Facility Facts that Impact Your Bottom Line
Everyone is focused on improving profitability, whether by increasing sales or decreasing costs (or both!) But when looking for opportunities to improve the bottom line, businesses often neglect to evaluate the impact of their facilities. Here are five ways that your facilities can impact your bottom line:
An energy efficient building with appropriate insulation and materials can reduce your heating and cooling costs, as can today’s more efficient HVAC systems. Motion-activated lights and thermostats ensure that energy isn’t wasted on empty rooms. Windows can provide natural light that reduces the artificial lighting required as well as improving morale. These all add up to reduced utility costs that can contribute to your bottom line.
Is your floor plan efficient? Are the people and or teams that work together located near each other? If they need to trek across the building, to another floor or even a different building, that’s time they’re not able to be productive – and it adds up fast! And don’t forget your warehouse or manufacturing operations layout – while this may be addressed more often than the office layout, it’s something that should be regularly reviewed and assessed for improvement opportunities. Reducing the distance between manufacturing steps or efficiently organizing your warehouse to keep the most accessed items in the most quickly accessible locations saves both time and energy so that your team can be more productive. Again, these efficiencies contribute to productivity and can both improve income and reduce costs.
High clear heights
Real estate has a cost – but if you have high clear heights in your warehouse, you can go up instead of out. That can reduce your facilities’ footprint while keeping things in close proximity – which can reduce the distances traveled, improving productivity. And high clear heights in a manufacturing environment may improve safety by allowing the optimal clearances or even accommodate more efficient equipment that requires the additional room height.
Loading docks can be a bottle-neck in moving materials or products in and out of your facility. That can lead to slower processing times, and/or overtime by the team members managing the docks. Do you have the optimal number of docks with the most useful combination of dock heights? Do you know what that configuration would look like? It’s a question worth asking – the right configuration of loading docks can improve your processing times, overall productivity and improve that all important bottom line!
In real estate, they say there are only three things that matter: Location, Location, Location! And when it comes to operational efficiencies that can improve the bottom line, your facilities’ location can be critical. If you’re shipping products out, is your shipper of choice or fulfillment house close? Those round-trip miles add up fast, and reducing that distance saves time and fuel. Are your suppliers nearby? Or conveniently close? Shipping has a cost associated with it, in both time and money, and the ability to obtain your supplies more quickly (just-in-time shipping!) and at a lower cost of transportation saves on many fronts. If you utilize rail, ports or foreign trade zones (FTZ), do you have local access to them? Time is money, and distance between your facilities and a port or railhead costs. Try to locate your facilities near your most critical partners (whether suppliers, customers or transport) – and stop by to build that relationship while you’re at it! Find a good location for business that benefits you and your partners.
Do you have the room you need to expand in your current facility? Locating your business in an area that allows you to grow in place can have a huge impact on your profitability versus the disruptions of having to move your operations to a larger facility or deal with multiple locations. Planning for the future can improve both efficiency and profitability – not to mention avoiding the stress, downtime and costs associated with a move.
So, when building a plan to improve profitability, maximize productivity and efficiency, don’t forget to factor in your facilities – you may have some great opportunities you can exploit to the benefit of your bottom line!
The Santa Clarita Valley Economic Development Corporation (SCVEDC) is a unique private / public partnership representing the united effort of regional industry and government leaders. The SCVEDC utilizes an integrated approach to attracting, retaining and expanding a diversity of businesses in the Santa Clarita Valley, especially those in key industry clusters, by offering competitive business services and other resources.