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Shipping and Transportation are a Hidden Cost of Ordering Excess Inventory

Business owners who tend to have too much inventory in their warehouse aren’t just paying for the cost of those items. Another side effect of carrying excess inventory is paying a high price to transport your items to the warehouse.

When you have more items than you need in your warehouse you are not only paying to store those items, you are also paying to have those items shipped to you. If you have too much inventory in your warehouse, you have paid more than you probably realize to get those items shipped to your warehouse. For example, you have paid for:

  • The cost of shipping the items
  • The driver’s time
  • The gas and wear and tear for the truck
  • The cost of labor to receive the shipment, check it, scan it, and unload it
  • The cost to store the items

Now multiply those costs by the excess number of items that you have sitting in your warehouse and you can see how quickly the transportation costs add up. No business owner can totally control outside costs like the cost of gas, the cost of labor, or the external factors that can create higher cost to ship, however exercising better control of existing inventory and eliminating unnecessary shipments can help lower costs.

How a Warehouse Management System Helps Manage Transportation Costs

Making the switch to an automated warehouse management system can reduce your expenses and reduce the number of items that you are having shipped to your warehouse so that you are not paying out of pocket costs to maintain a warehouse full of stuff that you don’t need. Inventory updates in real-time eliminate the need for guesswork and keeping your inventory over-full. Instead of having to order more items than you need just to make sure you have enough, you can maintain the stock levels you need to meet demand without overstuffing your warehouse and increasing your costs by paying higher transportation fees to get items you don’t actually need.

A warehouse management system that streamlines your ordering and fulfillment services will make it possible to replenish stock on a rotating basis which will ultimately save you money and build a better relationship with customers. When you have an efficient warehouse management system you won’t need to charge more for shipping or struggle to keep your inventory level at manageable levels. Fewer shipments will keep your transportation and shipping costs down without leaving your warehouse short of stock. By using an automated warehouse management system you won’t be taking on extra costs for transportation and storage or keeping a warehouse full of items that you don’t need.

Automated Warehouse Management System for Macola and SAP Business One

Ready to get started with an automated warehouse management system? WiSys Agility solutions have been designed to achieve efficient Warehouse Management, Supply Chain Management and Inventory Management. Contact us to learn more.