A dedicated warehouse operation of 2,000m2 was costing client $3.4M annually, covering operational cost for rent, maintenance and utilities.
To reduce overall running costs.
Challenged with reducing this cost, we first looked at areas of the building that were not operational and could effectively be switched “OFF” and be utilized by the land lord potentially saving 14%. However, the client had another 10,000 pallet space warehouse also operational 24/7. Tasked with creating space within this new warehouse areas were identified that could be streamlined in current operation and more effectively utilized. The existing operations and a team of 55 was reduced by 20% and relocated into existing offices within new warehouse, with zero effect on operational performance and customer service. Within 3 months the warehouse was returned back to landlord saving $3.4M. The entire operation reduced into 200m2 foot print a 90% reduction in floor space. Additional savings and synergies were produced due to eliminating need to deliver between the two warehouses.
The cost reduction project brought about USD 3M savings, with an intelligent deployment of space, streamlined operations and staff allocation. Transport was reduced maximizing efficiencies.