Guide: How to Optimise Industrial Land & Warehousing Costs

A supply chain can make or break a business, especially in today’s age of swift e-commerce and quick delivery services. A warehouse is one of the most integral nodes of a supply chain, facilitating storage, inventory management, rapid mobility and data gathering. However, for a warehouse to do what it is supposed to do, it is important to make the right choice. Investing in industrial land for sale and warehouses can be a capital-intensive affair. As such, it is best to be aware of how much purchasing or leasing industrial plot for sale and warehouses costs. Businesses can also benefit by implementing strategies that help mitigate and manage such costs in any industrial development. Continue reading to learn more about the different pillars of expenses involved in using an industrial plot and warehouse and pick-up cost-reduction tips.

What are Warehouse Expenses?

Warehouse costs refer to the fees levied when a business operates a warehouse. Normally, such costs include rent, utilities, insurance, maintenance and taxes. However, warehouse costs can also extend to cover the cost of goods stored within such a space, along with expenses related to inventory control, order fulfilment, and other similar services. As such, there is no fixed cost of using a warehouse; it depends on a host of variables such as:

• Location: Like any other property, the cost of industrial land for sale and warehouses also depends on location. Warehouses in urban areas, functioning as in-city distribution centres, are close to avenues of transport and consumer bases and can come at a higher cost. On the other hand, warehousing facilities located in more isolated areas or on the outskirts of cities are relatively less expensive; however, the reduction in rent is balanced by the cost of transportation and logistics.
• Size and Space: The space a warehouse offers is directly proportional to the cost. Larger warehouses, with more storage capacity and room for mobility, will be more expensive than smaller spaces.
• Type: The cost of a warehouse also varies depending on its type. For example, a standard warehousing facility with simple storage facilities will be differently priced compared to warehouses fitted with equipment, technology, advanced security systems and automated logistics support.
• Lease: A thumb rule to keep in mind is that the longer the lease, the lower the monthly rent. Since most industrial real estate landlords prefer long-term tenants, longer leases allow businesses to pay lower monthly rents. Shorter leases for industrial plots for rent usually come at a premium due to the administrative tasks involved. Note that this variable is inapplicable if a business plans to purchase an industrial plot outright.
• Amenities and Services: Warehouse costs also vary with the kind of amenities the space offers. If a warehouse is fitted with security systems, fire safety services, management and logistical support, the costs involved will increase.

How to Reduce Industrial Land and Warehouse Costs?

Here are a few best business practices & ways in which businesses can reduce the warehousing costs^[3]:

• Warehouse Management Systems (WMS): A WMS is a software system that helps increase the efficiency and management of a warehouse via automation. From activities like putaway, picking, packing and shipping to real-time visibility and tracking, WMS can help businesses reduce manual labour and save time and money. It can help warehouse staff work faster and result in quicker turnaround times.
• Just-in-Time (JIT) Inventory Management: JIT is a powerful tool that helps businesses cut costs and ensure their production matches the demand. The goal of JIT is to reduce the inventory on hand and stocking only necessary materials and products in a warehouse. Based on pull systems, wherein only actual orders lead to the stocking of inventory, JIT can reduce overstocking and is most suitable for fast-paced and competitive markets.
• Optimised Picking Processes: Optimised picking processes can help reduce travel time via strategies like:
  • Pick-to-Light Systems that use lights and displays to guide pickers for increased accuracy and speed.
  • Zone Picking divides the space into zones to reduce travel.
  • Automated Retrieval Systems that use robots to store and retrieve items.
  • Radio-frequency identification (RFID) uses radio waves to communicate between a reader and a tag on an item for automated tracking.
  • Pick-to-Cart Systems wherein pickers use mobile carts and RFID readers to scan items for tracking and expedite the process.
• Automation Technology: Automating repetitive and time-consuming tasks can reduce the reliance on manual labour and increase overall efficiency if you opt for world-class industrial park developers in India. Automation technology includes a range of solutions like WMS, Automated Storage and Retrieval Systems (ASRS), robotic arms, and so on.
• Optimising Warehouse Labour: Since time is money, efficient processes can help businesses reduce costs. Using standard operating procedures and clear protocols can boost efficiency, reduce errors and cut down on time. All of these culminate in a reduction of costs if you can ensure the best features of the industrial park.
• Smart Storage: Vertical storage solutions like multi-level shelving, mezzanine floors and carousels can help maximise floor space in a warehouse. Vertical space can help warehouses functioning at full capacity store more items in the same footprint. In a similar vein, cross-docking is a logistics technique wherein goods are transferred from income to outgoing trailers without the need for storage. Cross-docking eliminates the need for storage space, speeds up operations and helps cut down on costs.
• Preventive Maintenance Program: Preventative maintenance refers to conducting regular inspections and equipment servicing to fix potential issues before they become cost-sinking problems.
• Employee Retention: Replacing warehouse employees can become an expensive affair. Instead, it is more cost-effective to retain top-performing talent by offering competitive pay, benefits, opportunities for growth and work-life balance. Industrial park developers in India are carefully integrating this aspect into their ESG framework.

With so many techniques and technologies available, cutting down on warehouse costs is not only possible but can be seamless. At Lodha, we believe in addressing our clientele’s concerns before they arise. While Lodha Industrial and Logistics Park, Palava allows businesses to meet their bulk warehousing needs and streamline logistics, Lodha Logistics Park, Kurla is designed for seamless in-city distribution, warehousing and last-mile delivery for quick delivery service, food delivery company, third-party logistics service provide, etc. for in-city warehousing solutions in Mumbai.

Being one of the best industrial parks in India, LILP ensures the best-integrated logistics experiences and provides the best warehouses in Mumbai and industrial property for sale compared to warehouses in Navi Mumbai, industrial plots in Bhiwandi, industrial plots near Mumbai, industrial plots in Taloja, industrial plots in Thane, industrial plots in Navi Mumbai, industrial land for sale in Panvel, industrial land for sale in Mumbai, warehouse in Bhiwandi, warehouse in Taloja, warehouse in Kurla, warehouse in Thane, warehouse in Palava, in-city warehouse in Mumbai, in-city warehouse in Thane, in-city distribution centre in Kurla, industrial land for sale in Maharashtra, industrial plot for sale in Mumbai and distribution centres in Mumbai.

Lodha, India’s leading real estate developer, is creating top logistics parks in India and best-in-class warehousing solutions that cater to the evolving needs of modern businesses. With a focus on supply chain optimisation, warehouse management and logistics integration, Lodha delivers plug-and-play solutions designed for seamless operations and provides built-to-suit warehousing solutions for your tailored needs. Our warehousing spaces are equipped with the best features of industrial park cutting-edge automation technology, ensuring enhanced inventory management, reduced operational costs and faster turnaround times for businesses.

Choose LILP and enable your business to soar to newer heights.