Rents for prime distribution space on the rise

Strong consumer confidence leads the warehouse charge.

Strong consumer confidence leads the warehouse charge.

More consumers are returning to the stores thanks in part to economic confidence. Retailers have found their material handling carts filled with goods to help meet consumer demand, as more people loosen their purse strings. However, it’s important to make sure you’re keeping a close look at your finances, as storing all of those goods could be costly.

According to Modern Materials Handling, a strong economic outlook has caused rents for distribution centers for both physical and online retail ventures to rise. The news provider is quick to point out that this is mostly for prime spaces, which are in the best locations and have the top of the line facilities.

The news provider reports that this is a positive sign for an industry marred by the recession nearly a decade ago, which has been in recover for the past six years. However, confidence and demand have led to an increase in cost for space.

There’s certainly a demand for the space, with JOC.com reporting that vacancy rates for warehouses and distribution centers have been dropping, indicating that operations are taking advantage of the spaces currently on the market. As sales improve, that provides more resources to necessitate a space purchase.

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It’s not too early to think about the holiday shopping season

You need skilled workers to fill your supply chain needs. Plan ahead.

You need skilled workers to fill your supply chain needs. Plan ahead.

It may be mid-summer, but that doesn’t mean that retailers are forgetting about the holiday season looming around the corner. With the holiday shopping season happening earlier every year, it behooves retailers to start their plans as early as possible so they can meet customer demand while not stretching their employees too thin.

Multichannel Merchant reports that returns during the holiday season are one of the biggest drivers to a business, but e-commerce companies struggle with making the transactions quickly while looking into whether the item is resalable or it has become a sunk cost. The amount of products being brought in for returns on material handling carts matter, and the news provider suggests trying to identify the costs associated with returns as early as possible so you can prepare your business’s finances.

You also want to make sure the inventory being brought in on material handling equipment is not too much. The National Real Estate Investor reports that retailers will commonly order more inventory than they can sell in an effort to prepare for consumer demand, which ultimately hurts their bottom line when they’re stuck with excess inventory they weren’t planning for in their initial forecast.

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Small businesses need to keep control of their inventory

Be smart about inventory levels.

Be smart about inventory levels.

Dealing with inventory as a small business may not be intuitive to many. Leaving warehouse management to the e-commerce giants such as Amazon can seem like a good idea, but properly inventory management helps ensure you get the most out of your inventory, and you’re not caught off-guard with a sunk cost because you didn’t estimate the shelf life.

Digital Commerce 360 reports that nearly half of all small businesses do not have an advanced system when it comes to monitoring what’s entering and exiting their warehouse on material handling carts. At most, they might use a manual process such as a spreadsheet to try and keep track. But that can create room for error, particularly as customer demand can create an unpredicted backlog and shelf life could cause inventory to go bad if it’s not sold.

The Huffington Post reports that proper inventory management should be a focus for all small businesses, as owners try to make sure they can keep up with demand while eliminating the chance of having a sunk cost of unsellable goods. By scanning and tracking every item that enters the warehouse, you can get a better picture of what should be made priority.

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Stay on track of product demand both in-store and online

Be smart about inventory levels.

Be smart about inventory levels.

The footwear industry relies heavily on in-store sales, as customers frequently want to try on the shoes before they purchase. This means that material handling carts filled with inventory are frequently bringing products from the warehouse to store backrooms to meet customer demand where they are.

According to Footwear News, it’s important to have increased visibility into inventories not only in the back room and warehouse, but also at the front of the store, as retail managers can better track demand of certain styles and order appropriately. It’s critical that inventory managers have a pulse on what’s selling and what needs more attention, as it can ultimately help a company’s bottom line. If your business also has an online component, be sure to track what styles are selling fast online versus in the store and see if there are any patterns or discrepancies.

You also need to make sure you’re ordering the right amount. According to Success, retailers could be tempted to order in bulk, because they’ll reduce the amount of cost per item from the distributor, but that could leave you susceptible to having a sunk cost of inventory you can’t sell. That’s why tracking demand for items is so important.

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Smart scanning inventory practices

Proper scanning can help with inventory management.

Proper scanning can help with inventory management.

When you’re bringing new inventory into your warehouse on material handling carts, you need to make sure you’re properly tracking what is going on and off the shelves. It’s critical to have good inventory control, otherwise you could end up with sunk costs from lost inventory.

Modern Materials Handling reports that one way to keep track of your inventory is to look into what barcode system works for you. While 1D barcodes, known as traditional linear, have a limited facts, 2D barcodes, or two-dimensional, can have thousands of characters related to the product, spelling out the date it in your warehouse and the day it needs to be shipped out. This is incredibly important for warehouse managers who have buildings with a high turnover.

Additionally, these kinds of barcodes can be particularly useful to businesses that handle perishable goods. Because perishable goods can cause for a major loss in your bottom line if it expires before you can sell it.

The Small Business Chronicle reports that perishable goods inventory can be difficult to track, because there might be no value from one reporting period to another. The news provider suggests having automatic inventory replenishment, so whenever you’re scanning, if you see levels dropping, you’re able to restock quickly.

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Always be looking for top talent, even when you’re not immediately hiring

You need skilled workers to fill your supply chain needs. Plan ahead.

You need skilled workers to fill your supply chain needs. Plan ahead.

Running a supply chain efficiently means you need to hire the top talent who are well-versed in using material handling equipment and understand how to boost production by working efficiently. However, many employers are struggling as their workforce ages and they are unable to find enough talent to replace them.

Always being aware of what employee talent shortages you may face in the future in can help with your overall supply chain planning, according to Modern Materials Handling. The news provider recommends conducting routine workforce planning studies so you can identify skills gaps where they may occur and try to start your recruitment early, so you’re never caught off guard when losing an employee, which could affect your overall production.

Supply Chain 24/7 reports that managers of some of the world’s largest supply chains have been bracing for a talent shortage, as complex operations means that only people with certain skill sets will be able to fill the roles. However, individuals who have the skills necessary to work in supply chains will frequently move to other industries, so it’s important to work on branding the supply chain as a viable employment and option competitive pay and benefits, which are needed to attract top talent.

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Rise of ecommerce has companies trying to better the return process

Do you find your business bringing in a lot of returns? Make sure it's a selling point to customers.

Do you find your business bringing in a lot of returns? Make sure it’s a selling point to customers.

Thanks to the rise of ecommerce shopping, warehouse managers are finding they need to think backwards in customer satisfaction. While returns used to make their way through a store back to the warehouse, more customers are now simply mailing them directly, and material handling carts are filled with returnable items that either need to be discarded or placed back within the inventory.

Supply Chain Dive reports that many companies are making returns so easy that it has become their competitive advantage to customers. With ecommerce making it easier than ever to find competing products, businesses are looking for unique ways to set themselves apart and get market share. Some of the ways companies are trying to reduce the hassle are actually letting customers keep small-ticket, low-cost items and still getting a full refund or replacement, since going through the entire inventory process may be more costly than simply replacing the item.

If you have a strong ecommerce business, you need to make sure you have an adequate way to quickly process returns in order to keep your customers happy. According to N Channel, online retailers are three times more likely to process a return than a brick-and-mortar business, with 65 percent of customers reporting they were happy with their initial purchases.

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Warehouse demand grows as availability gets tighter

Material handling equipment can help keep your warehouse running efficiently in both space and time.

Material handling equipment can help keep your warehouse running efficiently in both space and time.

Warehousing space has become a hot commodity as companies are increasing their omnichannel presence and trying to fulfill both customer needs in store and online. However, this has caused the market to see a demand higher than anticipated, and a lot of businesses have had to get creative with how they utilize their space.

According to The Real Deal, warehouse space availability dropped to 7.2 percent during the second quarter of this year. The news provider reports that space has not been this tight since the dot com boom in 2000. As more companies are trying to accomodate e-commerce orders, they’re trying to purchase more warehouse space in an effort to fulfill orders quickly from various locations.

However, this demand has caused prices for space to increase dramatically, according to the news source. This could incentivize businesses to make more of an effort to use the space they currently have efficiently.

Multichannel Merchant suggests warehouse managers use material handling equipment to move their operations up. By stacking inventory and taking advantage of vertical space, warehouses reduce their overall floor capacity, allowing staff to store more inventory in the space they already have, negating the need for adding an additional warehouse to the business.

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More managers are investing in material handling equipment

Use material handling equipment to stay productive.

Use material handling equipment to stay productive.

When working in the material handling industry, efficiency is key. On a global level, labor costs are on the rise, and there are certain areas that are really struggling to find qualified talent to join their ranks. As a result, many managers are investing in more material handling equipment in an effort to keep operations running smoothly and efficiently, hopefully saving on costs.

According to Supply & Demand Chain Executive, more managers are expected to invest in material handling equipment, as it’s been steadily growing by 5.5 percent each year. The news provider reports that the market will reach $190 billion by 2024.

Material handling equipment is a great way to make operations more efficient. According to Supply Chain 24/7, equipment such as bins can particularly come in handy when trying to quickly fulfill orders. Movable bins allow workers to put a group of items together, like if it is similar inventory or it is all going to the same delivery area. Bins can also come in handy when trying to fulfill items in the store, as it allows workers to take all of the inventory and roll it out to the shelves for restocking or an inventory change over.

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Organization is key in a shifting retail world

E-commerce has caused retailers to change.

E-commerce has caused retailers to change.

Have you been adopting your warehouse to mimic the changing tides of retail? While having stockrooms in the back filled with inventory was once enough for brick-and-mortar operations, in order to stay competitive, there needs to be an e-commerce component to any retail business. This means that warehouse workers need to pay special attention to the inventory they’re bringing in on their material handling carts, as they could be putting goods in the wrong distribution channel.

ZDNet reports that retailers have had to shift their strategies from years’ past as more consumers are looking for an on-demand shopping experience that doesn’t require them to leave the house. However, that doesn’t mean that brick-and-mortar operations are giving up. The news provider reports that many companies are trying to improve their in-store experiences so customers will continue to make the journey to the store.

Shopify reports the key to a successful business is having a hand in proper inventory management. Be sure to monitor all of the inventory that either comes through for online order fulfillment and the stockroom. See what’s moving and what needs extra support. This can help you strategize so you don’t end up with a sunk cost of dead stock.

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