With fewer people shopping in stores during the coronavirus pandemic, retailers have been expanding their online presence. Online customers expect fast delivery times, and preferably next day delivery. When online orders increase, it’s time to look at expanding warehouse capacity to store extra inventory.
Here are five points to consider when expanding your warehouse:
1. Projected increase in sales
It’s easy to calculate current demand, but future sales are difficult to forecast and plan for. What happens when the coronavirus crisis is over – will online orders revert to pre-coronavirus levels, or will customers prefer ordering online? Warehouse capacity needs to cope with current demand and projected future sales.
There is some data available to base predictions on. Research whether your customers check delivery times before ordering – if delivery speed is a factor that affects buying decisions, a warehouse set up for next day delivery is important.
2. Shipping cost savings
It may be worth opening regional warehouses closer to major centres of population. If couriers only need to travel short distances to deliver orders to customers, they will be open to negotiating reduced shipping rates. Lull Mattress, for example, reported that it saved 30% on carrier costs by using regional on-demand warehouses. It also reduced delivery times by 51%.
Regional warehouses don’t have to carry the full inventory. Amazon, for instance, has smaller warehouses that sell high-demand items, which are delivered within hours of ordering.
3. Inventory management
If inventory demand is monitored, it could be that there is too much stock for certain items. It may be possible to negotiate with suppliers to order smaller quantities more often. If it’s efficient to carry smaller stock of some items, the warehouse may not need much extra capacity.
4. Warehouse management systems
When expanding a warehouse to hold more items, it’s a great idea to look at warehouse management systems (WMS). With more lines and expanded inventory, it’s vital that pickers find items quickly. A quality WMS will plan picking routes so that pickers travel the minimal distance necessary to locate multiple items.
WMS can also improve productivity and efficiency, alongside reducing order processing errors.
5. Equipment
After the above factors have been considered, it’s time to order extra equipment. Shelves or racking will be required, and plans drawn of where each rack or shelf aisle is to be located. Extra pickers and packers will likely be recruited, meaning that more picking trolleys and packing stations will need to be built.
At Steely Products, we are here to supply the warehouse equipment needed to cope with extra warehouse capacity. We have a range of standard equipment, including picking trolleys, packing tables, shelves and specialist storage equipment.
If you contact us when you plan the expansion, we can suggest the best equipment for your needs. We can also create bespoke equipment if any of our standard products are not an exact match for you.
If you are planning a warehouse expansion, give Steely Products a call or contact us via the form below.
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