In my twenty years in the warehouse logistics industry, I have visited a lot of companies and warehouses in Scandinavia. The view of warehouse logistics varies greatly between companies, also the degree of maturity in development and knowledge regarding warehouse logistics.
The priorities regarding investments and focus of development can differ significantly from company to company and sometimes surprises me. There is really no right or wrong. However, I wonder sometimes why companies keep investing in some warehouses even if the location and/or facility is so obviously wrong. Remember, you can never compensate for a bad location or bad facility with high-end technology like automation and so on. You have to prioritize the right to get the maximum potential from your investments
The right location
First, you have to decide the physical location of the warehouse. Choosing the right warehouse location can make all the difference in how efficient and profitable a company is. Leasing or purchasing a warehouse is a major decision, and choosing the right location can significantly enhance a company’s ability to compete and effectively serve customers. It affects for example inbound and outbound transport costs, workforce availability and labour costs.
I understand a startup company does not think about this in the beginning but if your company starts to grow and becomes a success you need to make a strategic decision as soon as possible. The longer you wait, the more expensive will a relocation be. Even if you cannot invest in a relocation now you can stop all investments in your current facility.
I have seen warehouses out of civilization but the company have invested so much money in automation and conveyor systems that it is almost impossible to relocate. If you make the decision in time, you do not risk ending up in a situation like that.
Facilities with technology
Second, what facility should you choose? I have seen the strangest warehouses you can imagine. I wonder who has been in charge and not decided to move! They have often invested in advanced conveyor systems, automation and so on everything to be able to handle the growth in current buildings, but it never ends up good, due to too many compromises because of the facility.
As in the above point, I understand a startup company using a cheap building often made for another kind of business, but it is very important you relocate as soon as possible if your business starts to grow. I repeat you can never compensate for bad locations and facilities with technology. If you try, you have made twice as many mistakes.
You need to start in the right order. When looking for a new warehouse, you should consider the longevity that it can offer. It is important that you do not outgrow the storage facilities too quickly. Analyzing figures that indicate the potential growth of your business should be carried out before you start searching for your ideal warehouse, and then you can factor this into the space requirements.
If you think of the warehouse relocation or moving to another facility in the near future focus on leadership and WMS. You can achieve a lot with that. Both are also very important in the moving process of a warehouse. An established WMS can handle a warehouse move easily, often you can scale up your current system with the new warehouse. That makes the moving transactions to new locations easy.
If you have the right location and have the right facility for your purpose, read my blog to develop your warehouse to a world-class standard.
Roberth Karlsson is a logistics expert and the author of roblogistic.com.