What are the Benefits of Contract Warehousing?
Perhaps your business has outgrown its present warehousing capabilities, and you’re considering whether you should construct or rent the additional warehouse space that would be required, hire new personnel, and purchase more forklifts, conveyor belts, and other equipment. Have you considered contracting your warehousing needs to a specialist?
Contract warehousing as a viable alternative
You know your business better than anyone – that’s why you’ve been successful. Your business is growing, and now you need additional warehousing capabilities. Instead of being your main business, though, warehousing is only one component of your operations that can siphon off resources you need to grow other aspects of your business, some of which could be very lucrative. This is why you should consider the viable alternative of contract warehousing.
What is contract warehousing?
How does contract warehousing work, anyway? Contract warehousing means that you turn over the complete operation of your warehousing functions to a company that provides those services for you. The contractor performs all of the functions associated with material receiving, storage, and inventory, as well as shipping or otherwise transporting your products for you. Why would you want to do this? The simple answer is that outsourcing many of the mundane, yet necessary components of a business, such as warehousing, allows the owner to concentrate on the more creative and strategic sides of the business, plus it can save the business a substantial amount of money in operating costs.
Advantages of contract warehousing
Contract warehousing can provide advantages that are difficult to achieve by doing the job in house. If you have multiple locations, contract warehousing can centralize your operations, making your business more efficient. Maybe you began your business in one part of the country, but your client base has developed in another region. Establishing a warehouse near the client base might be a good strategic move. Contractors typically provide services to multiple clients, allowing them to streamline their processes and lower their operational costs, which can translate into savings for you.
Another advantage of contract warehousing is that, if your warehousing needs vary over time, you can contract on an as-needed basis, allowing you to quickly scale up or down as the situation demands. Warehousing contractors often can afford to install equipment and implement procedures that most businesses cannot unilaterally afford. Not only does this help to control costs, but it provides a higher level of service when it comes to such things as logistics management, inventory control, and records keeping. Controlling temperature and humidity are often included in the services offered.
Although you’ve been successful in growing your business into an operation that you are proud of, you’re always looking for ways to improve efficiency and lower your operating costs. To achieve that next level, you definitely should consider the advantages of contract warehousing.