How to Reduce Costs
Every company has fixed costs and wages, rent, rates, and lease for capital equipment such as trucks, forklifts and so on.
The accountants tell us to minimize these expenses without compromising productivity or efficiency.
Most companies have peaks and troughs in their business depending on market trends, seasons, selling cycles and the whims of their clients.
Traditionally the trend has been to gear up to cope with maximum requirements, and to absorb over capacity during the quiet times.
In Europe most companies cannot afford the luxury of running warehousing facilities at less that 100% capacity and it makes far greater economic sense for them to pay a third party service provider as and when space is required.
It is a natural extension of this to get the same service provider to:
The distributor of a range of low value kitchenware has the following overheads:
Wages: 1.5 men $39,000
Rent 7000 sq/ft at $6.50 per ft $45,500
Rates $ 6,000
R&M $ 2,500
Hoist $ 5,000
Overheads / insurance etc. $15,000
We provide exactly the same service for $69,900 per annum a saving of $43,100 a year
How can we do this we?
We already have the space, resources, equipment and men. Economies of Scale enable us to be very competitive.