As we approach the end of the year, the peak season for supply chains is winding down. How did it go for your operation? Was your ramp up in volume accompanied by tidings of great joy? Or, a sense of stress and consternation? If you’ve been going it alone and feeling overwhelmed, we’re here to spread a little holiday cheer by telling you about shared warehousing – a key third-party logistics (3PL) benefit that can support your volumes as they expand and contract before, during, and after your peak season.
Peak season shared warehousing
In the shared warehouse (or “public warehouse”), you utilize – and pay for – only the space and resources you require as your require them. Best of all, that space and those resources are flexible – able to grow and shrink as your volume and operational needs dictate. Let’s see what that looks like during peak season:
Increasing space to match volume. Let’s say that you required 10,000 square feet of warehousing space in the months leading up to the holiday season. As the holidays approach and your order volumes increase, however, you need to grow that space to 15,000 square feet. No problem – your 3PL can scale your space upward to accommodate you. And, if your space requirements go back down to 10,000 square feet after the holidays, your 3PL can scale downward just as easily.
Shared warehousing is also an attractive option for companies that go it alone or have another warehousing arrangement for most of the year, but need space and resources during their busiest periods.
As an example, take a customer of ours that specializes in selling Christmas-related products on QVC leading up to the holidays. We receive their containers, palletize and store their products, deliver them to QVC, and perform additional QVC vendor support services as needed. We allocate our shared space and resources to them when they need it (i.e., up to and during the holidays), and they’re not tied to any contract for the periods of the year that they don’t require our services.
Staffing operations to match volume. Just as the amount of required space tends to increase during peak seasons, so does the labor needed to support our customers’ operations. Many 3PLs will meet peak season demands by ‘borrowing’ associates from their other facilities and/or by hiring temporary workers for everything from pick and pack to kitting services and rework projects.
And, while it’s often easy to find temporary associates, it’s not always easy to ensure that they’re the right ones for your operation. You’ll need to discuss qualifications and vetting processes with your 3PL to make sure that your supply chain’s quality is preserved.
At Kanban, when we hire temporary workers, we make sure that they are fully vetted and screened (employment history, drug screenings, background check) before coming onboard. From there, our ISO certification principles dictate that we train these employees to the extent we would a full-time employee. In fact, many of our full-time associates started as temporary workers.
Controlling costs to match volume. In addition to the flexibility of shared warehousing, many companies are drawn to its tremendous cost savings opportunities. To illustrate, let’s say that you have an ecommerce operation that nearly doubles its orders around the holidays. If you were to handle the entire operation – both peak and non-peak – yourself, you would have to create or otherwise pay for your own fulfillment warehouse space. And, you’d have to “build the church for Easter Sunday” – ensuring that it’s large enough to handle peak periods, thus paying for unused space during the non-peak periods in which the space is not used to capacity.
You would also have to spend the time, energy, and resources finding, vetting, and training temporary workers yourself, and ensure that there are adequate numbers of supervisors and QA experts to manage them and/or check their work. This can put a large strain on your existing workforce – and your wallet.
With the shared warehousing model, conversely, you simply pay for what you need when you need it. The “meter is running” when you say it is, and there are virtually no expenditures of money, time, or resources on your part when it’s not.
Kanban Logistics shared warehouse solutions
At Kanban, we offer shared warehousing within our three Eastern North Carolina warehouse campuses in Rocky Mount, Tarboro, and Plymouth. These campuses are located within 2 hours of the ports of Norfolk and Wilmington, and shipments from these locations can reach of 70% of the U.S. population within one day. Our campuses offer a wide range of services and capabilities including transloading, cross docking, vendor-managed inventory, temperature-controlled warehousing, and rework services.
Contact Kanban today to learn how our facilities and expertise can support you at your lowest volumes, your highest volumes, and everything in between.