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Warehouse Cost Savings: How to Build a Warehouse Management Strategy Built on Efficiency

An effective warehouse management strategy can successfully reduce rework and drive warehouse cost savings. However, poor decisions and assumptions can lead to the buildup of other inefficiencies, diminishing the value of your existing warehouse management strategy. To ensure your strategy tackles the right challenges and promotes profitability, it must be built on efficiency. In must be built on these principles.

Focus on What Consumers Really Want to Drive Warehouse Cost Savings

Warehouse management strategies have a tendency to focus on what the company believes customers want, not necessarily what customers really want, reports Rob O’Byrne of Supply Chain Quarterly. Warehouse managers should review consumers’ spending habits and trends, which help the company determine which items are profitable and should be a priority in the warehouse management strategy.

Use Technology to Automate Data Capture, Analysis, and Action

To satisfy the demand for customer-demand products, an effective warehouse management strategy should also leverage the power of automation and modern technology, including Big Data and analytics, to reduce under-stocking and over-stocking. In addition, modern tech should be connected to the warehouse management system (WMS), ensuring warehouse cost savings across all warehouse operations, says FloShip.

Make Data-Based Decisions, Like Leveraging Data During Slotting Optimization

Automated data capture, analysis and action through automated systems also enables warehouse managers to make data-based decisions. In fact, today’s warehouse management strategy should use data to improve slotting optimization practices, allowing warehouses to continually adapt to the changing demands of an omnichannel supply chain.

Focus on Long-Term Strategy and Benefits, Not Just Costs

In modern warehouse management, system and platform costs are decreasing, and warehouse managers can take advantage of innovative technology solutions without significant upfront investment, provided system vendors utilize a license-based or subscription pricing model, as explained by Curt Barry of MultiChannel Merchant. However, warehouse managers should also review the long-term strategy and benefits provided by such systems, not just the initial costs.

Manage All Inventory Flows, Including Returns

All Inventory should also be managed as part of the warehouse management strategy, including returns management. Since increasing returns may allude to problems with a given product, warehouse managers can leverage increased returns information to fine-tune existing warehouse stock and ordering practices.

Incentivize Your Workforce

It is important to consider the impact of the workforce on warehouse operations, and the warehouse management strategy must include programs or other incentives to give employees something to work toward. This will boost productivity and efficiency.

Consider Third-Party Partnerships

On occasion, it may be necessary to outsource certain activities, ranging from implementation of a WMS to overall logistics management to a third-party. Depending on the unique needs of your company, and an effective warehouse management strategy may include third-party partnerships that help reduce overhead and improve operations.

Remember the Warehouse Management Strategy Must Be Adaptable

The most important way to build a warehouse management strategy on efficiency principles is simple; it must be flexible and adaptable. Omnichannel retailing is changing the landscape of warehouse management, and any strategy must be able to accommodate changes in your consumer base or supply chain partners.