Cost of storage is an important factor in the process of warehouse management of any business, directly affect the product price, profit. In this article Accnet will the reader learn in detail the components of the cost of maintaining the warehouse, distance calculator to help businesses manage costs more effectively.
1. Cost of storage is what?
Cost of inventory is the total of all the costs incurred when a business store goods in a warehouse in a certain period of time. These costs include rent warehouse operating costs, storage of goods, staff salaries, stock management, the cost related to the risk of goods being damaged, lost.
The cost of maintaining the warehouse plays an important role in maintaining the stability of the supply chain. If not well controlled, the cost of maintaining the warehouse can cause financial burden significantly.
2. The types of costs of storage are common in business
Here are the main components of the cost of maintaining warehouse:
2.1. Cost of renting warehouse
The rental cost of warehouse, including the cost of paying for the use of warehouse space to store goods. Warehouse can be owned by the business or hire from party Tuesday.
- Warehouse self-management: Business investment, construction and related costs will include maintenance of facilities, cost of operation management.
- Rent warehouse outside: Enterprise rent warehouse from suppliers of logistics services, the costs can be calculated in square meters/according to the volume of goods.
2.2. Cost of storage of goods in the cost of storage
Cost of storage of goods includes the cost of air conditioning, cooling, storage costs, moisture-proof, anti-explosion.
- Goods need special conditions: certain types of goods such as food, pharmaceutical, chemical, need to preserve in temperature/humidity given. This increases the costs of storage, especially with cold storage/warehouse temperature control.
- Maintenance costs repository: To the goods quality during storage, warehousing should be regular maintenance such as cleaning, check the anti-moisture, anti-termite, mold.
2.3. Personnel costs inventory management
Personnel costs inventory management in costs of storage, including the salaries, allowances and other costs related to staff warehousing. The personnel location may include inventory management, warehouse employees, staff, inventory and personnel to operate the equipment warehouse.
- Warehouse worker: responsible for arranging, controlling, tracking of goods in warehouse, ensure the goods are import/export warehouse right process.
- Inventory management: operating the entire warehouse operation, optimize storage space, monitoring the operation process, daily.
- Staff inventory: perform the job inventory periodically to figures goods in stock joints with bookkeeping.
2.4. Operating costs warehouses in the cost of storage
Operating costs inventory includes the costs for electricity, water, fuel, maintenance of equipment is operated in a warehouse as a forklift, conveyor, cooling system, the machinery and the other serves for the storage/handling of goods.
- The cost of electricity water: used to maintain the operation of the lighting system, air conditioning, the refrigeration equipment.
- Cost of maintenance of equipment: Equipment in the warehouse as a forklift machinery should be regular maintenance to operate continuously, avoid interruptions.
2.5. The cost of risk warehousing
The cost of risk warehousing related to the risks that arise when damaged goods, loss, loss of quality during storage. These risks can occur due to storage conditions do not match, the error from the process management, the unintended accident such as fire or flood.
- Damaged goods: the Business must bear the cost when the merchandise is damaged due to storage conditions do not guarantee, goods of substandard quality.
- Loss, loss: Occurs due to errors in the management, protection, not tight, the fault of the staff.
2.6. The cost of insurance, warehouse and cargo
Insurance costs warehouses/goods in warehousing fees are costs that a business must pay to protect warehouse/goods in stock from risks such as fire, explosion, natural disaster, loss due to theft. Insurance helps to minimize losses upon the occurrence of unexpected mishaps, the business can continue to operate normally without severely affected financially.
- Insurance warehouse: protect the risk of damage physics such as fire, collapse, disaster.
- Cargo insurance: protection risks such as loss, damage, reduced quality.
4. Formula for calculating the cost of inventory accuracy
General formula:
| The total cost of inventory = Cost of renting warehouse + storage Costs, cargo + personnel Costs + operating Costs, inventory + Cost of insurance |
For example, Enterprise has the following costs for a period storage:
- The cost of renting warehouse: 100 million VND
- Cost of storage: 30 million VND
- Personnel costs: 50 VND
- Operating cost: 20 million VND
- Cost, risk and insurance: 10 million VND
The total costs of storage will be: 100 + 30 + 50 + 20 + 10=210 million VND
4.1. Formula for calculating the cost of renting warehouse:
The cost of renting warehouse = Unit price of rental of warehouses × area or storage warehouse used x rental period
4.2. Formula for calculating the cost of storage of goods:
Preservation costs = cooling Costs + Cost of air conditioning + Cost sanitary warehouse
4.3. Formula for calculating the personnel costs inventory management
Personnel costs = basic Salary + allowances + the Cost of training staff (if available)
4.4. Formula for calculating operating costs repository
Operating costs, inventory = Cost of water and electricity + maintenance Cost of equipment + Cost of fuel to operate
4.5. Formula for calculating the cost of risk warehousing
Cost risk inventory = (Total value of goods damage or wear and tear/Total inventory value) x 100%
4.6. Formula for calculating the cost of insurance stock/commodity
The cost of insurance = insurance premium warehousing + Free cargo insurance
3. The impact of the cost of maintaining the warehouse to the business
- Affect the price of the product
Costs of storage will increase the price of the product, reduce the competitiveness of the enterprise on the market. If not, optimize the cost of this, the selling price will be higher, making the product less attractive.
- Reduce the performance of working capital
When you stock too much goods, working capital locked up in inventory, reducing the possibility of re-investment, business expansion. Business can not flexible use of funds for other activities.
- Risk goods outdated/damaged
Storage for too long are at risk outdated/damaged, especially the top has a shelf life short. This leads to losses due to reduced value, to remove the goods.
- Increased risk insurance costs
Large inventory synonymous with level higher risks (fire, explosion, loss), increase the cost of insurance warehousing/goods.
- Impact to production planning/business
Costs of storage makes prudent business in the enter new items, leading to supply shortages, loss of business opportunity, do not respond promptly to market demand.
5. Technology solutions to support the management and reduce the costs of storage
Software inventory management, Lac Viet is designed to optimize the process of warehouse management help enterprises reduce the cost of maintaining the warehouse. Software provides advanced features such as process automation, import export warehouse, inventory tracking, real-time reporting, detailed analysis.
The main benefits of warehouse management software lacviet:
- Sort, organize warehouse space, beach, logical, cargo storage efficiency, reduce the cost of maintaining the warehouse related to unused space maximum.
- Warning system, automatic tracking helps business timely detection of risks in the process of storage, minimize the damage, preserve the value of goods.
- Business control the amount of inventory closely and update the correct status warehouses, reducing the costs of storage of inventory excess or deficiency.
- Automate the process of import, export, warehouse, inventory, minimize errors due to recording craft, save time.
- Provides detailed report about the amount of inventory, the cost of maintaining the warehouse performance indicators (KPI), to help businesses analyze, adjust strategies storage flexibility
- Integrated with the ERP system to help businesses synchronise data warehouse management overall, seamless.
By calculation, effective management of the components of the cost of maintaining the warehouse, enterprises can optimize resources, reduce risks and increase profitability. Hopefully this article has provided useful information, help you understand more about the role, the formula for calculating the cost of storage details. Thank you for reading followed!
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