UKWA FOR WEB - United Kingdom Warehousing Association

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24 Property Laurie Sice from warehouse and logistics property consultants sbh.uk considers the various factors involved in reaching the most informed and sensible decisions when considering a new storage facility Location, location, location Long before the diggers arrive on site, the wise logistics operator will have committed a great deal of time, effort and energy in deciding just where to locate the new warehouse. Anyone contemplating a move without thorough planning and research however may find they are stuck with a white elephant that may adversely affect the business for years, or maybe for decades to come. Sharp-eyed readers will have noticed that I referred to the ‘most informed and sensible decisions’, as in reality that is all one can hope for. There is no ‘right’ decision, because when considering a new capital project such as locating a warehouse, the team responsible will be faced with a number of conflicting factors which may each favour different locations. Their skill will lie in their ability to judge and evaluate the relative importance and risk attached to each factor at that time and to decide on the trade-off value each represents. In short, whatever is decided will have a large element of compromise. To move or not to move In many cases however where a company has decided that relocation to a new site will provide the extra space needed, it is worth taking some time to examine what could be done to avoid, or at least postpone, a move. Even the most efficiently organised move will involve heavy costs, upheaval and disruption to business and the loss of some key staff. If these problems can be avoided through better use of the existing site, the commercial advantages may be critical. Among the strategies worth considering are extending the premises to provide more storage space, and examining the storage medium to see if higher density storage can be obtained if stock holding is the issue. A local storage facility to handle seasonal or long-term overspill might ease the pressure. Increasingly companies are investing to make better use of the cube space by installing mezzanine floors, or some of the more advanced automated storage and handling systems such as Carousels and Lifts that use overhead space for storage, particularly over marshalling and dispatch areas, while leaving the floor level free for production, assembly or other functions. June 2008 www.ukwa.org.uk
Property 25 Know your warehouse Given that the new location is imperative, the first step is to determine the role the facility will play in the company’s current and future logistics scenario. A detailed dossier on the warehouse, its parameters, role within the company and function will provide essential information that may rule in – and rule out – potential geographical locations or specific sites. The ideal warehouse should be able to accommodate your current levels of business, yet have the flexibility to adapt in years to come; it should have low running costs, with the latest cost-effective heating, lighting and risk management fire engineering systems; materials will be durable, low-maintenance and aesthetically pleasing, and it will incorporate a range of other features individual to your business needs. And the occupier will want to measure the benefits for business in terms of costs, customer delivery performance and other key performance indicators. Each business will have its own unique set of requirements, but most projects will need to address the following factors in some detail: • It should provide a best fit solution for “With high and increasing fuel costs, road congestion and the shortage of drivers, one of the most powerful influences over the location of any warehouse will be the cost and operation of external transport” the business in terms of resource, costs and location relative to manufacturing, assembly, import/export locations and geographical customer distribution • The overall size and dimensions required, based on the usage pattern – whether the unit is for storage only, order preparation and fulfilment, a bonded warehouse or cross docking. • Nature of materials to be stored, as for example chemical and hazardous products may need to be sited further away from other buildings than non-hazardous products. • Volume and frequency of goods arriving and being dispatched will affect access – both from the nearest highway and into the building via loading bays. • External vehicle storage, reflecting staffing levels and the number of goods vehicles expected on site. • Staff levels and facilities: the modern warehouse will need to accommodate offices, in some cases laboratories and test areas and increasingly a high standard of staff facilities including canteens and rest areas. Transport issues With high and increasing fuel costs, road congestion and the shortage of drivers, one of the most powerful influences over the location of any warehouse will be the cost and operation of external transport. Should the site for example be closer to the manufacturing or import location or the end user – whether a factory, wholesale distribution, retail or a home delivery point What type of vehicle is currently being used, and would a different location provide the opportunity to switch to a different, more cost effective mode If the new location were rail-linked or close to an inland rail terminal, would this enable the business to move from road to take advantage of the potential of the growing rail freight sector None of these issues will necessarily help to find the most suitable location – but what they provide will be vital in enabling the management team to assess the viability of a short list. Traffic routes Despite the best efforts of many local authorities and regional groups, the majori Continued on page 26 www.ukwa.org.uk June 2008
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