Lowering the Cost of Moving

[Roy Strauss]

When moving a distribution or manufacturing center to a new location, one can significantly reduce costs. The less “stuff” moved, the lower the total cost will be. Ideally, one will sell and ship as many units as possible from the old facility so that product will not have to be moved. It may even pay to have a “pre-move sale” especially for most costly items to move such as heavy items or those requiring special handling during the move. As you get closer to the move date you will therefore want to ship more from the old facility and receive more in the new facility.

Often vendors will allow you to purchase product for a move with extended payment terms because of the move. This is an opportunity to have high volume items (A movers) shipped directly to the new facility ahead of the move. Benefits will include: not worrying about having your best items ready to ship should there be any move difficulties; move less of the items you stock the most units of; and the extended terms will eliminate the cost to do so.

Some companies move product that is outdated or obsolete. If one calculates the cost to move these items and all other costs related to storing them in the future vs. the potential profit from their sale, it is often cheaper not to move them. If the potential profit is slightly more than the cost, is it worth slowing the move for them and risking a late opening of the new facility? Ideally one can return these items to the vendor; sell them on sale; donate them to charity; or the worst case throw them out, but don’t let them add to your overall costs and move time.

Roy Strauss is President of the Strauss Consulting Group, a supply chain logistics company that specializes in helping companies increase profits and customer service while reducing costs. For additional information, please go to www.scg4u.com.

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