Modern supply chains are more intricate and widespread than ever which can lead to risks and money loss at each stage. In recent years, companies are battling with cost saving as powerhouses such as Amazon are putting pressure on businesses to lower costs while still delivering quickly and efficiently.

Warehousing

In order to reduce overall costs, warehousing and storage have to be fully optimized as part of a larger supply chain strategy. To reduce costs, companies can focus on its operations, for example: optimize space, reduce damage, minimize packaging and much more. A solution to optimize space is by having multi-client facilities. This allows for costs to be shared across multiple companies and you only pay for the area that you use. This also means you won't need to hire your own employees.

Technology

Technology is a huge investment for most companies that usually pays off in the long run. As of March 2018, the annual labor expenses for a warehouse with 100 employees were at least $3.7 million. Considering this, making an investment into automating a warehouse can save on annual costs. Automating a warehouse can improve efficiency, streamline processes and reduce labor costs.

Even small improvements can be made using technology, for example, saving on energy costs in warehouses or storage units by using movement sensor lights and investing in technology such as automation that can work in the dark.

Improving product and inventory management will allow for a more streamlined supply chain. Companies can oversee any challenges or areas that are resulting in profit loss.

In summary, reducing costs is a huge operation that every company is tackling especially when it comes to it's supply chain. It is important to note that trying to save money as a company calls for focused and knowledgeable leadership that understands the end goal when considering supply chain management.