Businesses are feeling the pain of rising tariffs, fuel costs, labor shortages, supply chain disruptions and rising shipping prices. It’s no easy task finding ways to stay profitable without passing the costs on to the customer. If your competition is more affordable, your customers will go elsewhere. This is a time when you really need to know what’s going on in every corner of your business so you can find ways to trim the fat to operate more profitably.
Thanks to Amazon’s free shipping policy, all businesses have been forced to absorb shipping costs to remain competitive. Shipping can eat a huge chunk out of your profits. If your inventory is getting eaten up by waste, theft, or obsolescence, you’re business is getting hurt from all sides.
If you ship large volumes of goods every month, chances are you are overpaying for shipping. There’s plenty of room for negotiation when you know where you can save money. You can typically get a free consultation to find out how much you can save on shipping.
Working with a logistics consultant can help shed light on where you’re losing money. Deep analysis into product performance can help to identify bottlenecks, waste and shipping overages, providing you with some direction to plan.
Waste can occur in production or be caused by breakage anywhere along the line. Companies often enact lean inventory management practices to set goals to reduce waste, ideally reaching zero waste. By starting with the low hanging fruit, your business can increase profitability over time by shoring up waste that occurs in different departments. Working with the department heads for their feedback can provide helpful suggestions for making improvements. Perhaps the floor layout is causing delays between workstations. Or maybe a piece of equipment is working slower than normal. Without feedback from each area of your business, you might not know where to look for waste.
Unfortunately, theft is a problem for many businesses, but better security can go a long way in reducing it. Installing cameras at all exits will hinder employees from walking off with goods.
If rising tariffs and shipping delays are causing problems with receiving goods on time, it might be time to find a new vendor. Ideally, the best time to evaluate alternative vendors is long before they become a problem. Negotiation takes time and communication. It may be worth paying a little more for a better deal – but you may need time to work out these details in advance. If you’re having trouble with shortages, finding a vendor who is located closer to your facility may be the way to go.
These suggestions may not solve all the problems our businesses face through health crises but planning ahead for the unexpected is certainly the best approach to survive the next obstacle. If nothing else, your business will emerge stronger and more capable of enduring the hard times.
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