Downsizing to the correct size building – Cost saving strategies for manufacturers & warehouses
With a potentially fluctuating economy in the background, all businesses including manufacturing and warehouse are searching for ways to minimize their cost and increase profit at any cost. These businesses have a number of alternatives to minimize their cost, most of them might not come in handy in a hard time when an economy is going through a rough patch. In those cases, only the extreme strategies like downsizing to the correct size building can do the trick for both small and large manufacturing, warehouse or distribution businesses.
Why “downsizing to the correct size building”?
The main principal behind downsizing to the correct size building is to ensure optimum use of resources including space, manpower, machinery, inventory and so on. Experts on Lean Management have been touting for the effective use of resources including building size for a long while even though most CEOs never took them seriously. However, if your business is going through a cost-savings plan, it could be a good time to think about downsizing to the correct size warehouse and manufacturing building.
Do you really need to “right-size”?
Downsizing to the correct size building is cost-effective strategy but not all manufacturers or warehouses will benefit from it. It actually depends on the nature, size as well as operation of the business. If you have a large space you are not utilizing, you definitely need to consider downsizing. However, there are many other factors that you need to consider before you take the decision to your board. This is why it is a good idea to ask for help from consultants on this.
Actual cost and benefit of downsizing
Downsizing to the correct size building has both positive and negative sides. While it will reduce your cost, increase efficiency and increase profit in the long term, it may also cost you in the shorter run. Relocating your warehouse, manufacturing or distribution business to a new place is quite exciting bringing new energy to your business and expanding your horizons. If you can implement the downsizing with proper care and planning, you will surely benefit from downsizing to the correct size warehouse and manufacturing building – and to hold costs down, why not lease?