October 17, 2016
Best Practice Tips on Procurement and Activities to Help Reduce Warehouse Spend
The knock-on effect of not having the raw materials for your warehouse operations can result in increased warehouse spend costs to your customers and your business due to loss of time and productivity.
There are some processes you can implement into your business to help forecast the level of materials required. This then ultimately reduce your spend in the procurement supply chain.
Engaging with External Benchmarking Tools
Does your internal benchmarking process make your company’s performance appear better than it really is? By working with external benchmarking tools, you’ll get a clear, unbiased result. The benefits include access to the latest technologies. As well as gaining a competitive advantage with lower spending in managing the procurement supply chain.
Consolidate Shipments & Warehouse Operations
Working to consolidate incoming supplies and outgoing shipments. Not only will you make your freight more attractive to the big carriers. It will also result in being able to place more shipments in fast lanes. This then reduces overall freight and warehouse spend and saves valuable time.
Factor in Additional Lead-Time
To achieve the best savings for your customers and workers, access to additional lead-time is critical, aim for 48 to 72 hours. Experienced warehouse staff are able to predict and manage the flow of inventory more effectively. Whilst this doesn’t mean you need to ship inventory immediately. However, your shipper can inform the carrier about expected shipments in the coming days. Therefore creating better efficiencies in your warehouse spend and operations.
Warehouse Spend, Operations & The Cloud
Cloud-based systems offer countless benefits throughout the procurement supply chain. Procurement providers can use cloud technology to improve visibility throughout the supply chain. As well as, adapt to changes and unforeseen issues in real-time.
More Suppliers = Less Risk
As much as we don’t want to focus on them, disasters are an inherent risk in the procurement supply chain. The weather in Australia can be unpredictable and if it turns bad, obtaining raw materials can be almost impossible. One storm can cause havoc for an entire state. Your warehouse team should focus on proactive planning, e.g. exploring alternative routes and diversifying your suppliers. Investing in these practices in advance will ensure your operations continue in the event of a natural disaster.
Your business will have better efficiencies if you can reduce the costs associated with obtaining raw materials for your products. Ultimately, better profits translate into lower costs for your customers and the growth of your business. So it is in your best interest to implement best practices for the management of the procurement supply chain and warehouse spend.