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Practical Things To Consider When Setting Up a Warehouse

Practical Things To Consider When Setting Up a Warehouse

Some may think that setting up a warehouse is as simple as finding premises and storing inventory in one place until it is distributed. It is, however, far more complex than that. There is a great deal of planning and ongoing organizing required to run an efficient setup. A warehouse is, first and foremost, somewhere to create an efficient flow of materials. If you are going to be successful, it needs to run like a well-oiled machine. From premises to safety to staffing, here we will review some of the practical things that need to be considered when setting up.

Financials

If you intend to borrow to fund your business, most financial institutions or investors will want to see a business plan. They (and you) need to know that the figures are going to stack up in the long term. A business plan is a document that sets out a businesses’ future objectives and details the strategies intended to achieve them. It should cover things like the acquisition of stock, overheads, forecasted revenue and margins, and future growth, to name but a few. If you are unsure of how to put a business plan together, there are companies and specialists who can assist you.
Once you are up and running, you will need to track all of your income and expenditure. The latter needs to include things like stock procurement costs, rent, utilities, salaries, and other overheads and incidentals. You also need to carry out annual stock checks so that you know the value of your current and non-current assets.

Premises

One of the main decisions to be made in terms of the premises should be where your warehouse will be located and how big it will be. If you are outsourcing your distribution, consideration should be taken as to its location in proximity to distributors. Not only do you need to ensure that the premises are big enough for your stock, but also that there is adequate and safe access for whatever size vehicles may be required to transport goods to and from your warehouse. Internal traffic flow should also be considered. Checks should be made that necessary ventilation is put in place depending on the size of your building. Expansion is another consideration. Your intended premises may be big enough now, but what about a few years down the line? If things take off and progress as intended, will you have additional space to expand? The last thing you want to do is to have to consider moving.

Layout

It is important to consider your internal layout. This is something that could cost you a lot of time and money to change if you get it wrong in the first place. Think about what items need to be stored at floor level and which items can be stored higher up. How many levels can your premises safely accommodate? Storing upwards means less floor space needed, which ultimately may save money. Companies like Saferack supply various height platforms, rails, stairs, and gates to create walkways and access. This not only allows safe and sufficient storage of products but maximizes available space. It is also good to consider allocating specific areas for returned or faulty stock. The last thing you want is inventory being returned and no mechanism to track it. Having a separate area will allow quality control investigations to be carried out. You can also keep an eye on any ongoing supply issues.

Staffing

Consideration needs to be given as to how much staff you will need. You will not only need a good management team but an adequate number of on the ground staff. You need to ensure that demand is met with efficient and timeous supply. All directly employed staff should be on contract, inducted, and fully and adequately trained. Health and Safety are of the greatest importance in any company, so strict guidelines and policies should be drawn up. All staff should be made aware of these policies and confirm that they understand them. You may also want to employ a human resources manager. This will ensure that someone is in place to make sure you are complying with the required legislation and that contractual obligations are being met. You may want to set KPI’s (key performance indicators) or targets to staff and offer some form of bonus if these are met. This should ensure productivity is kept to the highest standard while motivating staff at the same time.


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by Brian Perry // Brian Perry is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.