Four Things to Consider When Choosing Warehouse Locations
There are many factors to take into consideration when opening a new warehouse facility. From location and build to storage requirements and labor force availability, making the right choices in regards to both warehousing and distribution methods could make all the difference for your company. While the below are what we consider the most important, this list is certainly not all-inclusive.
When deciding on which warehouse to use, choosing the one with the best physical location is important. The first question to ask yourself is, which region are you looking to serve? Ensuring your product is stored in a region near your customers is important for prompt deliveries. This also factors into considering cost. Calculating landed transportation costs to facility from manufacturing, and expected transportation costs from facility to end customer, will help decide where you can afford to keep your product.
The location’s proximity to carrier facilities should also be taken into account. Look for an all-encompassing solution that offers both warehousing and transportation to get the most bang for your buck, or ensure your storage facility is as close to your carrier as possible.
After you decide which warehouse best fits your needs, you must take into consideration the locations build and lease parameters. Does the warehouse offer rail siding or transloading? Will racked or bulk storage be offered, and what suits your needs best?
Just the same, plan to consider what type of rental contract your warehouse offers. If you’re a seasonal product it might make the most sense to find a location that offers seasonal warehousing. Or, if your product’s demand ebbs and flows, can the location you’ve chosen offer more or less space depending on the time of year? Ensure you’re properly informed of immediate square footage storage offerings in addition to the long-term options available.
From hazardous materials, flammable product and food items, many companies manufacture products that have strict storage and firefighting requirements. Is the location you’ve chosen properly suited to handle your unique needs? And how will they handle the different requirements for products that require a chemical/foam system versus a water based system? Always be sure to also take any environmental concerns into consideration, are there any streams, ponds, etc. in close proximity? Asking these questions now will help you avoid disaster later.
Labor Force Availability
Fully understand the labor force available at your new warehouse location. Knowing your labor needs and seeing how they stack up against the facility’s is essential to ensure on-time delivery and future growth. Will the warehouse facility operate 2nd and 3rd shift (24 hour operation)? Are there competing businesses in proximity that will become a barrier to growth by limiting available labor capacity?
By taking the time to consider the above, you can limit frustration and ensure you’ve found the perfect fit for both you and the warehouse you’re selecting.
John Wisser is the director of warehousing & distribution at A. Duie Pyle, and has been with the company for fifteen years. Wisser is a graduate of Penn State University with a degree in Business Operations Management. In addition to his education and time with Pyle, he is a member of Distributors and Consolidators of America (DACA).
Gartner: CEOs Want Their CSCOs to Focus on Cost and Digital
Chief Supply Chain Officers (CSCOs) will be expected to double their efforts in cost optimisation and digital transformation if they are to best support the short and long-term growth of their businesses, according to CEOs surveyed by Gartner.
The research and advisory firm surveyed 199 top executives from supply chain intensive industries between July and December 2020. It found that, perhaps unsurprisingly, the pandemic has shifted the focus dramatically away from undefined innovation projects towards concrete goals to bring resilience and control to their value chain.
Around a fifth (17%) of business leaders said they want their supply chain chiefs to gain greater control over spend and cost saving, while 16% believe they should dedicate their efforts towards supply chain resiliency - both in response to the impact of the pandemic.
“CEOs are tasking their CSCOs to focus on navigating through the ongoing disruption and ensure business continuity,” said Thomas O’Connor, Senior Director Analyst with the Gartner Supply Chain practice. “This includes dealing with pandemic-related lockdowns in key markets, supply chain shortages – as seen in the semiconductor industry – and challenges with the global flow of goods and increasing distribution costs.”
Supply Chain Digital Transformation Must be More Targeted
With 60% of those surveyed expecting an economic boom by the end of 2022, CEOs are also tasking CSCOs with redefining their transition to digital. The majority of respondents (80%) indicated they would be increasing year-on-year incitement in technology, but will aim to move away from nebulous digital transformation projects, instead focussing on targeted initatives.
CEOs said they need their supply chain chiefs to identify where and how digital can best support the business within the context of their specific industry or organisation. Areas most commonly cited were ecommerce/ebusiness (16%), customer interactions (9%), data analytics (9%) and customer experience (7%).
CSCOs must Prepare for Pandemic’s Impact on Business Change
More than two thirds of executives surveyed by Gartner said the pandemic had been a pivotal moment in realigning their business, with 79% expecting the outbreak to leave a lasting and transformational impression on the behaviour of society, and their organisation and individuals.
“Already, a range of companies have committed to social responsibility and sustainability goals – a huge integration challenge for supply chain leaders that manage global networks,” O’Connor added. “This means supply chain leaders need to establish metrics and goals for themselves and their partners, and ensure their targets are met across the whole value chain.”
This represents an enormous challenge for CSCOs, who will be at the forefront of managing and defining the evolution of their own organisations, as well as those of their supply ecosystem and partners throughout the value chain.