Warehousing involves more than storing items intended for a future sale. It is a significant part of the whole supply-chain process. Errors in its systems can mean a decline in efficiency and productivity. It will then later translate to not only lower sales but also high inventory costs and even customer loss.
1. Higher Customer Expectations
Customers these days have never been more empowered and entitled. They know that they deserve fast and affordable services. They also don’t have second thoughts about turning away from a company that cannot meet their expectations.
A 2016 McKinsey research pointed out how consumers not only want same-day delivery but were also willing to pay a premium for it. In fact, 5% would spend more if a timed and reliable delivery while 2% would shell out more money if they could choose instant delivery.
This increasing demand presents several issues
First, companies might have to consider setting up different fulfilment facilities, which will be within or close to where their target market is.
Growing businesses might need to rent a bigger space to accommodate a higher quantity of inventory, ready for processing and shipping at any time.
With the increased inventory, they have to either hire more people, which means higher labour costs, or develop a more efficient tracking and fulfilment system.
2. Real Estate
Warehouses look unglamorous, but they command some of the highest real estate prices in the world. In 2012, three of the 10 of the most expensive cities for logistics rental were in Australia. These were Sydney, Brisbane, and Perth.
The country’s capital back then already cost nearly $13 per square feet annually. Imagine the possible cost today now that the country’s economy is booming and logistics has never been more in demand.
3. Labour Shortage
In 2017, the Transport and Logistics Industry Reference Committee found that more than 87% of employers already reported a skills shortage over the last 12 months. Some of the jobs that needed people were trucking, logistics supervision, and warehouse staffing.
The lack of labour does not only decrease productivity, but it usually increases employee costs. Companies might have to spend more to keep their top talents and reduce attrition rates.
How Pallet Storage Can Help
There’s no doubt that these issues need solutions as soon as possible, but they don’t need to be complicated. Take, for instance, pallet storage. Pallets come in different forms and sizes. Some of them can be stackable while holding many similar items in one container. They are advantageous in warehouses where space is a premium.
The cages can be grid-like, so they can protect the inventory while allowing for easy checking and tracking of the items. When it comes to speedy delivery, they can make loading the goods easier and faster. They are also easy to integrate into automated processes, which increases efficiency and reduces the dependency on additional labour.
When faced with challenges, businesses often become creative. When it comes to these logistics problems, this creativity can be a combination of old-school options such as pallets and technology like automation.