Warehouse Planning 101: What Things to Consider When Choosing a New Warehouse Space
There is a lot to consider when selecting a new warehouse space. But first, you should understand the warehouse planning process that results in selecting the best premises to meet your warehouse operation needs.
Selecting a new warehouse is one of the major decisions for a company. Due to the complexity involved in the purchase, the process can be overwhelming and confusing for most people. There are a lot of factors that need to be considered when opening a new warehouse facility. While price is an important factor, it is not the only thing that you should consider.
Here, we will inform you about the warehouse planning and identifying process that will help you in selecting a new warehouse that best meets your warehouse operation needs.
Important Factors to Consider When Selecting a New Warehouse
In order to make the right choice about the new warehouse, you must evaluate different factors such as space, location, and costs of warehouse operation in the new location.
Location is the most important factor when selecting a new warehouse. In order to determine the best physical location of the warehouse, you must ask yourself the following questions.
- Is the warehouse located near the customers?
- Will the supplier have any difficulty in transporting the goods to your warehouse?
- How far is the nearest carrier from the warehouse?
- How long will it take for goods to reach its destination?
- Will the warehouse employees have any difficulty in commuting to the location?
Answers to the above questions will help you in selecting the best warehouse location. Look for a location that best fits your needs.
You should consider both, your present and future needs when determining the space requirements for the new warehouse. Know that the warehouse space requirements are determined by maximum quantity (in both volume and tonnage) that needs to be stored in the premises.
Moreover, when calculating space requirements, you should consider only 70% of the total warehouse space as storage capacity. The rest 30% is allocated for proper handling, passageway, ventilation, and reloading space. Also, note that the warehouse space should be enough to accommodate seasonality in production.
Cost is another important factor that you must consider when locating a warehouse. Many companies bargain hunt instead of determining the actual cost of operating in the area. This leads to various problems down the road such as the cost of operating in the area is not feasible for the company.
Before selecting a warehouse, you need to ask the question whether it is more important to keep the square-foot cost down, or to minimize the costs of transporting goods safely, efficiently and at the lowest cost possible to the customers. What is best for your company will depend on the nature of your business.
What Should you Avoid when Choosing a New Space?
- No involvement of top management and other key warehousing staff in the new warehouse purchase process
- Not considering future needs when selecting a new warehouse
- Not calculating costs of transporting goods from the warehouse to the final customers
- Not taking into account future developmental changes in the new location
- Not thinking about long term value when selecting a warehouse
- Not determining additional space requirements
- Not considering needs of warehouse staff such as heating, ventilation, lighting, noise protection, sanitation, etc. when selecting a warehouse
- Not factoring receiving and shipping areas when determining warehouse space requirements
By considering factors identified in this article, you can select a warehouse that is the perfect fit between your operational needs and budget. You must compare the total costs of operating in different warehouses, and select one that best fits your need.
The company’s decision regarding the new warehouse will reflect on its bottom-line. Selecting a warehouse that meets the location, space, and budget needs will ensure efficient processes that will ultimately lead to reduced operation costs, and improved revenue.