A Checklist for Small Businesses Looking for Outsourced Warehousing Services
It is an exciting time when small businesses start to outgrow their existing infrastructure. As sales pick up and consumer interest grows, extra storage space becomes necessary to keep enough stock on hand and organized. This is where warehousing services often come into play. A third-party warehouse and fulfillment centre will allow your business to get the storage space and distribution logistics set up and operated in an effective and efficient manner. However, not all warehouse operations are created equal, so it’s important to make sure you are getting quality warehousing services. To that end, here are some elements to keep in mind when evaluating candidates. Use the following as a checklist and mark off whether a candidate service possesses or lacks any necessary aspects.
Warehouse Location and Physical Properties
The most basic thing to keep in mind about a warehouse service is where it is located and the physical size of its operations. When evaluating a potential warehouse, make sure to assess the following:
Size of the Building
Make sure to look at the building in light of your current and potentially future needs. Is it large enough to offer what you need right now? If your growth continues along projected lines, will it still be enough after three or five years?
Number of Bay Doors
The bay doors are used for shipping and receiving, with the number of doors dictating how many containers can flow in and out of the warehouse each day. You may not necessarily need a dedicated bay door for your business, but you also don’t want to be stuck with products waiting to ship and no way to send them out. Inquire about the number of containers that can be shipped and received per day and how your products will fit into the overall flow of the warehouse operations.
Proximity to Ports, Airports, Rail, Highways, Etc.
One of the benefits of using warehousing services is that it allows you to take advantage of being strategically located near major routes of traffic. Having easy access to major highways or air or sea travel helps make shipping and delivering easier. Obviously, the exact sites you want to be near will depend on your business model. For example, if you primarily ship across the country, you have less need to be near a dock, but will benefit more from highways and possibly airports.
Most third-party providers of warehousing services split their sites up among different clients, which means that you are only going to be able to make use of a portion of the total space in the warehouse. Make sure that the space that is available is going to be enough for your needs. For instance, it is common to need a bit of extra room during high-volume periods like holidays or big sales; will it be possible to get that extra storage space or is everyone packed too tightly together? Flexibility is important and shouldn’t be discounted.
Warehouses make use of numerous types of storage and transportation equipment. Many of these are considered basics of warehousing activity, so you should press for an explanation if any of the following are not used at a candidate site:
- Pallet racks
- Flow racks (used for pick and pack)
- Scanning stations
- Packing tables
The warehouse workers are going to be provided by your warehousing services provider so you won’t necessarily have control over who is handling your products. However, this does not mean you can’t inquire about the staff and learn more about them. Consider looking into some of the following:
Certification and Training
Knowing if employees are trained in elements like Six Sigma, Kaizen, or Kanban, or what their training procedures are in general, lets you understand the kind of performance you can expect. This information also lets you get a sense of how professional the workers are going to be in carrying out their duties.
A higher-than-normal turnover rate should be viewed cautiously. While it could be benign, a constant cycling of new employees means overall effectiveness will suffer since there are fewer experienced workers around. It also means you may need to become familiarized with new workers more routinely if the turnover affects your own area.
Background Checks and Probation Periods
Knowing how thoroughly a warehousing service screens employees is good for peace of mind. Further, understanding the probation and training period lets you know how long an employee is monitored before they are considered fit to work on their own.
Consider what is motivating the warehouse workers. Do they get bonuses for speed, safety, or other merit-based elements? Are promotions or raises based on seniority or other factors? Understanding what incentives employees are given can give you a sense for workplace moral and enthusiasm.
Information technology is becoming an increasingly central part of warehousing services and any candidate is going to be making use of various systems and interfaces to help manage the flow of goods through the warehouse. Be sure to check for the presence of any of the following and ask for specifics about their capabilities:
- Warehouse management system
- Transportation management system
- Yard management systems
- EDI, RFID, barcodes
- Inventory control and location management systems
- Flexibility of systems (how modifiable are they?)
- Name of IT manager (for collaboration)
- Integration and customization abilities of systems so they can be linked to your business
Finding Warehousing Services with Lean Supply Solutions
Lean Supply Solutions is a third-party logistics fulfillment company whose operations are based around the “Lean Methodology,” a proven philosophy focused on eliminating any operations, equipment, or resources that are not capable of adding value to a client’s supply chain. By striving to ensure that the right products are provided to the right customers at the right time, Lean Supply Solutions is able to offer consistent, predictable, and quality results. To learn more about the Lean Methodology or outsourcing to Lean Supply Solutions, or to ask any questions, give us a call at 905-482-2590.