Unlike most businesses on the web, the warehouse sector is a traditional business model that depends on a strategically situated physical location to serve different businesses across the country. The location of any warehouse is an important factor, since it will impact the logistical efficiency of outbound goods.
Rather than saddling themselves with the vast amount of financing required to buy their own warehouse, many small companies opt for warehouse services and simply pay an affordable monthly fee in return for efficient goods management. Obviously, the amount payable is down to the amount of goods being stored, the nature of the goods, and how much racking space the consignment is going to take up.
Choosing a Provider
When choosing a warehouse service provider, you are actually handing over a significant responsibility. For this reason there are a lot of things you should consider when choosing an outsourced warehouse to manage your storage and fulfillment requirements. A mismanaged warehouse could result in late or damaged shipments. Try to choose a provider that has a good warehouse management system in place and knows how to use it, this will go a long way towards ensuring that your goods are handled in an efficient manner.
To really get a feel for how well run a warehouse is, ask them about their everyday activities, do they perform cycle counts? Can they manage rolling inventory? A recent study showed that rolling inventory could potentially save businesses up to 9% of their warehousing fees since it results in a huge reduction of both warehouse storage space and labour.
Assess Your Warehouse Service Provider In Person
Don’t just make your decision based on the warehouse providers marketing materials, if at all possible, you should visit the warehouse in person during operational hours, and try to get a feel for what kind of operation they run. Do the staff handle the goods with respect? Is there a huge backlog of goods sat on the loading docks waiting to be put away that indicate the warehouse is operating beyond it’s capacity? There are lots of signs you can pick up on when visiting in person that will tell you whether or not this is the warehouse service provider you want to go with.
Not only will the location of your warehouse service provider affect the logistical costs of goods being shipped from the point of manufacture to storage, it will also affect the logistical cost of outbound goods being shipped to your customers. For this reason it is usually smart to pick a warehouse located centrally. When you ship from point of manufacture to the warehouse, the consignment will always be a full truck, but customer orders leaving the warehouse for delivery could be anything from a single box, to a few pallets, it therefore makes sense to prioritise efficiency on this leg of logistics since it has higher inherent overheads.