Distribution Center

Making the leap from single warehouse operations to opening multiple locations is exciting. After all, this means that business is growing and it’s time to expand. While there are many advantages to utilizing more than one warehouse, this type of development also comes with multiple challenges. By balancing the need for individualization and collaboration, utilizing the best available technologies, and taking into account the physical characteristics of your spaces, you will find yourself much further along on the road to success in managing multiple warehouses

Benefits of Multiple Warehouses

Establishing more than one warehouse offers many advantages.

  • Expand your customer base while reducing shipping & transport costs. Your physical presence in a new market gives you the chance to grow your clientele. At the same time, opening a new location allows you to ship and transport to customers in the vicinity at a lower cost.

  • Increase your storage capacity. Extra warehouse space allows you to introduce new products and keep high-demand products in stock.

  • Simplify management by assigning certain products to certain warehouses. Having multiple warehouses allows you to consolidate specific products in particular locations and can streamline order fulfillment processes.

  • Benefit from increased accessibility. With warehouses in a variety of locations, your business can more easily access raw materials and stored goods. In addition, if one warehouse is taken out of service due to a natural disaster or another emergency, the business can continue to move forward without significant disruption.

Difficulties of Multiple Warehouses

As in most areas of business, there’s always another side to the coin. Managing more than one warehouse can present some unique challenges.

  • Inventory analysis can get complicated. Variations in supply and demand from one area to another can make it difficult to sustain optimum stock levels in each particular warehouse.

  • Managing inventory can get complicated, too. Maintaining those optimum stock counts gets more complex when working with multiple warehouses. Stock levels and sales can quickly become incompatible without a clear picture of what you have across the board. It’s important to have a system that will allow you to differentiate between identical products stored in different warehouses and efficiently direct order fulfillment.

  • Mix-ups become more common. With remote employees running different warehouses, miscommunications are inevitable. If you use a central filing system, it’s common for orders and shipments to become mixed up between locations. And it can be challenging to standardize procedures and customer service across all locations.

Tips for Success

Managing multiple warehouses becomes most effective when these challenges are addressed.Some of our favorite tips include:

  • Individualize solutions for each location. No doubt you will use some sort of centralized system to manage your warehouses (we even suggest it below!). However, it’s important to remember that each location is unique and will have its own customer demographics, employee foibles, sales figures and performance. A product that is in high demand in one area may not be in another. Resist painting all of your warehouses with the same brush - maintain solutions for each individual location.

  • Individualization shouldn’t preclude collaboration. Even though each warehouse operates individually and should be treated as such, it is possible - and beneficial - to share goods, resources and employees between them. Does one location have a surplus of an item that the other location needs? Is one warehouse in need of experienced staff that can be transferred from another spot? Collaboration among warehouses can solve these and many other challenges.

  • Establish an effective, accurate inventory management systemInvest in the technologies that are available! Utilize a centralized warehouse management software with analytic capabilities that allows you to monitor stock levels across each location, transfer products from one warehouse to another, create purchase orders, and run reports that shed light on supply and demand of particular products in specific locations. Use these metrics to plan your inventory levels at each warehouse.

  • Consider the physical characteristics of your warehouse. Sometimes, it’s hardest to recognize the need for the simplest, most practical changes. Taking a look at the layouts of your warehouses and ensuring that they are designed for efficiency can go a long way toward successful management. Well-organized warehouses can lead to faster, more accurate shipping. Label all shelves and ensure that products are in the correct place. If your warehouse is large, create a map that is accessible to all employees. Move popular products closest to the exits so that employees can get those orders out the door the fastest. And ensure that your warehouses are outfitted with the right flooring so that your employees can work in comfort and safety.

Managing multiple warehouses is not for the faint of heart, but with some strategic planning, the right software and plenty of creative thinking, you’ll be on the road to managerial success.