How and where to store your goods
Critical to a supply chain network at both a local or globalised level, there are many factors to consider when determining the best location and partner (if you’re looking for a 3PL) for your warehouse. Making the right decisions with warehousing can add to the performance of your supply chain, leading to efficiencies and speed in terms of the processing, management of your products and fulfilment to you customers.
In this section of the Knowledge Centre, we cover all the key elements that you should consider when it comes to finding a location for a warehouse and ensuring it meets the requirements for your business. Of course, we have a comprehensive list of suppliers that can offer warehousing, both on a local and national level. These can be found in the Logisto Directory here. After reading this article, we advise reading the ‘self-storage’ article, especially if you are operating a smaller business that only requires limited warehousing.
Without further ado, we should get stuck in with a fundamental or two - What is a warehouse and what are the essentials to consider?
At the highest level, I suspect everyone has an image of what a warehouse is and its primary function – a big shed that stores thing. To an extent, that is spot on…but it is so much more! Primarily, yes, a warehouse stores raw materials or finished (manufactured) goods, ready for customers. In reality, there is a whole lot more going on in the background to ensure the success of a warehouse, including, but not limited to:
Location (close to airports, motorways?)
Layout (what is the optimum layout for efficiency?)
Capacity (are your products just in time or are they stored for a longer period)
Inventory levels (how much stock cover do you need to fulfil for customers?)
Automation vs manual (run by people, robots or both)
Warehouse management systems (what technology do you need?)
Customer service (think returns)
All of the above (and more) contribute in the wider business objectives. Be they market expansion, market penetration, product portfolio etc.
Therefore, a lot of consideration needs to go into a warehouse – it really isn’t just a big shed!
Where should a warehouse be located?
Although the high-level answer to this is simple – it should be located where is optimum for your supply chain, to go into detail you need to consider a number of elements (see the next section). At its most basic, we like this quote from www.ithinklogistics.com:
Now, let us dive into a little more detail, considering the key aspects for selecting a warehouse location:
Location
We touched on this briefly, but this really is key to any warehouse decision. Is the warehouse in a suitable location for delivery companies, employees, transport infrastructure and customers? Considerations with location should include:
- Accessibility to motorways and major roads
- Public transportation access
- Average traffic speed and volume
- Traffic peak hours
There is a sweet spot where the location will be optimum in terms of location (and therefore cost!).
Access to the warehouse site
Linked to the location, but specific to the site of the warehouse itself, how accessible is the warehouse?
When you select a warehouse, it is critical to understand if it will be fit for purpose. Elements to consider include:
Access for an HGV: This is particularly important if you are importing full container loads by ocean freight. These containers will be delivered by road and your warehouse will need to be able to accommodate them, ensuring they can drive up to the warehouse/ loading bays
Loading bays: Do you require loading bays to run your warehouse effectively?
Ramps: How are goods and products going to find their way into the building? Do you needs access ramp?
Equipment: To run a warehouse effectively (especially with palletised stock), you will require specialist equipment, including pump trucks, fork lifts and trolleys
Warehouse management
A critical decision that you will be required to consider is who will run the warehouse? If your operation is small, you should have no problem managing it yourself, with support from employees. However, once you run a sizeable operation, with many moving parts, you will need to consider support from outside, by way of a 3PL. Please visit our section on 3PLs (and others), which covers the different roles, support and considerations that you might think about when outsourcing the running of warehousing.
Employees
Without doubt, a crucial consideration, who is going to help run the warehouse if you keep it inhouse? Is there the local labour pool to support the running of your warehouse and are they cost effective? Aside from having people available from the local demographic, do they come with the required knowledge and experience, or will you be required to train them?
Warehouse layout
Whilst it is hard for us to provide detail on your specific layout of the warehouse, we can provide some guidance points for consideration:
Product type: What are you storing? Of course, if you are storing certain product types (e.g. goods that require refrigeration or specific handling and storage). Beyond that though:
Can the goods remain palletised and can they be double stacked for storage?
Do you need racking installed to store the product?
How much space is required for processing, repacking, labelling and fulfilment?
Tip: At LOGISTO, we massively underestimated the space required for processing etc. in our first warehouse. We were eager to save money, thinking we should fill the warehouse to the rafters with stock. Big error.
Processes
Running a warehouse is tough and you will need to implement Standard Operating Procedures (SOP) in order to make sure everything runs smoothly. For example, what is the process when a container arrives for unloading? Who is counting inventory, who is unloading and where do each of the products types go? Can the warehouse (and partners/employees) handle the following: inspection, stock count, stocking, packaging, relabelling, reporting, preparing for onward movement (perhaps to customers)?
Technology
The type of technology you will require to manage and support the running of a warehouse will vary dependent on the size and complexity of the site and your products. If you only have a few SKU’s and do not have massive inbound and outbound volume, then you might be able to handle the management via some well run inventory management tools or Excel! Adding a little more complexity and volume and you might find yourself needing some sort of automation (e.g. sorters) to support your operation. At the very least, a Warehouse Management System (WMS) might be required. We won’t go into detail in this section, but please visit our dedicated ‘Software’ sections for the Knowledge Centre and LOGISTO Directory to find out about the exciting advances in technology that supports both warehousing and the wider logistics industry. We guarantee you will be impressed with the growth the industry has had and the game changing nature of some of the software!
In summary
Choosing a warehouse location and fitting it out accordingly with the right people, equipment and technology is not easy. However, having some of the abovementioned considerations in your mind when considering warehousing will hopefully help the process.
As always, if you have any questions, then please reach ask a question via the Forum or contact the team here. Lastly, please remember to visit the LOGISTO Directory to locate warehouse providers in your area.
Thank you
LOGISTO Team