It is no secret that one of the primary purposes of a business is to generate profit. When it comes to generating profits, there are two main approaches- increasing revenue and reducing costs. It is by striking a balance between the two that businesses can grow their profit margin in the long run. While increasing revenue may usually be restricted to a select few areas of the organization, cutting costs is almost always possible in all departments. With some extra observation and strategizing, the use of resources can be made more efficient in different business departments to cut back on the expenses. These small cutbacks eventually pool in to make a bigger cut in the overall expenses of the business and help enhance the profits.

One of the segments where costs can be cut is the logistics and supply chain. Often, due to inefficient use of resources in this sector, wastage occurs and adds to not only expenditure in terms of money but also time. Thus, this sector serves as an excellent opportunity for the cost-cutting motive.

With a little extra effort and time, a more efficient plan can be devised to optimize the utilization of the ware housing area

However, it must be noted that before trying to contract the costs, due time should be devoted to finding and understanding the areas where the cost cut is to be made. This is a crucial step as it will prevent any possible blunders and can even contribute to enhancing returns.

Below we have compiled a list of 5 ways in which logistics and supply chain costs can be shrunk in order to handle warehouse business-
1)Automation of processes- With recent technological advancements as well as the necessitation of digitalization of work due to the pandemic, automation is the fast picking trend in the logistics sector. The proper employment of latest technology in the working of the sector has not only made its functions more efficient but has also contributed to Research and Development.

Having automation and tech introduced in the operations of a warehouse can help to keep track of daily activities as well as the safety of the stock. It can also help customers and managers to track deliveries, thereby reducing the risk of theft and losses. In this way, automation of processes can largely contribute to cutting costs of maintaining warehouses and their stock.

2)Space Optimization- A large chunk of warehousing costs is the rent paid for the premises. With a little extra effort and time, a more efficient plan can be devised to optimize the utilization of the warehousing area. By assessing the scope of improvement in the way the stock is stored, the actual area needs can be evaluated. There is a good possibility that the amount of space actually needed is less than what you have right now. This can help cut down on the rent and maintenance costs of the place.

3)Identifying and removing the possibility of thefts-The warehouse usually deals in overwhelming quantities of various types of stock. At any given point in the warehousing process, theft is a possibility. As common a possibility as it is, theft can be tricky to pinpoint in a warehousing situation as inventory records not tallying could also be because of other factors such as mistakes in records, misplacing of inventory, etc. However, if the records constantly show gaps between stock and sale levels and other telltale signs of theft are found, it must be looked into and solved immediately to prevent loss from theft.

4)Efficient slotting-Effective slotting can help augment the productiveness and proficiency of the warehouse and help save time and costs. Slotting involves systematic classification and arrangement of inventory in the warehouse. It is only natural that an optimally slotted warehouse will refine the flow of stock, reduce loss or damage costs and boost productivity. Apart from these in-house benefits, it can also help the business have an edge over its competitors by offering better and timely service.

5)Cross Docking-Cross docking refers to the process of eliminating middlemen from the delivery process and making direct deliveries to the customer. This one change has miscellaneous benefits in the form of saved time, expenses, storage space, and labor costs. Introduction of cross docking in logistics is gaining popularity, especially in pandemic times as the availability of resources is already experiencing a strain. In such a scenario, these multifaceted benefits come in handy for every business looking to enhance efficiency.

This concludes our list of the top few pointers that can help reduce costs and losses in a warehousing situation. Naturally, it is important to stay atop all of them to ensure that the stability or growth of the business is not drastically affected by minor faults or negligence. Pointing out areas of improvement and taking measures in a timely fashion can spell out significant gains for businesses.