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To reduce storage costs, these 6 tips are very practical!

by:VIPUTRANS     2020-09-05
Although warehousing costs are an important part of logistics costs, there is a contradiction between warehousing costs and the costs of other factors in logistics, such as transportation costs and distribution costs. Therefore, reducing warehouse costs must be done on the premise that the overall service quality of the enterprise is not reduced. Common measures to reduce storage costs include the following:

1. Reduce storage risks

The longer the storage time of materials, the greater the storage risk. The most effective way to reduce storage risk is to adopt the 'first in, first out' principle to place all storage materials in order, or to rotate storage materials. , Thereby reducing the storage time of materials and reducing losses.

2. Improve warehouse capacity utilization
The methods to improve storage capacity utilization include increasing storage density and accelerating material surroundings. Increasing storage density can increase the utilization of unit storage area to reduce costs and reduce storage equipment investment, mainly including increasing storage height, reducing internal channels, and dense shelves Several methods.

3. Improve storage efficiency
If the storage positioning system operates efficiently, it can greatly save the time of searching, storing and taking out, saving a lot of materialized labor and living labor, and can prevent errors and facilitate inventory.

4. Improve the accuracy of warehousing operations
Use advanced management models such as zero inventory for warehouse management, keep the inventory in a circulation and turnover state, and realize the accuracy and minimization of inventory.

5. Determine a reasonable storage volume

The entire process of resources from procurement to production to customers needs to go through several stages. Almost every stage needs to be stored. By analyzing the optimal storage volume of each logistics link from raw materials, semi-finished products, finished products, etc. The speed of replenishing inventory, etc., minimizes inventory levels, minimizes storage waste, and minimizes space occupation.

6. Optimize warehouse layout
Collecting scattered storage points in the past for unified management and direct distribution in the form of regions is conducive to optimizing the storage layout.

On the other hand, maintaining and controlling inventory management through lean principles is the main trend in warehousing. In all areas of warehouses and distribution centers, these practices play a vital role in reducing storage costs. Through continuous improvement and commitment to lean warehousing, including just-in-time inventory management, warehouse managers can achieve significant reductions in warehousing costs. These declines are mainly achieved by understanding the best advantages of effective inventory management and lean principles.

1) Effective inventory management reduces intangible waste

Time, effort, opportunity cost and space affect the overall cost of the warehouse. Spending too much time on picking labels can lead to lower profits, and unnecessary repetitive walking of employees can cause early fatigue and reduce order completion rates. At the same time, redoing and returns are consuming profits.

2) Optimizing the product process is conducive to reducing warehouse costs

While considering product processes, it is important to remember how individual product processes affect storage costs. The sudden picking label, called 'wave', may be a bit more vivid, and it will cause workers to have good and bad attitudes. Labor costs soar during intermittent periods and become more and more expensive during peak periods. Therefore, proper inventory control can solve this problem.

3) Lean principles require the joint efforts of warehouse employees

Achieving a reduction in storage costs must also consider lost opportunities in the warehouse. For example, is there a standard system to manage storage locations in appropriate locations or rectify warehouse product storage? If not, the cost may rise. However, storage optimization is not a simple task.
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