by admin | March 15, 2019 1:45 pm
Last January, Poundstretcher was fined a massive £1m because of how disorganised the working conditions were in their warehouses. Products were kept without any real order throughout their warehouse, and racking safety clips needed replacing. It is thought that this occurred as a result of shorter termed savings approaches and just outright neglect.
If you are investing less on the training of your warehouse workers, less money on kitting out your warehouse better, less money on researching into more effective and efficient working practices, less financial support to incentivise your employees and are putting less money into inspections of your warehouse, you will save lots of money in the immediate, short term.
The problem is that it creates an unsafe supply chain.
Over the long-term, supply chains with less money spent on them cost more money. Your business operations become less efficient and there is less motivation felt among your workers and then what is the result? You get fined £1m.
This is an important lesson for all businessowners with warehouses and supply chains. However, there’s still budgetised supply chains that have not done it.
Another example is Sports Direct. It has been in the news for a couple of years now because its budget supply chain has continued to fail. Halfway through 2017, it found itself under scrutiny again, as it had not improved on its warehouse operations and safety conditions, even though it agreed to do it.
Although they were never fined, they had a lot of negative media coverage over those last years as its staff had commented how much they hated working for the company. Training pay rises and several other perks could help to motive their employees to work better, and Sports Direct would feel the benefit.
However, the continued bad press regarding your supply chain for any period is not good from a public relations standpoint.
Another perfect example of how to do it wrong is Amazon, who it was clear, were underpaying, undervaluing and overworking its workforce to save money, as revealed in 2017. Although this particularly story concerns warehouse staff, the company was accused of cold-hearted, aggressive business environment is all too like the situation with the white-collar workers of the company who opened about their experiences back in 2015.
This kind of story affects how shoppers see Amazon. That and their lack of interest in paying taxes.
It can be hard to really work out how in terms of money this has an impact on a business. However, Amazon alternatives like Not on the High Street have positioned themselves on the fact they are nothing like Amazon. This suggests a lot about how most consumers feel. People like it, but only because its convenient.
Just as Sports Direct and Poundstretcher are budget chains that offer budget items for their consumers and Amazon does the same – cuts its costs and the consumers benefit.
The issue is here, as we’ve established, is the one place businesses should not cut corners in their supply chain. It creates dangerous working conditions, results in fines and results in inefficiency. When this is combined with PR issues, and negative perceptions from the public, short-term thinking just makes things worse.
Source URL: https://incredit.me/why-its-more-expensive-in-the-long-run-to-save-money-on-pallet-racking-safety/
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