Does your business need a bigger warehouse?
I’m often told by businesses that they need a bigger warehouse. This can be because they have no space in their warehouse, they cannot efficiently get to the stock they need or have safety concerns as aisles are not clear.
Moving to a bigger warehouse is a solution but it’s not the only solution. It should be the last option and not the first choice because changing warehouses is a substantial increase in costs. Not only will the business have a higher rent, they also have to consider the significant cost to move and cost of disruption to the business’ function.
The three key steps a business should take before taking the leap and committing to a bigger premises, are:
Step 1 : Optimise your stock levels. If the non-moving and slow moving stock is not addressed then the move into a bigger warehouse would only be a temporary solution.
Step 2: Use 3PLs ( 3rd party logistics providers). This is often a quick solution to store the excess stock at an external warehouse, but remember to be smart about what stock is kept there. It’s best to keep the slow moving stock in 3PLs to minimise the transactional costs.
Step 3: Increasing the capacity of the existing warehouse. Do not forget, warehousing capacity is not just about the floor space, it is about the height too. Smart layout of racking and use of the right equipment can bring major improvements in capacity.
These steps would ensure that you have addressed any issues that could cause the space shortage, but also provides you with options which could be more efficient and cheaper than moving to another warehouse.
If you need help on how to execute this, please feel free to contact me on my profile below