Your company is considering its warehousing options. You can invest in the necessary space and labor and handle it yourself. Or, you can partner with a warehousing provider and pay for a set amount of space and labor in its warehouse(s). But, what if there is no “set amount?” What if your volumes fluctuate? When that’s the case, partnering with a flex warehouse provider may very likely be your best option.
What Is a Flex Warehouse?
Commonly known as “public warehousing,” flex warehousing offers your company the amount of warehouse space and services you need when you need it. Imagine a big square warehouse with (hypothetical) wall-divided sections inside. But, instead of being set in stone, the walls have wheels under them. Some months, the walls are rolled outward and give your section more space, while other months they move inward, giving you less space and your fellow occupants more. This is the flex warehouse.
Using the Flex Warehouse Model to Reduce Risk and Costs
Does your operation operate at the same volume all-year round? Or do you have low- and high-volume periods (e.g., the holiday season)? If your volume fluctuates, then your warehousing needs should follow suit – saving you money and reducing your risk in the process. Ideally, you want your warehousing and logistics costs to parallel your company’s revenue stream.
Reduce Risk. If you build and staff a warehouse yourself, you take on a high amount of risk. Build it too big and you’re stuck wasting money on unused space. Build it too small and you pay for your space, plus additional space from an external provider to meet peak demand periods. The same too-big-or-too-small game applies when leasing a “set amount” of space (i.e., “contract warehousing”) as you’ll be locked in to the parameters you set at the start of your agreement. Flex warehousing removes these risks and allows you to fill a slot in an existing infrastructure that’s as big or as small as you need it to be.
Reduce Space Costs. As stated above, a flex warehousing provider will charge you for space you actually use each month. Just like a parking meter, you only pay for the time and space you need. That will include a storage charge and the inbound and outbound handling charge for that given month.
Reduce Labor Costs. As with space, the flex warehouse model allows you to pay for only the services you need. Let’s say that you have a busy month while your warehousing neighbor is having a slow one. Cross-trained associates can be shared between accounts to avoid the incremental costs of temporary labor.
What to Look for In a Flex Warehouse Provider
Flex or otherwise, warehousing is much more complicated than simply placing goods inside a large building. It helps to work with experienced 3PLs who understand how to manage costs for companies with demand peaks and valleys. Key items to consider include:
Temporary labor. Severe demand spikes could require short term temp labor. The right 3PL will have existing relationships with reliable staffing agencies and clear process for working short-term labor. A poor temp solution can actually cost you MORE money – inaccurate orders, poor productivity – if inexperienced workers are recruited and thrown on the line with little training.
Warehouse Management Systems (WMS). When your items are stored, you’ll need to rely on the warehouse management system of your chosen partner. Such systems are designed to provide you with real-time visibility into the status of your inventory along with shipment status, parcel tracking and more. You will want to ensure that your warehousing provider’s system can handle the specific needs of your business.
At Kanban, we specialize in flex warehouse services from our campus in Eastern North Carolina – a perfect central location that is halfway between Miami and Boston. We also can combine warehousing with a host of value-added services such as rework, kitting, packaging, returns processing, cross docking, and North Carolina eCommerce fulfillment. To see if our services are a match for your needs, contact us today.