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Storage - the easiest to reduce costs in the logistics sector

- Nov 23, 2017 -

Warehousing activities are to promote the development of production, to meet the market an indispensable part of the supply. The  cost of warehousing is easier to control and manage the cost of  logistics. With the improvement of the technical level in logistics  activities and the improvement of warehousing efficiency, the cost of  warehousing is also changing. To clearly understand the importance of warehousing in logistics  activities, existing problems, storage cost control in order to take  appropriate measures to solve the problem, reduce costs and improve  efficiency.

▌ the importance of logistics and warehousing management

① modern logistics an indispensable important part

The importance of warehousing for logistics systems can be further understood from the supply chain perspective. From  the perspective of the supply chain, the logistics process can be seen  as a series of supply and demand. When the rhythm of supply and demand  is inconsistent and the two processes can not link well, the product can  not be consumed immediately or there is demand There  is no product to meet the situation, this time need to establish  product reserves, will not be able to instant consumption of products  stored up for future needs. Supply and demand both exist in-kind flow, there are physical  quiescence, quasi-stationary state is about to be stored in kind in kind  to better meet the supply and demand of these two dynamic processes.

② ensure the quality of the goods before entering the next link

Inspection  of product quality in the storage of goods can effectively prevent  inflows of counterfeit products into the market, protect the rights and  interests of consumers, and to a certain extent, also protect the  reputation of the manufacturer. To  ensure product quality through warehousing mainly in two aspects:  First, quality inspection during the storage of goods to see whether the  goods meet the storage requirements, unqualified products mixed;  Second, during the storage of goods, try to make the product does not  occur Physical and chemical changes, minimize inventory errors.

③ ensure the smooth progress of social reproduction

The warehousing process of goods is not only the necessary guarantee  for the smooth progress of commodity circulation, but also the guarantee  for the society to be carried out in the production process.

④ speed up the circulation of goods, saving circulation costs

While  goods are in a quiescent state when they are stored in warehouses,  there will be an increase in both time and financial costs, but overall  they will not only lead to less time and financial costs, but will help Accelerate circulation, and save operating costs.

⑤ ready for the goods to enter the market

Warehousing can complete the finishing, packing, quality inspection,  sorting and other procedures before the goods enter the market, so as to  shorten the working time of subsequent links and speed up the flow of  goods.

▌ storage cost control

Storage  costs refers to the storage business in the process of storage of  goods, including loading and unloading, storage and storage, circulation  processing, send and receive items and other aspects of construction  and purchase of warehouses and other facilities consumed by the  manpower, material and financial resources and risk costs. Warehouse logistics cost management level, the entire logistics cost management is of great significance. Mainly in the following:

① to solve the difference between supply and demand time

Some  products are seasonal production, annual consumption; some products are  perennial production, seasonal consumption; some products are seasonal  production, seasonal consumption or perennial production, annual  consumption. No  matter what kind of situation, products from the production process  into the process of consumption, there is a certain period of time. The storage of goods through the process, to resolve the contradiction  between supply and demand, in time also created new benefits.

② to achieve the transfer of goods from production to consumption

Warehousing  activities can solve the contradiction between production and  consumption in terms of space, time, variety, quantity, etc., and play  the role of link and bridge between production, consumption and  connection of warehousing. It also separates the geography of production  and consumption by producers and consumers ;  Convergence of the production and consumption of goods on the time  inconsistency; adjustment of the production and consumption patterns  differences; trade load balance, reduce transportation costs. Such as mass production, FCL transportation, in the storage process for the benefit of retail and other functions.

▌ warehousing management problems and cost control content

① storage material cost management

Materials in the storage process consumed by the cushion material in storage costs account for a large proportion. The  greatest potential for reducing storage costs is to save on padding and  cover materials and labor-related expenses, to find out the cost  savings can be some of the costs, but also to ensure the quality of  materials management materials management, technological innovation and  transformation, fully go Tap the potential of equipment. In the management of storage costs should also be split,  classification management, strengthen economic accounting, prompting the  storage costs continue to decline.

② in the Treasury handling handling costs management

Material access to the warehouse mainly rely on handling operations to complete. Handling  equipment, depreciation of machinery and equipment depreciation costs,  loading and unloading costs in the warehouse accounted for the largest  proportion. Therefore, the warehousing department should first pay attention to  the economy and practicability in choosing suitable machinery and  equipment, and should prevent the practice of increasing the  depreciation of warehousing equipment unwillingly regardless of actual  needs.

③ labor costs in the storage management

The  labor costs of warehousing expenditures mainly in two aspects: First,  warehouse management staff salaries, bonuses, benefits, allowances, etc  .; second is the production of warehousing workers wages, bonuses,  allowances, benefits and so on. The  management of labor costs for warehousing should focus on minimizing  the wage expenditure of non-productive workers. Because this part of the  cost and expenditure is not directly related to the amount of  warehousing operations, labor productivity should be continuously raised  and the labor and labor cost of keeping warehousing costs should be  continuously reduced. In addition, choosing a reasonable form of labor organization and wage  form also has a significant impact on reducing labor costs.

▌ measures to reduce storage costs

Reduce storage costs to ensure the lowest total cost of logistics and  does not reduce the overall quality of service and target level under  the premise of enterprises, common measures are:

① first-in-first-out approach to reduce the risk of storage of goods. FIFO is one of the guidelines for storage management, which ensures  that the storage period of each stored item is not too long, which  reduces the risk of storage.

② improve storage density and storage capacity utilization. Its main purpose is to reduce investment in storage facilities and  improve the utilization of storage area per unit to reduce costs and  reduce land occupation.

③ using an effective storage location system to improve storage efficiency. The meaning of storage location is the location of the stored object. If the positioning system is effective, can greatly reduce the time to find, store, remove, prevent errors, easy inventory. Storage location system can take advanced computer management, but also take general human management.

④ adopt an effective way to count the inventory, improve the ease of storage operations. The  monitoring of the quantity and quality of stored materials helps to  grasp the basic situation of warehousing and helps to control the  inventory of science. In  the actual operation of a slight error, it will make the accounts do  not match, you must promptly and accurately grasp the actual storage,  check with the card often to ensure that the warehousing supplies  intact, which is manual or computer management essential. In addition, regular monitoring is an important task in detecting the status of assets held.

⑤ accelerate turnaround, improve unit storage capacity. Storage  modernization is an important issue of the static storage into dynamic  storage, fast turnover will bring a series of benefits: faster  turnaround time, high capital efficiency, cargo damage is small,  warehouse throughput increased, the cost of decline and so on. Specific practices such as the use of unit-based storage, the  establishment of rapid sorting system, is conducive to fast forward  fast, big big big.

⑥ take a variety of operations, activation of assets. Investment  in warehousing facilities and equipment can only benefit if it is fully  utilized. If it can not be put into use or is only used inefficiently,  it will only incur increased costs. Warehousing enterprises should make timely decisions, take a variety  of management methods such as renting, borrowing and selling to activate  these assets and improve the utilization of assets and equipment.

⑦ strengthen labor management. Wages  are an important part of warehousing costs. The rational use of labor  force is the basic principle of guarding staff wages. My country is a country with labor advantages. It is a reasonable choice to use more labor because wages are lower. However, it is also an important aspect of cost management that  effective management of labor is to prevent people from floating on the  boat.

⑧ reduce operating costs. The  cost of operation and management is the expenses and costs of the  business activities and management activities of the enterprises,  including management fees, business expenses and transaction costs. To strengthen such cost management, reduce unnecessary expenses, but also to reduce costs. When the cost of operating and management expenses often can not  produce direct benefits and returns, and can not be completely canceled  to strengthen management is necessary.

Warehousing activities are to promote the development of production, to meet the market an indispensable part of the supply. Warehousing  costs are easier to control and manage in logistics costs. With the  improvement of the technical level in logistics activities and the  improvement of warehousing efficiency, the storage cost is also  changing. To  clearly understand the importance of warehousing in logistics  activities, existing problems, storage cost control in order to take  appropriate measures to solve the problem, reduce costs and improve  efficiency.

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