Going beyond the basic role a warehouse plays in a supply chain, real benefits can be extracted from a properly planned and executed design. Obviously, one of the biggest factors a company will look at when it comes to a warehouse is all the costs involved to build and operate it. Getting to the bottom dollar may initially seem like savings has been had, but taking a step back and looking at the supply chain from a holistic view will almost always save more money in the long run. Small issues in the warehouse or in other parts of the supply chain can have a trickle-down effect that can turn into larger and larger aggregating losses for a company over time.
As most of the costs associated with a supply chain are sunk into the transportation segment, often the warehouse is overlooked and underappreciated for the role it plays in a supply chain. They are often not given proper thought as to the functions they will perform. While some may think it’s as easy as putting up four walls and a ceiling, critical planning must be done to ensure that the design and functionality of the building are built to the correct specifications of the operation. LM recently spoke with two industry experts in the field of warehousing, Mr. Chris Catto-Smith, Managing Director & Principal Consultant at Freshport Asia and Kevin Burrell, Chief Executive Officer – Thailand, Philippines and Vietnam at DHL Supply Chain Thailand, to get their views on the warehousing industry and what issues they commonly see. The tips they gave us can be useful for almost any warehouse operation.
The Small Details Matter
When planning, designing, and constructing a warehouse, both of the experts we interviewed agreed that having an experienced professional managing the project is crucial. Real problems can start to arise when a company is looking to go cheaper by piecemealing out parts of the projects to different companies, fragmenting what should be done with one provider. Mr. Catto-Smith said, “Everyone is trying to find the rock bottom cost for their operation, but going cheap definitely has its downsides, especially in warehousing. Having an experienced professional looking over the whole of the operation can net the biggest savings, especially during the concept design phase. Taking a holistic approach by taking a step back and looking over the entire supply chain can help with savings across the board. For instance, a problem in the shipping side may only begin to start manifesting itself in the warehouse, be it delays or damaged products. Managers need to be aware of problems down the line, as it may inadvertently affect their operations in the warehouse.”
Mr. Catto-Smith continued, “Along with being too cheap, not putting enough flexibility in place is the downfall of many operations. You must expect that things can and will change from the initial plan. Keeping an open mind, planning, and expecting expansions at least 5 years out is only the starting point. An example of forward thinking is installing movable plugs for electronic equipment, allowing the movement of both machines and operations. It’s unlikely an operator will be completely satisfied with the layout of the operation from the very beginning. There’s bound to be at least a few changes needed. Leaving room for expansion and movement within the facility is key to making the operation flexible and successful.”
Finding and Keeping Labor Happy
As mentioned earlier, going to cheap on the warehouse operation can have adverse side effects. As Mr. Burrell says, “A common mistake that businesses may make is placing a warehouse in a hard to reach area, or an area where labor doesn’t preside. While land cost is obviously an important consideration, without workers nearby the cost of bussing them in each day can become very expensive. Dorm style housing keeps workers nearby and may seem like a solution, but the friction caused by living and working together takes its toll. Keeping workers happy and able to come to work easily saves both time and money.”
Once the workers are at the warehouse, keeping them happy normally equates to them operating more efficiently as well. Especially in the tropics, a key to keeping workers productive is keeping a reasonable temperature with proper air flow throughout the warehouse. Insulation not only in the walls, but on the ceiling helps keep heat to a minimum. Insulation helps with heat dissipation and is important, but a warehouse is still a metal box. Fans in the roof structure are a real key to keeping natural air flow moving, and makes it more attractive for workers too.
An often under looked aspect is the ability and ease that staff are able to clean and maintain a warehouse. When trying to save costs, an integrated solution is often not utilized leading to oversights. This is easily seen when walking into a warehouse and studying the racking set-up. If lighting was an afterthought, it will often not line up with racks making routine replacement of lights much more difficult. Keeping in mind that regular cleaning should be done, having inbuilt vacuum systems helps ease the regular chore of cleaning and dusting, helping to keep the operation spick and span.
A Comprehensive Approach
The way the goods are transported from and to the warehouse are an important consideration for a supply chain. Proper planning and foresight is key in reducing problems and unneeded cost down the line.
“Unitization selection is not only important for the warehouse, but keeping the entire supply chain in mind is crucial.” Mr. Burrell said
“How the goods are handled on the destination end should be a top priority as well. If the warehouse uses slip sheets and the destination end is equipped to handle only pallets, you can bet there’s going to be issues. Worse yet, the costs for the extra work are often passed through down the line. Having communication throughout the supply chain and nailing down the small details can make a big difference down the line.” Mr. Burrell said
While this isn’t a complete list of the do’s and don’ts of warehousing, it should help stir some more thought into the complicated process of warehouse design and management. A warehouse is just one cog in the larger chain of moving parts that goes into a supply chain. Utilizing a provider that can give a comprehensive view of the supply chain as a whole is invaluable to a business and can help identify the areas that need the most improvement. All of these tips and more should be considered before the first shovel of dirt is even moved at a new warehouse site. Proper planning of warehousing can help lower the stress put onto a supply chain and increases the efficiency of the operation as a whole.