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An Essential Guide To Building A Company Warehouse

Without warehouses, the supply chain will not thrive, leaving customers, manufacturers, retailers, and suppliers waiting for essential items for weeks and months. More importantly, the global e-Commerce industry will only be as robust as it is today if not for these commercial spaces. A warehouse is vital to any businesswhether an online merchant or notthat sells physical goods. With proper storage areas and fulfillment systems, companies can store their inventory, have them packaged, and shipped out to customers most efficiently. 

According to estimates, there were 151,000 warehouses worldwide in 2020. The continuing online shopping boom is seen to drive the numbers to 180,000 by 2025. If you’re planning to build one for your business, check out this guide for some insightful ideas. 

  • Be Clear With Your Company’s Objectives

As with any significant business movement, building a company warehouse requires owners to have clear goals for the project. What are the company’s priorities, and how does having a warehouse align with its vision?

The answer to this question must be clear from the get-go. Your company is bound to make poor choices in the location, design, and other essential warehousing elements unless you’ve settled on what your business hopes to accomplish. Additionally, it’s important to understand the firm’s current performance as a benchmark, so your company can set measurable objectives.

  • Set A Budget for Your Warehouse

The cost of building a warehouse varies greatly and depends on various factors such as location, size, materials, and layout. Apart from building construction, companies will also have to spend on industrial equipment for handling materials, stocking goods, and automating the process.

Companies should consider the following cost factors when erecting a warehouse:

Warehouse

  • Building construction costs 
  • Office equipment 
  • Warehouse management system (WMS) software
  • Positioning devices like clamps, worktables, etc.
  • Transport equipment like forklifts
  • Storage tools like shelves, pallet racks 
  • Packing and shipping equipment like boxes, pouches, bags, label printers, and scales
  • Barcoding and scanning devices

Operational expenses like fuel costs, maintenance costs, warehouse staff wages, electricity bills, and consumables must also be considered.

  • Identifying The Right Location  

As with any other real estate transaction, location is a significant consideration in setting up your business warehouse. Ideally, your warehouse must be strategically placed and accessible to your staff, suppliers, transport, and shipment hubs.

Is it easy to scale?

A forward-looking company must also think about its future operations. Consider how much tax rates your company has to pay in the location and whether the area is suitable for expansion or future operations. Visiting several potential sites and knowing the locality’s development plan can be helpful before deciding where to build the warehouse.

Workforce issues

Despite the automation of some warehousing operations, human intervention is still needed in various tasks like picking and packing. More importantly, staff members must operate the WMS and other software tools. 

Relocating interstate workers to the newly built warehouse can be challenging, and some might refuse or quit. That said, ensuring workforce availability in your chosen warehouse location is crucial. Hiring staff members with warehousing experience is best, but you can give trainable workers with the right attitude a chance.

  • Size, Design, And Layout of Your Warehouse

These have got to be three of the most critical components of a warehouse—yet it can be easy for businesses to make mistakes in one or all of them. 

In most cases, company warehouses are built to improve the fulfillment process. These include sourcing raw materials, storing inventory, shipping the products to customers, receiving and processing, or picking and packing the goods. Within these processes are workflows that optimize efficiency by improving space usage, inventory management, and the safety features of warehousing operations. 

Size requirements

An excessively large warehouse leads to high operational costs, while an undersized one can lead to inefficiencies. Either way, wrongly estimating your warehouse size requirement is a costly mistake.

There’s no standard warehouse size, as business and consumer needs are always shifting. But the need for larger spaces has been noted in a study by the real estate services company CBRE. Comparing current and previous demand peaks, the company found out that the average warehouse size built in the US between 2012 and 2017 increased by 108,665 square feet compared to 2002 and 2007 figures.

Nevertheless, it’s vital to consider your entire business operations when assessing your needs. Think about the types of products you keep and the warehouse’s inventory movement. Once you’re done contemplating the size, you can proceed and think about the warehouse space and layout.

Design and layout

Warehouse

Besides storage capacity, you must allot space for other tasks like sorting, inventory, packing, and shipping. You’d also have to include the office area and additional workflows specific to your business type. These elements will decide how your warehouse will look and influence your decisions, including the ceiling height, column spacing, etc.

Think about how your operations will look once everything is set up. Visualize how the materials are placed in the warehouse, where they go, and how they are sorted. Additionally, consider the next stages involved in picking, packing, and shipping. This step is crucial whether you operate a physical or online store, or both. 

Establishing the flow of materials inside the warehouse and maintaining worker accessibility and safety are paramount before deciding on the design. A poorly designed warehouse will hamper the entire warehousing operations and expose your staff to certain occupational risks. 

Contractors often have experienced in-house warehouse designers who can help you with this crucial construction planning component. Before sealing the deal, ask for a copy of the design and conduct a final analysis of the product flows, equipment placements, and staff positioning.

  • Choosing The Right Contractor

After going through your company’s objectives and warehouse size, design, and layout, choosing a contractor comes next. Picking the right warehouse building experts to work with is crucial in making your vision come to life. The contractor should provide valuable warehouse construction insights and ensure the project stays on track. 

Here’s how to do it: 

  • Ask other businesses for referrals. 
  • Read the reviews and contact at least one of their previous clients.
  • Make a shortlist of three to five companies and ensure that they’re reputable and experienced in building commercial warehouses. 
  • Ask for a quote and proposal from each builder and compare them. 
  • Study each proposal and pick the one that aligns best with your business goals. 

Your budget will likely be a significant contributing factor to this decision. But going with the cheapest or priciest quote isn’t always the best way. Think about the company’s reputation in the industry and the trust its clients have in the firm. Go for the contractor that provides the best value and possesses the most capability without going overboard with your assigned costs.

Concluding Thoughts on Having a Company Warehouse

A warehouse is essential to the growth and success of a company that produces and sells physical goods. With it, companies can store and manage their inventory and make the order fulfillment processes more efficient and scalable. 

Thus, setting clear goals and identifying the right elements, including construction experts, are crucial when building a company warehouse. Getting these things right eliminates the risk of significant operational constraints and business losses in the future.

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