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Whether you are negotiating for adjustment of prices or just explaining why your warehouse exists, there are two broad areas where the warehouse can and should add value. The first is an improvement of cash flow, and the other is an improvement of service.
In the cash flow area, there are three areas where costs are reduced.
- Reduced transportation costs, both inbound and outbound. Cost reduction is achieved through improved carrier selection, better dock scheduling, and more efficient loading and unloading.
- Lower warehouse operation costs are the result of better use of labor, more efficient warehouse equipment, and better use of storage space.
- Lower inventory levels will result when management liquidates low turn or no turn SKUs. Procurement processes can be fine-tuned to increase turns of moderately active SKUs.
New service options might include multi-shift operations to allow more deliveries on same day or next day. Adding packaging operations will add value by delivering packages as well as bulk materials.
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