It happens every year around this time – the season for end-of-year tax deductions. The Section 179 tax rule gives businesses an opportunity to write off as much as $500,000 in new and used equipment costs. Equipment or software purchased and put into service by December 31st is deducted from your business’s gross income – it’s as simple as that. And depreciation boosts the total tax reduction even more.
The tax experts at Section179.org provide in-depth information on this valuable tax strategy, and the calculator from Crest Capital shows the savings.
The key phrase in Section 179 is “put into service.” With only a month left in 2016, many kinds of business equipment simply can’t be delivered and put into service before the end of the year. The good news: There’s a wide variety of high density storage, RFID systems, and modular furnishings on a quick-order program. Talk to your tax advisor, then talk to your local storage professional to find out which new and efficient storage systems can help your business qualify for this attractive deduction. Don’t waste a minute!
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From Southern California to Washington, D.C., new warehouses are springing up overnight to meet market demands. There’s one time-consuming phase of warehouse build-out, however, that shouldn’t be bypassed regardless of how much of a hurry you’re in.
As reported by Site Selection Group, the demand for new warehousing is spurred by e-commerce’s continued exponential growth, where volume and speed-to-market are critical success factors. Warehouses can be constructed relatively quickly – an average of 81 days in the U.S. – but the permitting process for racking systems can potentially slow your build-out to a crawl, extending your timeline and costs.
Of course, the short-term costs of a longer timeline are far outweighed by the long-term costs of injuries and product losses (not to mention fines) in the event of racking system failures. It’s important to work with an experienced storage consultant who will design and install safe, reliable storage racks. Their expertise could help you speed up permit sign-offs from the building department and the fire department.
Building a strictly legal environment for your employees and your products will ultimately save you big-time in terms of safety and liability. Read more here about permitting, and see a video showing what happens when unpermitted racking fails in a seismic event.
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When the new mega-size container ship “Benjamin Franklin” docked in the Ports of Los Angeles in late 2015, it marked the beginning of a new shipping era. The ship can carry 18,000 containers. Placed end to end, the containers would reach from Baltimore to Philadelphia, a distance of nearly 100 miles. That’s a lot of containers!
And that number of containers has logistics experts worried. Their concern: The land-side infrastructure of ports on the US west coast cannot handle such a large influx of containers at one time. Trucks will not be able to get in and out of the ports quickly enough to move all those containers off the docks and make room for the next ship waiting its turn to unload, says Jared Vineyard, blogging for Universal Cargo.
This congestion starts a domino effect that is felt all the way down the supply chain – transportation delays increase, warehouses aren’t restocked on time, and retailers will feel the squeeze. Despite the increased shipping capacity, American shoppers may actually experience shortages of their favorite consumer goods. To keep retail shelves stocked, wholesalers and warehouse managers should be looking at ways to increase their own storage capacity ahead of the bottleneck that could be building at the seaports.
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Drones, 3D printing – the past few years have seen innovations that could prove highly disruptive to the traditional supply chain. Lora Cecere, CEO of Supply Chain Insights, serves up her predictions for the 2030 supply chain in this post. The highlights include:
- Autonomous Supply Chain. Sensors, robotics, and GPS combined into an adaptive, cognitive system that automates manufacturing and warehouse management, and reduces heavy machinery downtime through sensors and connectivity.
- Safe and Secure Supply Chain. An automated chain of custody will reduce spoilage, secure hazardous shipments, and guard against fakery in everything from purses to pharmaceuticals.
- 3D Printing. Everything from spare parts to medical devices will be individualized and printed as needed.
- Learning Systems and Network of Networks. Manufacturers, shippers, and consumers will know where any customized order is in the process, at any time, in any place, thanks to supply chain systems that learn cognitively, and a network that talks to all other networks.
What do these changes mean for your business? Is your business ready for this brave new world? And where do storage systems fit into the big picture?
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As the end of the year approaches, the IRS has a little holiday gift for businesses looking for last-minute ways to boost their tax deductions. It’s the Section 179 tax rule, which permits the deduction of the full purchase price of business equipment, up to $25,000. As explained by the tax watchers at Section179.org, this deduction can be a significant business stimulus.
New equipment put into service this year by December 31st can be deducted from your business’s gross income under Section 179. It’s that simple. And everything we provide – high density storage systems, RFID systems, modular furnishings, for example – qualifies for the deduction.
More good news: When you add in depreciation, the total tax reduction is even greater. This calculator from Crest Capital shows the savings. Review your company’s 2015 P&L, check with your tax professional, then give us a call.
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Warehouses aren’t in the business of manufacturing, so it might seem irrelevant to apply the precepts of Lean Manufacturing to the logistics industry. However, says author Jeff Maree, there are surprising bottom-line advantages to managing a “lean warehouse.”
Lean manufacturing seeks to reduce errors, improve efficiency, and add value – the famous Japanese principle of kaizen, or continuous improvement. Maree, writing in Manufacturing Transformation, outlines five ways to apply the same principle in warehouse management.
- Technology – Barcoding, RFID, AS/RS, and other such systems reduce errors and improve efficient flow.
- Touch – Well-planned and implemented technology reduces the number of times an item is touched. Fewer touches means lower costs.
- Racks – The right storage solution will dovetail with the right technology solution to maximize space utilization, reducing real estate costs.
- Just in time – Tracking inflow and outflow over time lets lean warehouses maintain inventory at just-in-time levels, to keep storage use optimal.
- Partners – From software suppliers to storage providers, the right professional partners will support the lean warehouse in its goal of continuous improvement.
Manufacturers are reaping the financial benefits of lean-manufacturing productivity. Shouldn’t warehouse managers enjoy the same kinds of gains?
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