All organizations supply chain will have and require a warehousing function. The warehouse space can be owned by the organization, a third party logistics company, or a public warehouse. From time to time, additional warehouse space is needed due to a variety of factors. These factors can include peak season inventory, a warehouse construction project, or loss of warehouse space. Regardless of the reason, using public warehousing can be a useful solution for supply chain management issues.
The public warehouse offers services in addition to providing space for stock. These services include shipping, inventory counts, and inventory management. The public warehouse charges rates based on storage volume and services provided to their clients. It is not necessary to hire the public warehouse staff or to purchase warehouse equipment.
Public warehouse owners pass these costs along to their clients based on storage rates that are charged.While most organizations view public warehousing as an interim solution, using the services and convenience of the public warehouse can result into a long term engagement. Public warehouses have a significant investment in keeping their warehouse features modern. By offering clients increased flexibility, public warehouses have a goal to attract new clients and retain existing ones. Additionally, public warehouses offer a wide range of labor services such as picking and packing.Public warehouses allow clients to use proprietary software to update shipping and inventory tracking with real time statistics.
Organizations must consider a variety of factors when choosing a public warehouse.
The location of the public warehouse is the first consideration. Due to shipping costs and inventory time management, an organization might be well served with a public warehouse that is close to their existing facilities. Conversely, another organization might benefit from a location closer to its customers to be used as a hub by its other facilities.
Technology is another consideration. Software integration must be compatible with the organizations ERP applications. While most public warehouses are current with the most modern technology, organizations need to choose one that supports their established information systems.
The ability to expand storage and services is another factor. An organization must be sure to use a public warehouse that can adapt and support the changes needed in storage space. Any agreement with a public warehouse should include support for expansion and additional space requirements. The contract should always include a clause addressing added services and space requirements.
Some public warehouses are a part of a global network. This is very important if an organization plans on using the public warehouse as a shipping solution. Not all public warehouses belong to a national or global network. Generally, a public warehouse with a large network is better suited to handle expansion and the need for additional services.
Flexibility is another factor to consider when selecting a public warehouse. Supply chain management requires a fast response to changing demands. Short notice occupancy and add on services need to be provided by the public warehouse operator. Choosing an operator that provides flexible services will help an organization reach its warehousing goals.