How to improve asset management and reduce risk

Although global supply chain pressures have eased from the crises of recent years, the knock-on impact continues. Knowing how to improve asset management and reduce risk is key. Common operational challenges for businesses include certainty, quality and cost.  

Companies sourcing inbound goods from countries like China have faced inconsistent product quality, uncertainty, and delivery concerns. Delays caused by staff shortages and strikes from ports to drivers and rail services, continue to undermine performance.  

Rising warehouse costs are impacting margins, including the high price of heating buildings. When you add pressures with staff retention, recruitment and the rising cost of warehouse staff, businesses face huge challenges. When it comes to managing seasonal spikes in demand, such pressures are further compounded. 

Despite the economic turmoil, demand for warehouse space continues to rise, but facilities are soon snapped up. The development of new sites is unable to keep up with demand, leading to price increases. Many companies have invested in contingency stock to avoid disappointing customers or shutting down production lines due to a lack of parts.  

Research suggests logistics site availability has dropped by 22.4% year on year 

There’s a balance between reducing operational risk linked to supply chain disruption and minimising costs. Excessive stock holding and additional warehouse space is a serious juggling act for many logistics firms. Every business has its unique pressures, so how can you improve asset management and reduce risk without compromising fulfilment? 

Intelligent warehouse design

Optimising warehouse operations will improve the way existing space is managed. Identify your fastest-selling goods or most used parts in the production line. Make sure these items are easily accessible to reduce time spent on stock movement. Use sophisticated analysis to leverage demand information to match products bought together or components required at the same time. Goods located together adds further efficiency to the process.  

Protect your inventory

Simple steps can minimise damage. Ensure liquids are always stored below powders in the event of any spillage. Although obvious for experienced warehouse staff, new employees may be unaware. Encode rules into a warehouse system to ensure every staff member puts goods in the correct rack to avoid expensive mistakes.

Maximise storage space

A fast-track approach is cost-effective when maximising space. Get rid of aged stock; this is one area many businesses overlook. Companies often risk products being out of date, not accounting for the cost of each item. Be proactive and dispose of these items, even at a significant discount. Release space to prioritise acquisition and store goods that deliver maximum value.

Avoid excess contingency

By adding Materials Resource Planning (MRP), a manufacturing business can significantly improve the management of inbound stock. Goods can be ordered based on accurate demand rather than forecasts. Reducing contingency stock by selling off aged stock could release space, enabling the business to recoup additional costs. Avoid overstocking to minimise the impact on cash flow and gain clarity on warehouse space requirements.  

Effective utilisation of assets, from initial order through the supply chain to the customer door, can transform company costs and improve the customer experience. 

Sage X3 and Sage 200 inventory management

The key to effective asset management is to maximise the use of space and your inventory. ERP provides instant cost-saving benefits throughout your organisation, by increasing efficiencies through smarter working.  

From finance to your distribution and manufacturing systems, choosing the ERP solution can revolutionise the way you run your business.  

CPiO is a Strategic Partner of Sage UK with over three decades of experience in delivering ERP software, including Sage 200 and
Sage X3.