Waste is an inevitable product when you sell consumer goods. Reducing waste is good for your bottom line in two ways: one, you prevent unnecessary costs, and two, you boost brand recognition because consumers prefer businesses that aim to reduce their impact on the environment.
But how do you prevent wastage in your inventory? Consider the following scenarios your business may encounter, and apply the corresponding solutions:
Scenario: You have too much perishable inventory.
Over ordering goods is already bad; over ordering goods that come with an expiration date is even worse. An excess of goods in the warehouse equals cash tied up in inventory. This also means that you’ll have limited cashflow and you may have to deal with obsolete inventory—unless a big order comes in and you immediately distribute all the over ordered goods to the stores.
Prevent an excess of inventory by making sure you have sufficient reorder points. This means implementing adequate warehouse management. Your business provides the best for clients when, reverselogix.com shares, you have warehousing that’s efficient, flexible, and responsive.
Scenario: An old plumbing system in your warehouse leads to a leak.
You have to contain leaks before they damage your goods, and create wastage. To stop leaks from reaching products, you need the right equipment: containers of different sizes and utility tools that will prevent liquids from seeping to the front-of-house. Also, note that prevention is critical, so always make sure you have your entire place scheduled for regular maintenance.
Scenario: You have malfunctioning equipment.
Your resources, not just your products, are also susceptible to wastage. In this case, malfunctioning equipment could mean that you’re wasting more energy to power an equipment just to get it to work; HVAC systems, for example, can consume 40% of a building’s electricity. Something as simple as installing programmable thermostats can help save you $180 a month on bills. You can also prevent malfunctioning equipment in your warehouse or stores through maintenance.
Waste is inevitable in businesses that sell consumer goods. But this doesn’t mean you should let it happen. Take action before excessive inventory, leaks, and poor equipment affect your bottom line.