Why You’re Losing Money On Damaged Goods

Damaged goods aren’t just a minor inconvenience, they’re a significant drain on both resources and profitability. With close to three decades specialising in load stability, from warehouse ops to pallet logistics, we’ve witnessed and heard hundreds if not thousands of stories where businesses have haemorrhaged money to preventable damages. In this blog, we’re sharing our insights and strategy for reducing losses on damaged goods and improving your load stability…

What Causes Damaged Goods?

Improper Load Stabilisation

Perhaps the major culprit in product damage is the lack of knowledge around load stability. You’d be surprised to hear the amount of times we’ve encountered basic issues that have had a draining effect on the ops budget. Yes, in large scale operations the efficiencies are found in the relationship between film and machinery, but in one instance, it was a simple case of changing the pattern that goods were loaded onto a pallet to provide the greatest increase in stability.

Warehouse Storage Issues

An area that’s often overlooked is the storage practice within the warehouse itself. Poor storage conditions can lead to damaged goods before they’re even loaded for delivery. On one such audit we found products stored against damp walls which had damaged the integrity of the packaging, making it soft and as a result, less stable.

Handling and Operations Mishaps

One of the most common causes of routine damage to goods is through human error. Whether that’s mishandling during load/unloading processes or using improper equipment, the mistakes can be costly. We’ve all seen viral videos of the disastrous ‘domino effect’ that can happen in warehouses, with people operating machinery that they shouldn’t be behind. In those particular instances, the cost to stock easily reaches the thousands and can affect the supply chain significantly.

The Financial Impact on Your Business

Direct Costs

If you’ve experienced, or continue to experience the impact of damaged goods, you’ll know how stinging it can be on the financial side. Not only do you face the costs of replacing the goods, but additional shipping costs plus refunds or discounts to appease affected customers is also something you need to factor in.

Indirect Costs

Beyond those direct costs, the indirect impact can be even more detrimental. Consider your brand’s reputation and the effect damage can have on customer trust. These are the kind of things customers will consider when renewing contracts, or listening to proposals from competitors. Put simply, damaged goods directly affect customer retention.

Proven Strategies to Reduce Damaged Goods

Adopt Advanced Palletising Techniques

Considering the organisation and techniques you use to load pallets can help drastically reduce the chances of damage. Whether that’s by using interlocking patterns, appropriate wrapping or even changing pallet size, every business is different. Utilising better palletising techniques could not only ensure your goods are more secure, but also optimises space and materials which lead directly to cost and energy efficiencies.

Implement Rigorous Load Testing

Regular load testing to simulate transportation conditions is essential. This practice helps identify potential failure points before they become a problem. Our case studies provide a catalogue of customers who have managed to reduce damage, wastage and expense by following our post-test advice.

Optimise Warehouse Storage Solutions

Improving warehousing practices can significantly protect goods from damage. This includes the strategic placement of goods, ensuring sensitive items are stored with adequate protection, and maintaining a space that’s conducive to preserving the integrity of your products. Alternatively, we can provide your business with warehouse space and guarantee safe and secure storage, you can read more about that, by clicking here.

Enhance Training Programs

Never underestimate the role better education can play in improving your current practices. After all, it stands to reason that well trained employees are less likely to make costly mistakes. Organising regular training sessions on best practices and new technologies can help to foster a culture of care and responsibility.

Leveraging Technology for Load Stability

Introduction to Load Stability Technology

Recent tech advances offer remarkable solutions for reducing losses from damaged goods. From automated palletising systems to software that can optimise load configurations, we find the savings from damage regularly offset the cost of investment.

Benefits of Integrating Technology

The integration of such technologies not only enhances load stability but also reduces the reliance on manual labour, decreasing the chances of human error. Moreover, these solutions can lead to significant savings by optimising material use and reducing damage rates.

Conclusion

The logistics and warehousing industry can be unforgiving when it comes to damaged goods. However, with careful planning, continuous improvement, and the adoption of modern technologies, it is possible to start significantly reducing losses from damaged goods. The key is to understand the root causes of damage, implement strategic changes, and embrace technology that enhances your load stability.

Consider taking an audit of your practices, exploring new technologies, and investing in training. We offer all of that here at Castle and use a simple four step process to identify your unique pain points. Book your initial call today, by using the contact details here