5 Tips on Selecting the Perfect Warehouse for your Business

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Luis Gan, VP Business Development

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October 11, 2018

Moving into a new warehouse is a large investment of time, effort, and money. Finding the perfect home for your products, business, and staff could be very tedious, especially with all the factors to consider. Here are 5 quick tips to selecting the best warehouse for your business.

Product Requirements
With a wide range of warehouse sizes, shapes, technologies, and features, be sure to list down the specific needs for your product and business before you begin your search.
Size and ShapeWill the shape of the warehouse be optimal for your business? Some warehouses can be shaped in typical square or rectangular fashion, while others may be L-shaped or may have additional floors. Map out the desired layout of your products, organisation of manpower, and consider the equipment that will be using the space. Factor in open spaces, walkways, and allowances for loading/unloading to know what size shape is optimal for your business. Consider the movement of your goods and plan the optimal shape to reduce movement and travel which could be costly.
Climate and Temperature ControlSome goods have very specific needs in terms of temperature and climate control. Frozen food requires cold-storage facilities and accessories. Packed food, beverages, personal care products, and pharmaceutical products may require certain storage temperatures and moisture levels to keep products in good condition.

Location and Accessibility
Warehouses are usually intermediary locations for stocks - between the manufacturing plant and customer or retailer. The location is paramount in determining how quickly it is to both receive and send goods. A rule of thumb in choosing a good location is proximity to major transport routes including highways, railways, or sea ports.

If you are a small business, it is more advisable to locate near your primary customer base or near your office to facilitate ease of communication and delivery.
For larger businesses, consider accessibility to larger geographical areas to maximize the reach and output of each warehouse.

Also, consider the types of vehicles used for inbound and outbound deliveries. Take note of traffic restrictions on certain vehicles, and if the driveways can allow delivery trucks to maneuver in place without disrupting the surroundings or causing traffic. This would solve a lot of headaches in receiving and dispatching.

Workforce Availability
Your warehouse will need manpower to run day-to-day operations. Evaluate the job market in the location you are planning to place the warehouse. Ensuring a good workforce supply can reduce risks in shortage of employees, turnaround, and absenteeism. Locations that are difficult to access or simply distant from a workforce population can increase costs or would require additional expenditures such as temporary housing. Locating in an area with a lot of warehouses nearby can also give you access to an existing talent pool of experienced workers.

Vision and Plans for Expansion
With the costliness and large amounts of effort required to transfer into a new warehouse, make sure your new location will accommodate your company’s future growth or additional requirements should the needs arise. Analyse the company’s projected growth and volume of stocks, plan the requirements ahead of time, and factor in the expansion plans before choosing a warehouse. Consider the longevity of the current warehouse, seasonality of products, and possible new directions the business will take in order to find a suitable warehouse for the present and future.

Comparing Additional and Implicit Costs
Apart from the monthly rent or cost to build a warehouse, be sure to consider all additional operating costs and implied costs of any particular warehouse and compare with other offerings. There are choices between a smaller floor area with a racking system versus a larger floor area, costs to renovate and procure missing tools, costs of constructing certain structures or office space compared to renting a warehouse with existing structures.
There will also be implicit costs for distance of delivery. The further from the city center a warehouse is, the cheaper the rates are. Locations nearer to the city center will be usually be more expensive to rent, but could provide significant savings in terms of delivery and travel time.

In summary, there are numerous factors for consideration in determining the perfect warehouse for your business. Put in extensive planning of your business needs, conduct numerous site visits, and even bring along architects and engineers to evaluate the warehouse. The extra effort in planning, strategizing, and surveying for your next warehouse will be worth all the unforeseen costs that could arise from making a poor decision impulsively. Choosing a warehouse well and conducting all l the due diligence will ensure you won’t have to do it again anytime soon.

Luis Gan

VP Business Development

Former Procter & Gamble Sales and Key Account Manager
University of PH Business Admin Magna Cum Laude 2017

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