TermiKnowledge - Supply Chain, Procurement and Inventory Terminologies
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In today's economic climate, many businesses are trying to reduce cost by streamlining their warehouse operations and by offering cost-saving waiver plans. These efforts are paying off as more companies and warehouses are embracing the cost-effectiveness of a waiver program. Waivers enable businesses to provide reduced inventory costs to their customers, thereby allowing them to pass on higher prices to their customers in order to keep their overhead costs down. A major hurdle to reducing inventory costs and waiving waivers is the fact that most warehouses have not been well-designed for proper warehouse management.

Waiver programs have become a critical part of overall supply chain management because they allow suppliers to reduce their operational costs and/or increase their profits. Without a well-designed waiver strategy, an internal supply chain manager will spend a great deal of time communicating with suppliers about the specifics of their program. The result is that the suppliers often do not fully understand the benefits and incentives of the agreement they enter into with the company, leading to poor communication and inefficient supply chain management. Many insurance companies are now putting tremendous pressure on companies to require their staff to sign out waivers before coming back into the workplace.

For any organization, the key to understanding the supply chain and waiving waivers is to design a warehouse operations strategy that incorporates efficient warehouse design, improved logistics and better communication with the outside supplier community. Warehouse managers must have an accurate understanding of the value and cost of their waiving activities and be able to communicate those benefits and savings to the rest of the organization. If the company has a well-designed Warehouse Management Information System, then the whole organization will be more aware of the benefits of saving money on warehouse operations and will be more willing to embrace the opportunities offered by waiving. By improving the efficiency of the warehouse operation, businesses can also save money on labor costs and improve their overall bottom line.

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