A warehouse is an essential link in a supply chain network, whether local or global. The location of the warehouse determines the efficiency and speed of supply chains.
Current supply chains compete primarily on their delivery lead times and costs.
A warehouse’s processes can enhance the speed of material flow through a supply chain. When choosing a warehouse, make sure to consider this.
But what is warehousing?
Warehousing refers to storing products in a facility that distributes or sends to a final customer. The warehouse is where the goods are brought in, stored, tracked, and distributed.
Warehouses consist of:
- warehouse facility
- backend system
These enable businesses to control their inventory and order processes.
An e-commerce website stores its goods in a warehouse. After receiving an order, the goods are picked, packed, and shipped.
In contrast, goods are stored in warehouses and distributed for regular retail.
A new business usually begins by storing goods on its premises. The spaces they use include a garage, a storeroom, a small apartment, etc.
As they grow out of this little space, they encounter problems with order management. So they turn to a 3PL warehousing partner to handle their inventory.
Warehouses are becoming one of the most critical components of a global marketplace.
A warehouse located in an optimal location ensures that supply chains are successful. As a result, your business can have lower costs and higher profits.
Therefore, choosing the right warehouse partner is a priority for a business.
So, it is always vital to choose a warehouse based on a thorough analysis. It will help you determine which partner is best.
Here are some key factors to consider when choosing a warehousing partner.
Here are some questions you could ask when selecting a warehouse.
- First, are there any existing warehouse clients you recognize?
- Approximately how much square footage does each client occupy?
The existence of 60 customers who take up so little space in the warehouse is a red flag. The warehouse is not ready to accommodate larger companies with more complex needs.
Select a stable logistics provider no matter how complex or straightforward your logistics setup is. High-quality suppliers are dependable. However, rapid changes can compromise product quality.
A high-risk event can also occur. And if your provider cannot handle the impact, the liability shifts to you. But, again, having a provider with a solid name and reputation can help ease this concern.
A warehouse’s location directly impacts your whole supply chain. The timing of delivery and storage of manufactured goods determines how quickly and efficiently the processes occur.
When choosing a warehouse, choose one convenient to transportation hubs, such as ports or highways.
The fulfillment of orders in major cities is quicker than by warehouses located elsewhere.
However, warehouses located in remote rural areas may have cheaper storage or be nearer to transportation hubs.
Warehouses use SKUs to keep track of inventory items and estimate how much space is needed to store them. As a result, each shelf, bin, or pallet may incur a different storage fee based on a per-SKU or by-foot rate.
For instance, different boxes, expiration dates, and packaging would need separate storage containers if you sell beauty products. In addition, storage fees increase as the number of product variations increases.
Warehouses place minimum order limits on large companies with thousands of SKUs. This solution is ideal for companies that can turn over their inventory quickly since they do not have to pay high storage fees.
However, a standalone warehousing solution would be more cost-effective if you sell slow-moving products with many SKUs.
Make sure the existing warehouse is experienced and durable by verifying established dates. Combining this with the facility’s newness and modern technology will ensure efficient operations.
In general, old systems can mean inefficient processes, but new systems have to resolve issues.
Furthermore, if they have prior experience, what industry was the warehouse or structure used?
For example, food manufacturers and distributors who want to pass their FSMA requirements need to hire a warehouse with extensive experience maintaining strict food grade standards.
Are there many warehouses entry points, and how do they manage inbound vs. outbound traffic?
Does the warehouse have a standard staging procedure?
Do the standard services come with the package, or is special assistance an extra cost?
Here are some questions to ask when looking for a potential 3PL warehousing partner. It is crucial to know all the warehouse processes and help your business.
You must select a warehouse with a strong safety record, as safety regulations constantly change. First, take a look at the safety ratings.
We cannot stress the need for a warehousing facility to have safety measures. Some of the things to look out for are:
- Security cameras
- Trained staff
- Fire alarms
- Security personnel
Before making a decision, pay attention to all the security measures the warehouse offers.
Does the warehouse owner use a Warehouse Management System?
Are they able to integrate your company’s order-processing system with their warehouse management system?
When your company has many product lines with various SKUs, you may need to look for warehouses with advanced robotics and sorting systems integrated. For example, the conveyor belt systems increase safety and reduce errors when loading trucks.
To be precise, a sophisticated product line needs to seek a partner that provides regular reporting about the product moving into and out of the facility.
Ideally, the platform should be web-based and accessible at any time, from any location. In addition, warehouse managers and logistics firms must remain up to date on the latest technological innovations. They must add more advanced technology to warehouse management and logistics systems.
Future technologies, including drones, are soon to become widely accepted. Warehouses and supply chain processes will run smoothly using advanced technologies.
Find out if the warehouse has experienced and reliable workers. To find out, here are some questions you could ask.
- How well-trained are the workers to handle the products?
- Are the warehouse employees familiar with the types of services required?
- How will they meet the needs of specific customers?
- Will you have a dedicated account representative to help resolve questions and concerns?
Considering the local demographics is also essential. The skill level of the workforce is equally important as the cost and availability of the crew.
A gap in service will result in poor customer satisfaction and reduced productivity. To determine whether the facility is a good match for the type of services your company needs, compare its size to the number of employees.
Looking for a warehousing partner should take time as it is more than asking what time does UPS delivers to your buyers. It is a massive part of customer experience and will reflect on your business. While your buyers are just concerned about when they will get their package. You know that there is more to it, and warehousing is not easy. So, take your time to shop around and find the partner that best suits you.