If you run a business which operates with considerable quantities of stock, there are two things that you can’t go without, storage and distribution.
Logically, many businesses decide to try and integrate both in house by constructing a storage space such as a warehouse and investing in vans and lorries.
However, for some this just isn’t viable. Whether it’s a financial issue or a location issue, plenty of businesses opt to outsource one of the two, leaving them in personal control of just one of the two vital processes of their business.
The third option in all of this is to outsource both your storage and distribution to one 3rd party company, an option which could benefit you in a number of ways.
To show you what you might be missing, here are 5 reasons to consider integrated warehousing and distribution.
The problem with splitting your warehousing and distribution between an outsourced company and in-house operations is that you are likely not to be based next door to each other.
This causes obvious problems as it adds extra travel time between warehouse and distribution yard, whether you are delivering or collecting.
There are still issues even if you do both in-house. Unfortunately, not all of our businesses are positioned on a main road or near a port or airport which means our logistics team have to travel further than perhaps they should in order to collect or deliver deals.
The reason outsourcing both warehousing and logistics can improve your efficiency is because not only is there no issue of travel time between the two, but the company is also likely to be placed in a strategically better place than your business in terms of logistics.
To get a better take on this, we spoke to integrated warehousing and logistics company Masters Logistical who explained “we based our company strategically in Cambridgeshire so that local businesses in slightly more difficult locations can turn to us to help.”
Another positive both financially and physically is the reduction in administration work you will have to tackle.
Outsourcing to an integrated business means that all the delivery times, extra staff, extra wages and sheer work load is taken off shoulders entirely and placed firmly in the capable hands of your 3rd party integrated warehousing and distribution specialist.
All you need to do is supply them with the details of delivery and collection and hand it over to the pros, ultimately saving you employing any more staff and reducing your work load.
Something many businesses forget when taking on at least part of their warehousing or logistics themselves is the skills required to successfully do them.
In the case of warehousing, you need to consider hiring staff who have things like fork lift qualifications, someone who is registered as a racking safety officer (as well as booking in an official to visit at least once a year) and simply people who have had some experience in a warehouse.
The logistics is not dissimilar. Firstly, you need employees that have a driving license and depending on what vehicles you have, a heavy goods vehicle license too.
Outsourcing both of these to an integrated third party will take all these concerns and expenses off your hands. You simply pay your monthly fees and leave it to the professionals.
As your business grows one problem you will encounter (if you have in-house storage) is reaching your storage limit.
Expanding is going to be a costly move, buying new racking selves, an extension or new building and potentially more forklifts or other tech are all going to come into play.
If you outsource you will find that not only do these companies have acres of storage for you to expand into, but perhaps in the quieter months you can reduce your needed space.
This shrinking and growing all means you can change how much you pay across the year too, so you aren’t paying over the odds in the quiet business months.
As hinted to in most of the points above, no matter what business you run, the be all and end all is money, and opting for an integrated third party business could well save you plenty.
As any good business owner, trimming costs and operating at the same capacity (or even better) is surely an avenue worth exploring?
While some well established businesses might see this as a sideway step, if you are a growing company is worth considering.