warehouse location considerations.ppt
- 1. Explain factors to be considered in warehouse location and design. QUESTION 6
- 2. Introduction • Build/Lease Considerations • After you decide which warehouse best fits your needs, you must take into consideration the locations to either build or lease. • If you’re a seasonal product it might make the most sense to find a location that offers seasonal warehousing. • Ensure you’re properly informed of immediate square footage storage offerings in addition to the long-term options available • Physical Location • When deciding on which warehouse to use, choosing the one with the best physical location is important. 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.
- 3. • Availability of Skilled Workforce - Purchasing a building in a remote area may cost less, but it can come at a cost, with a shortage of skilled or trainable workforce. It is best to be located in an area that will have ample supply of the proper mix of skill sets which will support your operation for example near high density residential area. Cont’d
- 4. Cont’d • Zoning and Intensity of Use - How intense is your operation and what are your needs going to be in the foreseeable future? However other items to consider are noise levels, emissions and need for outdoor storage. These needs will drive which districts to target for your new operation.
- 5. Cont’d • Storage Requirements From hazardous materials, flammable product and food items, many companies manufacture products that have strict storage and fire fighting requirements. Always be sure to also take any environmental concerns into consideration, are there any streams, ponds, etc. in close proximity? • Staging/Material Handling Capabilities - Another factor to consider is availability of staging facilities and handling equipment. If the primary mode is truck/trailer, does the facility have depressed docks and is there a need for these docks to be internal? Perhaps a highly intense distribution use will need cross docks. In addition, are there ample outdoor storage facilities and is there turning room for material handling equipment and trucks?
- 6. Cont’d • Location of suppliers: Consider the current shipping locations of your suppliers, as well as the delivery locations you’re arranging for customers. Where are most of those deliveries being made? Are your warehouses located in the optimal zones to minimize the costs for both your company and your client? • Access: Any public warehouse you’re thinking about contracting or considering as a major distribution center will need to be easily accessible from major highway arteries. Additionally, if you’ll be importing or exporting a great deal of material, they should also be close to major port locations with strengths aligned with your product type. . A key factor to keep in mind is that 20% or more of your costs come from transportation of your goods.
- 7. Cont’d • Experience: Check their established date to make sure it’s a good balance of age, showing they’ve weathered the test of time, combined with newness of the facility with modern technology and touches to make things flow efficiently. Too old can mean antiquated processes, but too new can mean they’re still working out the kinks, so to speak. Additionally, what are they experienced with? • Employees: Compare the size of their facility to the amount of employees and determine if you feel it’s a good fit for the type of service you require. Are the employees knowledgeable about the types of services you need provided?
- 8. Cont’d • Risk: When you’re using an outside vendor for warehousing, this can remove a significant part of the risks associated with logistics. Your partners will shoulder some of this burden as they help to resolve potential issues and work proactively to reduce traditional issues associated with moving product with machinery. • Processes: How many doors do they have, and what is their system to manage the inbound vs. outbound traffic? Do they have a set staging procedure? Can they handle inspection, storage, dispatch, inventory, reverse logistics, packaging, labeling, or reporting?
- 9. Cont’d • Client Profile: On average, how much square footage do each of those clients occupy? If they have 50 customers who only occupy a small amount of their space, that could be a warning sign that the warehouse doesn’t have the experience to attract larger companies with more sophisticated requirements to command larger square footage utilization. • Storage Area: Will their storage area provide the capacity you require? It’s important to not only ask about their storage area, but more specifically, what is presently available to you. Do they anticipate any storage becoming available in the future in order to accommodate your growth?
- 10. Cont’d • Technology: What type of Warehouse Management System do they use? Can your system for processing orders and managing your supply chain integrate with theirs? What type of handling equipment are they utilizing? If your product lines are numerous with assorted SKU’s, you may need to search for warehouses with more advanced robotics or sorting conveyor belt systems to minimize human error when loading the trucks.
- 11. Cont’ • Association Memberships: Are they active members of any well-known associations that can lend an extra bit of credibility to their operations? If they demonstrate their commitment to being card- carrying members of the IWLA (International Warehouse Logistics Association), for example, that shows they are interested in presenting themselves among groups of their peers, learning, gaining resources for improvement, and demonstrating their value over time.
- 12. Cont’d • design • Flow • Cubic capacity • Ability to integrate materials handling equipment, • Truck access • Trailer storage , • Freeway access
- 13. Cont’d • Turning lanes • Tpt cost • Space availability • Security and utilities • Cost of either buying and building or leasing
- 14. Warehouse Design Building /Construction Lease/ Rent/ Contract