The challenge is to identify efficiencies and maximise value in today’s omnichannel world. Making assets, both owned and shared, work as hard as possible is crucial to delivering this.
Manufacturers, both small and large, require increasingly flexible warehousing options; some find themselves with excess space outside of peak and others want the opportunity to scale up to meet increased demand. Sharing warehouse space provides an efficient and attractive solution.
While the idea of sharing office space is nothing new to business, the concept of sharing a warehouse in a ‘multi-user’ environment is a relatively unfamiliar concept; particularly where two or more competitors share warehouse space. This can function where a single provider (such as Wincanton) manages the shared user site which houses multiple customers, or where a brand lets out excess space in their warehouse to collaborate with another business.
Below, Chris Chaplin, Director of Consumer at Wincanton, shares his thoughts on how to ensure that a multi-user warehouse is a successful one.
Identifying the right type and volume of space is one thing, but if it’s in the wrong place, it won’t work for your business. Consider where your centre of gravity needs to be; close to your suppliers/production site or nearer your customer? Does it need to be near a port? Do you need the space in one site or across multiple warehouses? And importantly, how does the location link with your (or your provider’s) transport network?
Consider the size and scale of the space you need, and then ask yourself how this will change over time. One of the main benefits of a multi-user site, when well managed, is the ability for the provider to flex the space between users. The space can be scaled up to accommodate the peaks of one user, while reducing it for another who needs less at that time. You will also need to consider the compatibility of your products with others, do they need a specific temperature regime, away from contaminants/glass, to be duty suspended in a bonded warehouse, do you need a yard, what are your security considerations, requirements for custom-built racking etc. And can the provider accommodate this?
The commercial terms you agree will be relative to the level of risk involved. Are you looking for a short or long-term agreement? Can you flex the space? What are the risks and benefits of sharing a site with other users?
A shared-user site managed by a single provider can offer a range of add-on services which are available for all and which may be unaffordable for a single user. For example, Wincanton offers co-packing, ecommerce, two-man delivery, carrier management and returns processing on-site, which all add value to the process and reduce the end to end cost of the supply chain.
The logistics business is nothing without its people. In a shared-user or collaborative site, you are relying on a workforce which may not be your own. As part of your due diligence ensure that any shared-user site has a well-trained body of staff which can be supplemented during peak periods and has the skills (and safety standards) to provide the value-added services described above.
As a manufacturer/retailer, you may employ a host of technologies in the warehouse; from order tracking and inventory management, through to a full Warehouse Management Systems. These systems will likely link with others in your business - sales, transport, returns management or a combination of these. Will your systems integrate with the provider on a multi-user site? Is there a ‘plug and play’ option? How can the shared-user provider support you to make this work?