Generating an 8.4% Saving in Storage Costs using On Demand Warehousing: A Strategic Approach for Retail Manufacturers and Brands

In today’s hyper-competitive retail landscape, optimising operational efficiency and reducing costs are paramount to staying ahead of the competition. One area that offers significant potential for cost savings is warehouse management. By adopting a strategic approach to on-demand warehousing, retail manufacturers and brands can unlock substantial savings while maintaining operational agility.

In fact, through careful analysis of a standard warehouse operation, our modelling demonstrates through harnessing on-demand warehousing solutions can result in an impressive 8.4% reduction in warehouse costs per year. Let’s delve deeper into how this can be achieved and the benefits it brings.

Optimised Permanent Warehouse Capacity:

Traditional warehouse setups often involve maintaining large, fixed-footprint facilities to accommodate both regular and peak storage needs. However, this approach can lead to underutilisation of space during non-peak periods, resulting in significant expenditure for empty space. By optimising to the lower modal average requirement the permanent warehouse operates at maximised capacity and efficiency for longer periods. Strategic short term on-demand capacity can then be used for the short peak requirements, resulting in retailers optimising space usage and minimising costs.

Reducing Resource and Overhead Expenses:

Operating a large permanent warehouse involves a commitment to significant overhead expenses: rent, utilities, insurance, and maintenance, in addition to resource costs such as employees and MHE. By embracing on-demand warehousing, companies can significantly reduce these costs year round by operating a smaller warehouse. The peaks can then be managed through leveraging a network of shared warehousing providers, utilising overflow warehouses also ensures that costly temporary agency staff are not needed to be employed.

Seamless Overflow Management during Peak Periods:

Peak seasons or sudden surges in demand can put significant strain on existing warehouse capacities, leading to bottlenecks and operational inefficiencies. On-demand warehousing allows for seamless overflow management by swiftly shifting excess and bulk inventory to dedicated overflow warehouses during peak periods. This flexibility ensures that your operations can scale up to meet increased demand without incurring the costs associated with maintaining large, underutilised spaces throughout the year.

Enhanced Scalability and Business Agility:

The dynamic nature of the retail industry demands adaptability and agility, which has become increasingly prominent in recent years. It’s difficult to predict sales trends resulting in volatile storage needs, raising the question of why brands would pay for capacity that they cannot predict. On-demand warehousing offers the flexibility needed to scale operations up or down quickly in response to market fluctuations, without the need for long-term commitments or capital investments. This scalability not only enables cost savings but also empowers retailers to capitalise on new opportunities and swiftly respond to changing customer demands.

Conclusion:

With the opportunity to save 8.4% on your storage costs, with On Demand Warehousing you can achieve both short-term cost savings and long-term success. Working with EV Cargo on your On Demand Warehousing solutions provides you with a simple process, where you can deal with one contact to manage your overflow storage in the most effective way, all underpinned by our market leading technology.

To find out more about EV Cargo’s On-Demand Warehousing service, click here.