ZetesMedea

Achieving cost cutting quick wins in the distribution centre

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Practical insights into common problem zones.

Over time, the way businesses use their assets evolves as market conditions change. Distribution centres provide a good example of this pattern. What used to be a relatively static place for large quantities of goods to be kept stored for extended periods, often at great cost, is now a dynamic environment.

Costs have risen at all stages in the supply chain. This means holding high stock levels when goods are not immediately required, allowing inaccurate deliveries and having higher than necessary staff costs due to labour intensive processes, are unacceptable inefficiencies.

Instead, precise quantities of goods are shipped ‘just in time’ to exactly where they are needed. Accuracy, speed, efficiency and profit are priorities and the role of the distribution centre is to facilitate movement of goods in a way that maximises these variables.

Recent research from Intermec has highlighted that across Europe, distribution centre managers share a common goal to achieve cost savings. 79% have been tasked by senior management with identifying ways to achieve so called ‘quick wins’ - through processing and shipping goods more efficiently. Intermec’s study emphasises the importance of identifying timesavings, which is reinforced through the title of their research “Every second counts”.

In Europe, where labour costs are high compared with developing economies, saving time is key to achieving cost cutting quick wins, frequently by making small, but significant process improvements and through strategic investment in collaborative technology.