There are a few selections which require consideration when determining both where and also how to store your products and these are; Private Warehousing, Public Warehousing and Contract Warehousing. Each of these warehousing services has their benefits and each tailor for different needs. A private warehouse is owned by the organisation who manufacture or distribute their items, this option provides the most hands on control of all the aspects including in warehousing; equipment, security, personnel, etc. it is often prohibitive with costs due to the large amount of capital that is needed to buy or build a warehouse. As well as the cost of the facility there will also be the costs for the equipment needed, such as storage racks and machinery; forklifts and so on. There will then be additional monies needed for the hiring and also training of staff – increasing the payroll, on-going safety training and audits, property taxes, liability insurance and overall building maintenance.
With public warehouses there is a solution that circumvents the requirement for a large capital outlay. Leases can be on a four weekly basis and are usually at a standard rate per square foot. Public warehouses can mean a cost effective solution, especially during peak seasons when a short-term increase will be needed within the inventory. For contract warehouses the leases will usually be for longer periods of time; generally over six months, however the cost per square foot of space is on the whole less expensive to hire. With contract warehousing there are using many additional features like dedicated docking, forklifts, racking and round the clock security.
Factors to consider when choosing warehousing services:
Duration of Storage: Determine how long you will need the products to be stored for. Will your items go into the warehouse one time and remain there for an extended period of time, or will there be shipping received often at the warehouse?
Accessibility: You may need to access the products within the warehouse continually i.e. every time an order is placed, or you could need access only occasionally. Prices will vary depending on the frequency of access required – due to the means this utilises.
Location: This is a huge factor in optimizing your logistics plan; do you need your warehouse to be near a railway? Airport? Motorway? Decide how your products will be shipped and what form of transport this will entail and then consider how smoothly this can be operated from the warehouse. Locations for warehouses in major cities will be more expensive, but they will make for easier and smoother transportation, consider how important this is to you.
Warehouse Services: Depending on your products you may require the following services:
- Ambient Storage
- Inventory Reporting
- Order Fulfilment
- Inventory Management
- Ultra Clean Storage
- Product Labelling
Warehousing Cost: It is imperative to evaluate the price per square foot, but equally important to factor in the prices for transportation and tax considerations. In our current climate it is becoming increasingly important to consider how much it will cost to transport your products from warehouse to doorstep with fuel cost being a major factor.
Optimize Your Logistics Plan
There are four main components to optimising your logistics plan, and these are:
- Reducing Transport-Related Costs
- Avoiding Bottlenecking the Supply Chain
- Optimization for Future Growth
- Achieving Maximum Operational Efficiency
The main goal for good warehouse logistics is to be able to transport goods to and from varying points in good time and also economically. Regardless of if suppliers are in close proximity or overseas, the way your products can be accessed are just as imperative to their location. Warehouse logistics planning should have services that encompass all aspects of the supply chain dynamics, which should be high-performance, economical and efficient.
Use much consideration when deciding on the right warehouses services for your company, to optimise your logistics plan. Shop around and ask lots of questions in order to find the best, most cost effective storage solution for your requirements. You should also physically visit a locations before making a decision as this will reveal things not usually covered prior to agreements such as how professional the staff are, how clean the facility is, what condition it is in and how well the machinery is maintained – all of which have a significant impact on how your logistics plan will run.
Your warehouse needs to be singing of the same hymn sheet as yourself, they need to know what your requirements are and be able to fulfil them. If you’re likely to have a period of a few weeks spotted throughout the year when your customer base will increase (maybe your items are gift related and purchased more on the run up to Christmas, or you could specialise in outdoor products which are likely to be purchased more during the summer months) then check that your supplier does have the ability and capacity to deal with higher demands when they arise.
The warehouse you choose will have a huge bearing on your business, it is them who will be the last people to see products before they arrive at a customer and so them who have the responsibility to prevent damages, contamination, lost items and delays – you need to be able to trust them, and they need to prove that they will not let you down. When a customer receives a poor quality service it is your company, which receives the backlash; the loss of client and the bad word of mouth and this is why it is essential that you choose a warehouse will all of the services you are likely to need, already in place.
Looking into a warehouses background and visible history can give you reassurance that you’re dealing with professionals, the longer established and the larger the client base the more efficiently the warehouse is likely to run. A new warehouse company may offer lower prices, but there’s likely to be a reason for this and cheaper is not always better, especially not in business.