In today’s complex world of supply chain logistics where company owners closely scrutinize every component of operations, warehousing issues can sometimes be overlooked. However, a smoothly run warehouse is essential to efficiency, which enables effective transportation of goods and ultimately impacts customer service.
There are many challenges that decision makers face, both when weighing the available options for warehousing and when looking at future complications.vAt the same time, they must take into account the particulars of their industry and be prepared to adjust as circumstances change with regards to typesvof commodities and marketing channels. Exploring some of the most common warehousing issues can help supply chain specialists plan for different contingencies.
Public, Private or Contract?
When looking at options for warehousing, there are three primary solutions that have a bearing on your supply chain logistics decisions. Public warehousing is typically done on a monthly basis and the cost is set at a price per square foot. This is usually available on a short-term basis, but is also the most expensive option. A private company might be more reasonably priced over time, with the advantage of giving the tenant more control over operating the space. However, there are significant upfront costs. Contract warehousing is the final option, in which the space is rented for a fixed period of time. These are typically more affordable than public arrangements, and might include features such as dedicated docking space and around the clock security.
Consider Future Growth
You also have to consider what the future holds for your business, as your demand and supply chain logistics will affect your needs for more or less warehousing space. This is especially true if you’re entering into a long-term lease during which many unforeseen circumstances may arise. It may be wise to find out whether you can make adjustments to your space depending on changes in the economy and varying logistics channels, and make sure the proper language is included in your lease agreement.
Establish a Forward Thinking Inventory Plan
Whether you’re getting settled in a new warehouse or have been in the same spot for years, smooth supply chain logistics rely upon properly organizing inventory to take account of future needs. One of the most frustrating statistics that logistics executives deal with is the time consumed by employees fruitlessly searching for inventory items. A possible solution may be to conduct a full warehouse site evaluation to determine the best stocking plan for your inventory based upon available space.
Location, Location, Location
Just as you keep an eye on what the future holds with other warehousing issues, you should how your choice of location might impact future supply chain logistics. If you’ve opted for a spot that is ideally located to the transportation channels you need, it’s possible that these networks could change over time. A rail line could be rendered defunct or a port’s operations may be limited when authorities don’t have the resources to dredge for larger ships. In addition, it may make sense for you to establish a warehouse base close to a major customer or company manufacturing headquarters.
Other considerations may impact your decision making on warehousing options, such as additional costs, ease of access and specialized services. The bottom line is that it’s important to consider future operations, both foreseeable and unforeseeable.