. Moisture contributes to corrosion and rust. This is especially important for any perishable item.
4. Listen to what your employees have to say.
Communication is the backbone of any successful business or process. Therefore, listening to your employees can offer you a different view than your own on how to reduce overall costs. Your colleagues and partners are your eyes and ears, they can easily spot and conceptualize the right measures to help reduce costs.
5. Invest in new technologies.
While many technologies may seem like a luxury, they can be essential to any inventory management initiative. An initial investment can pay off in the long run.
Significant productivity gains or energy savings are key benefits of replacing old, obsolete equipment with new technologies.
Good inventory management not only saves you considerable storage costs but also allows you to better preserve your products.
By putting these recommendations into practice, you can achieve your goal of reducing inventory management costs, most of which do not require capital investment. We hope that these recommendations can be applied in your company and the results will be favorable.