How to Choose a Warehouse Location
Warehouse location selection is critical in the overall success of your business. Key criteria for the warehouse location include the following considerations.
Freight costs both inbound and outbound. The location of your warehouse will have a big impact on your freight budget. Depending on the types of products you distribute, freight costs can be three times greater than warehouse costs. Therefore it is critical to find a warehouse site that optimizes your freight charges. This includes cost of shipping goods to your customers, cost of warehouse transfers and freight costs to receive purchased or manufactured items.
Real estate prices (purchase or leasing) associated with your warehouse will always be a big consideration when selecting a warehouse location. Regional variances in real estate pricing will need to be considered in your analysis of where to locate your warehouse(s)
Regional versus centralized inventory strategy will vary by industry. First decide how to deploy your inventory to best service your customers and optimize your inventory carrying costs. Once this analysis is complete, then you will be better able to decide on the number and locations of your warehousing infrastructure.
Customer service is always a top priority. Most supply chains are being challenged to improve order to customer cycle time. Your warehouse location selection will need to support your stated customer ‘order to delivery’ commitments.
These items are the major criteria to review in selecting a warehouse location. Take the time (or hire an expert) to analyze each one carefully in order find the optimal warehouse location solution for your company.