There are over 400 million small businesses worldwide, and they make up a large part of the economy. Many of these businesses need storage space to manage their goods and materials. The average storage area for a small business is around 500 to 2,500 square meters. Experts estimate that warehousing can account for up to 25% of a company’s total expenses. Despite these high costs, there is often a lot of untapped potential for optimization. This article provides some ideas on how things could be done differently.
Optimize rental costs: compare price and performance
Many companies rent their storage space, which often represents a significant cost factor. Studies show that small businesses often spend up to 15% of their budget on storage space. Without comparing providers and rental options, they risk paying too much. A close analysis of the rental conditions is crucial to avoid hidden costs. Companies on a tight budget should pay particular attention to balancing price and performance.
A checklist will help you make the right decision. It includes criteria such as rental price, ancillary costs, security standards and contract duration. As with the selection of a property management company in the Philippines or elsewhere, detailed comparisons are essential. The distance between the warehouse and the company’s location also plays an important role. Long distances not only increase transport costs, but also complicate logistical planning.
It’s good to know that a warehouse in a different city or on a different continent often brings additional challenges. Logistical hurdles such as longer delivery times and increased fuel costs have a negative impact on efficiency. Customs and tax issues related to international warehouses also increase the administrative burden.
Use shipping materials efficiently: save with bulk packs
A lack of organization when it comes to shipping materials can make warehousing unnecessarily expensive. Materials such as boxes, tape and labels should be ordered in good time and in sufficient quantities. Thermal 4×6 labels, for example, are ideal for shipping because they are easy to print and are significantly cheaper in large packs. Good planning prevents bottlenecks and reduces the workload in the warehouse.
Bulk packs not only offer financial advantages, but also make it easier to organize your inventory. They create clarity and avoid the constant need to reorder small quantities. Studies show that purchasing in larger quantities can reduce material costs by up to 30%. Storage locations for these supplies should be chosen so that they are easily accessible and do not block workflows.
Good to know: digital tools such as inventory management software can help you keep track of materials. Automatic reorders avoid bottlenecks and ensure that consumables are always available. Well-labeled shelves with clear categories save time and reduce errors.
Optimize inventory: apply the just-in-time principle
Efficient warehousing requires the precise coordination of goods receipt and issue. The just-in-time (JIT) principle aims to minimize storage costs by delivering materials only when they are needed. According to a study by McKinsey, companies can reduce their inventories by up to 50% through JIT. This results in a significant reduction in warehousing costs.
Implementing JIT requires close collaboration with suppliers. Reliable supply chains are crucial to avoid delays. Modern technologies such as real-time tracking and automated ordering systems support this process.
Practical approaches for small businesses
What large companies like Toyota and Co. can do is also feasible for small companies. A key step is to select reliable suppliers who can guarantee punctual and flexible deliveries. Smaller companies often benefit from regional suppliers who offer short transport distances and fast response times. This helps to avoid unnecessary inventory.
Digital tools make it much easier to get started with the JIT system. Cloud-based platforms for inventory management enable small businesses to monitor their stock levels in real time and perform demand analyses. Automated ordering systems automatically trigger reorders when a minimum stock level is reached. This saves time and reduces the risk of overstocking or shortages.
The use of artificial intelligence in warehousing
Artificial intelligence is transforming warehousing by streamlining processes and cutting costs. In the US, 22% of logistics companies already utilize AI technologies, while another 26% plan to adopt them. A key application is demand forecasting. AI analyzes historical sales data alongside external factors such as seasonal patterns to predict future demand with precision. This helps small businesses optimize inventory levels and avoid both overstocking and shortages.
Route optimization is another area where AI excels. By factoring in real-time traffic data and weather conditions, systems can calculate the most efficient delivery routes. This leads to shorter delivery times and reduced transport expenses. AI also enhances warehouse automation. Intelligent robots can handle tasks such as picking and packing, improving efficiency and lowering error rates. Companies like Amazon have successfully integrated these innovations into their operations.
Looking ahead, AI is expected to further revolutionize the sector by enabling fully autonomous warehouses and predictive supply chain management. As technology advances, small businesses will gain access to even more affordable and sophisticated AI tools, enhancing their competitiveness in global markets.