The long-predicted disappearance of paper documents has yet to take place. It’s difficult to give up a centuries-old habit, and many businesses, even those that have eagerly adopted digital document technology, still feel the need for a solid piece of paper to record transactions.
But there’s a cost associated with paper in the workplace. PriceWaterhouseCoopers estimates the cost of finding a single lost document is $122. Further, they estimate that a business loses 7.5% of the 10,000 or so documents it works with, on average. That’s 750 lost documents, or $91,500. What could your business do with an extra $91,500?
Before you answer that question, PWC has another number for the equation: 20%. Employees tasked with managing paper documents in paper-dependent businesses spend 20% of their time, the equivalent of one day each week, filing and retrieving documents. That’s one day each week that is lost to other tasks – tasks which may have revenue potential.
In addition, consider the extra real estate costs involved in storing all those documents (the ones that aren’t lost). Unless your document storage is condensed in a space-saving high density storage system, your business is paying for non-productive office space to house traditional filing cabinets.
When you look at the cumulative costs of storing and retrieving paper documents vs. the cost of scanned documents, the advantage of digital document storage is quite clear. Retrieval of electronic records takes seconds rather than minutes. Thousands of documents fit onto a drive the size of a credit card. Speed and size work in your favor, reducing paper document costs and improving productivity. Even if you have to retain paper copies of your scanned documents, the physical storage for scanned media takes up minimal additional space. And if you need to produce a paper document, just press Print.
Without question, paper as a medium still has its own unique value, and there will be occasions when there’s no substitute for a paper document. A scan of your business’s first dollar, for example, can’t compare to the real thing framed on your wall. But given the cost advantage of electronic records, there’s a better place for paper documents, and for most of them, that place is in the scanner.
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The just-in-time (JIT) inventory strategy has been the darling of manufacturers, distributors, and retailers for 20+ years. But there’s an inherent danger for retailers who use JIT.
JIT is at the heart of the nimble business model, allowing businesses to be flexible and responsive to new market conditions. It reduces investment in inventory, it reduces inventory obsolescence, and it reduces inventory storage needs – major benefits to retailers whose margins are squeezed every day. So what’s the downside?
Communication and speed are the vital components of successful JIT. The JIT cycle begins with a “pull” event. A pull event can be an alert that stored inventory has reached a pre-set level of depletion, or it can be something as simple as a single sale. The pull event triggers a message that more product is required in order to maintain a retailer’s inventory at the optimal level.
The message may initiate more production or it may request a transfer of inventory from warehouse to store. When the pull event message is triggered, manufacturing and logistics must move swiftly to deliver fresh inventory.
As long as the pull event message is received, and the inventory can be re-filled quickly, JIT is an undeniable winner. Retailers get all the benefits of low inventory costs. But if there’s a breakdown at any point – an unforeseen surge in demand, a communications delay, a diverted shipment – retailers are left with empty shelves and lost sales.
Every retail operation has a sweet spot that balances the cost of warehousing inventory against the risks of a JIT breakdown. Retail is a gamble in itself, but you can hedge your JIT bets by using automated vertical storage. These space-efficient vertical carousels can increase storage capacity by 50%, allowing a risk-averse retailer to keep an inventory cushion on hand for unanticipated demands, without the additional cost of extra storage space. For those retailers who are comfortable gambling with somewhat lower inventory on hand, a vertical storage system can reduce their storage footprints by as much as 75%, yielding a substantial financial cushion to offset potential JIT breakdowns.
JIT is a well-tested and well-proven strategy for managing inventory efficiently, productively, and profitably – as long as the system works smoothly and speedily. Mitigate the JIT risks with a vertical storage system, and you can bet safely on JIT.
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