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How to Choose a Warehouse Location

August 20, 2019 warehousing

Warehouse location plays a pivotal role in a modern business strategy.

It’s a sort of a make-or-break decision that profoundly impacts all aspect of your operations. Nowadays, pressures on business supply chains have never been greater. What is at stake is your ability to serve customers profitably and efficiently.

Therefore, you have a lot of ground to cover. In other words, you would be wise to plan and strategize ahead of time, according to clear selection criteria.

After all, there’s no such thing as a one-size-fits-all solution. Warehouse location must match your unique needs and set you up for growth and expansion.

Here are some key areas to focus on in order to get the most bang for your buck.

Think in Terms of Customer Proximity

The first thing to do is ponder your market base.

Perform detailed research on existing or potential customers. Figure out location(s) that can serve as reliable sources of business.  Being close to these nexuses shortens delivery times and cuts shipping costs.

This is to say the ideal location is close to as many of your customers as possible. You might even have a chance to provide coveted same-day delivery.

But, it’s important to go beyond back-of-the-envelope calculations. Get serious with math and work out the exact transpiration cost from a warehouse to customer addresses.

At the same time, see to it you’re not too close to neighbors, even if they are your customers. Warehouses can be quite noisy and discharge various emissions. The trick is to maximize your responsiveness without outstaying your welcome.

A Matter of Workforce Accessibility

Workforce availability is another vital aspect we cannot stress enough.

Geographical locations aren’t created equal when it comes to the presence of skilled workers. The price of hiring and covering salaries could also vary depending on laws of supply and demand. Moreover, competing businesses hamper your ability to attract and retain people.

These are no meager factor in terms of their influence on overall business costs. They also have an effect on retention and turnover rates.

So, develop a deeper understanding of the local demographics.  Examine education and income levels. Government websites should provide enough details on these data points.

The main goal is to confirm supply meets the objective of offering on-time delivery. If you want to keep the wheels turning 24/7, this could be a real challenge.

Connectedness to Other Services

Your warehouse is part of a broader service and linkage ecosystem.

For instance, being near the carrier, supplier, and manufacturing facilitates is highly beneficial. It can supercharge the shipping and transportation processes. Things become much easier and more convenient for everyone, including your customers.

This time around, you need to calculate transpiration costs from service facilities to your warehouse. If you can afford it, go for an all-encompassing location that enhances the supply chain.

Notice easy access to roads, exit ramps, and highways with proper signage add to the potential value of location. This component boosts productivity and allows you to do a better job at serving consumers.

In case the trucking is your primary mode of transportation, you stand even more to gain. You can optimize fuel consumption, lower the risk of accidents, and minimize time waste.

Storage Capacity and Building Features

Next, it’s time to assess the physical premises.  

First off, factor in any special accommodations you require for products. This is crucial when storing toxic, flammable, food, and fragile items. They involve strict safety standards and storage specifications.

It goes without saying you don’t want to ever compromise on priorities like these.

Secondly, check out build parameters, as well as the layout and flow of the warehouse. When it comes to specific features, they include rail sliding, turning lanes, trans-loading, etc.

Don’t overlook internet and connection services either. Examine general availability, as well as speed and link type.

Thirdly, think about what type of storage makes the most sense—racked, trailer, or bulked. Similarly, you may have to choose between chemical/foam systems and water-based solutions. Take your time to go over these dilemmas and prioritize solid inventory control.

Keeping Up with Evolving Business Needs

Moving on, it’s preferable to find spacious enough warehouse for the long haul.

Namely, the facility should accommodate your needs now and in the future. Quickly outgrowing it faces you with logistics nightmare and unnecessary costs. Therefore, evaluate projected growth and compare it against available square footage.

While at it, investigate whether you have enough room around the facility for expansion. This aspect gives the location much more longevity.

Just to stay on the safe side, you can opt for a lease/rental contract with flexible storage options. One common mistake to avoid is overestimating your capacities. Your business may occasionally actually shrink and leave you with giant overheads with little to show for.

In the wake of this scenario, seasonal warehousing arrangements save the day. The takeaway is clear: never to lock yourself in a deal that hurts your agility and adaptability.

Grasping the Full Financial Picture

Lastly, expenditures always have their place on the list of concerns.

Rental rates and taxes are the most obvious example of how your decision matters a great deal. In general, rates depend on square footage and months of lease. That being said, landlords can decide to go above and beneath the market average.

They may also fail to disclose the fact that utilities aren’t overly energy-efficient. So, investigate their availability and cost yourself.

Depending on the type of warehouse, you’re more dependent on some utilities than others. Refrigerated buildings, for example, require more electricity and water.  In any event, be wary of anything that inflates operating costs.

To mitigate the financial blow on your budget, keep an eye on local government tax incentives and special programs

They either give you a nice boost or discourage the investment altogether.

Warehouse Location: Achieving Success by Design

Picking a suitable warehouse location must never be aforethought.

It calls for extensive planning and research— these activities pay immense dividends in the long run.

First off, take into account the customer base, overheads and storage requirements. Try to be close to the manufacturing location and secure skilled workforce.

This list is not all-inclusive, but it’s a great starting point.

Another crucial thing to remember is you might not be able to maximize each element. It usually comes down to trade-off and balance between different moving parts. But, you can come close to the ideal solution and avoid most of the headaches.

If you want to get ahead of the game, feel free to check out our services. We offer top-notch delivery, warehousing, and logistics services to our clients.