The Logistical Lowdown

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Is Limited or Scarce Warehouse Space Something Your Company Should Worry About?

Posted by Julie Wanstedt on 10/31/16 10:00 AM
Julie Wanstedt

Isle in a warehouse with shrink wrapped product stacked on both sides

Warehouse space in areas like Georgia and Texas are seeing an unprecedented lack of vacancy. According to a report from Colliers International, this is a reflection of a national trend. The report uncovered a “critical need for more extensive logistics and warehousing networks in towns and cities worldwide to support urban, online demand.”

What does this “critical need” mean for your company? How would a scarcity of space impact your supply chain activities? There are few major areas where a lack of space for product can create major problems.

Overcrowding

Trying to pile inventory into an overcrowded warehouse leads to too much product and too little space. That can seem great for customer fulfillment, but will most likely create problems. Pallets blocking aisles, stacked in docks or mixed SKUs leads to a lack of product visibility and difficulty locating products. With that comes decreased productivity and shipping delays.

Inventory Issues

If there isn’t space to put new inventory, where will it go and what impact could that have on your bottom line? Likely, it will cause a delay in meeting customer needs and fulfillment. That, as you can imagine, won’t be good for business. Just because there is a lack of space to keep product doesn’t mean there is a lack in ordering. Customer needs will stay the same, your business will just have issues fulfilling the need.

Safety Problems

All those pallets in aisle ways and crowding docks? That spells problems for warehouse safety. While maximizing warehouse space is great, creating safety hazards is not. 

While all of those problems are very real, particularly with the continuing growth of the e-commerce market, one way businesses can work around it is to investigate off-site storage facilities. Companies that specialize in warehousing are referred to as Third Party Logistics providers (3PLs) and know how best to utilize space as well as work to ensure supply chains are not interrupted, and, subsequently, customer fulfillment maintains the level expected. 3PLs can also offer short-term and flex space client agreements around seasonal sales, as well as the ability to create dedicated warehouse space for those customers thinking long-term.

While this critical need for warehouse space can create problems for many companies, it can also mean opportunities. Many 3PLs are improving current spaces by upgrading and expanding to appeal to customers. So, while scarcity of this resource can be a problem, smart warehousing companies can create an invaluable benefit to customers.

Learn more about Keller’s Warehousing capabilities here.

 

Topics: 3PL, Warehousing

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