As businesses look for further ways to save money in a tough economy, many are turning to lean storage. While changing the warehousing process as many companies have done it for years may cause temporary growing pains, it will save money and cut costs in the long run. A facility that has only as much inventory in stock as can be used or sold in a very short time is an efficient one. For many warehouse facilities, there are six innovative ways to save a company money through lean storage practices.

Inventory

The greatest savings a company will realize when it converts to lean storage practices is that fewer items will sit unused in warehouse storage. As a result, less money will be spent unnecessarily on items that will never be sold. Although it requires a tremendous amount of organization and know-how, the lean concept can be successfully implemented for cost efficiency and increased profit.

Payroll

One of the drawbacks to cutting back on storage and inventory is the cutback on personnel. This may cause layoffs. Although a business may save money on payroll, it is a stressful time for the employer and employees alike. This may be a good opportunity for those employees to be shifted to vacant positions elsewhere within the corporation.

Space

The less inventory a company keeps on hand, less room is needed to store it. As a result, the company may be able to reduce the amount of storage or warehouse room it needs. Rather than using a number of large buildings, fewer buildings can be used. For businesses that rent warehouse facilities, this is an instant cost savings. For a facility that owns the space, it may be able to convert the excess space into offices for other departments.

Shipping

As less merchandise is brought into the facility, the shipping costs to receive product will drop significantly. Most deliveries are paid according to weight. This, in turn, lowers the amount of money it takes to provide merchandise for the necessary orders. Although the outgoing shipping costs are still the same, the net savings in shipping costs is significant.

Automation

Converting to a lean storage process is a good time to convert the manner in which a company handles tracking of merchandise and order picking. For those that have not yet changed over to complete automation, this is a good time to do so. Reducing the amount of paper forms in the facility will cut down on supply costs in paper and having them shipped. It will also help reduce the amount of time it takes to send paperwork to customers and manufacturers. When the process is automated, it expedites orders and creates more efficiency. Satisfied customers that can receive orders faster will likely place more of them.

Diversify

Warehouses and storage facilities that serve as a middle man for other divisions of their corporations can use their leftover space and personnel to diversify into other types of production. Lean storage facilities are beneficial to other companies, as well. Additionally, warehouse space can be rented out to other entrepreneurs who have not yet discovered the money-saving efficiency of lean storage.