Operations Expense Reduction – Managing the Pennies
Nobody needs to tell you it’s a tough business climate. Last week at NCOF, I gave a speech to 180+ people on Operations Expense Reduction – Managing the Pennies. You can access the speech on our website. Also, in working with our clients to reduce expenses, F. Curtis Barry & Company has compiled an 11-page handout, “70+ Ways to Reduce Expense, Increase Productivity and Improve Customer Service.â€
Reduce costs. Increase productivity. Improve customer service. 70+ Tips & Ideas to help your company in the following areas:
One thing that was instructive and a lot of fun at NCOF was that we got the audience to volunteer what they had implemented to reduce expenses, as well as to reveal the ROI. Here are a few of the major points:
Direct and indirect labor is 60%-65% of the cost per order plus benefits, which in many businesses were 20% or higher. Labor costs can be reduced with training programs for management, incentives, setting benchmark expectations (or engineered standards for larger companies), developing a labor budget, reducing attrition, etc.
Vendor compliance policies reduce your DC expenses and speed receipts.
Renegotiate inbound and outbound freight regularly.
Invest in bar coding to reduce inventory shrinkage and track product throughout the center.
There are benefits through slotting and directed put away from WMS systems.
Utilize methods of minimizing picker walk time including hot pick zones, pick to light, pick and pass, re-slot regularly, etc. Investigate voice picking to speed picks and improve accuracy.
Ergonomically redesign work stations for packers and returns.
There were some really creative and quick ROI solutions. Rather than talking about the doom and gloom, these managers are at work finding out where they can “reduce the pennies.â€
Call me today at 804-740-8743 to discuss how we can help you perform an operations audit, which will reduce expenses.
Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.
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