It is no secret that making the right choices in regards to both warehousing and distribution methods could make all the difference for your company. Supply chain pressure is at an all time high. Glitches can impact a company’s shareholder value by more than 20 percent. Where warehousing services are located are important for a number reasons and is a consideration that should not be overlooked.
The main mode of transportation used to receive or ship goods to and from the warehousing services needs to be prioritized. If that is not possible, then you should at least explore facilities with easy access to highways and roads. You want to be as close as possible to the point of the most predominant transportation mode. This helps to control costs. It also allows your business to have the maximum number of containers possible. This is due to the fact that demand is not consistent and supply can often be unreliable. Moreover, there are also fluctuations in customer demand, as well as inconsistent supply. Warehousing services act as a buffer so that businesses can ride out the variations in supply and demand while still meeting customer service requirements.
The warehouse services you choose should also be as close as possible to your company’s major suppliers, producers, and/or customers. This helps to make the supply chain more efficient as it reduces lead times, decreases transportation costs, and increases responsiveness.
Choosing a location for your warehousing services is also affected by the workforce. This is because not every geographical location can offer a workforce that has the right skills at the right price. Moreover, if there is low workforce availability and high demand salaries will be high and cause operating costs to be higher. Moreover, workforce skills are also critical. If there is a skill gap in the workforce, it can result in low levels of customer service, as well as a reduction in competitiveness and productivity.
All of this is especially true if you will need to relocate your warehousing services due to size increase and decrease. You do not want to have to do this research all over again as your business ebbs and wanes.