How to downscale or upscale warehouse operations

November 7, 2022

The global economy has been particularly unstable in the past few years, with extreme peaks and devastating lows, as the International Monetary Fund explains. Every industry is grappling with high levels of economic uncertainty and many business leaders are unsure how to prepare for the future. 

One of the most obvious ways to adjust to economic fluctuations is to change the size of your operations to suit your evolving business needs. Depending on whether the economy is on a high or going through a slump, you may need to upscale your operations to meet increased demand or downscale it if your revenue doesn't sufficiently exceed your overhead expenses.

Do you feel you may need to adapt your operating strategy to accommodate your business requirements, but you're not entirely certain how to go about it? Read on to learn some useful methods that can help you upsize or downsize your operations as necessary.

Upscaling your operations

If your company is particularly reliant on or subject to changing seasonal demand, you'll understand the importance of having more hands on deck when you most need them and fewer when you don't. However, hiring and onboarding new warehouse employees can be a costly and time-consuming process. The return on this investment is minimal when these workers aren't going to be a permanent part of your workforce.

A good solution is using temporary staffing agencies. These organizations are in touch with potential new employees who have all the experience and knowledge you need. This means that you don't need to waste your resources training new workers as they'll be ready to start when you give them the go-ahead.

And, given that you don't know what the future holds, temporary employees mean you can avoid taking on any long-term responsibilities that may weigh you down in the long run. An additional benefit of temporary staffing is that, should you need these workers again, you can reach out to them with another contract or even hire them in permanent positions.

Downscaling your operations

Decreasing your staff numbers can be a little trickier than adding to them. As Tapscape explains, the most obvious way to downsize a business is through employee lay-offs. This is particularly useful when there's not enough work for them due to decreased demand or if you can't afford to pay salaries or wages as a result of dwindling revenue.

However, if your order volumes are stable but you need to cut down on costs, you can consider closing one or more warehouses or company branches if you have more than one. Or, you could choose to move to a smaller location that will be less expensive to rent and will have lower utility bills.

Alternatively, you can choose to sell surplus stock or equipment to get some extra cash into your flow. If you need all your tools, there's always the option to remove goods or services from your business offering that aren't performing as well as others.