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consultants logistics l

premises with good eaves height, sound flooring and layout, adequate yard and appropriate office space, it is estimated that only 1.3 million square metres of the second-hand warehousing space on the market at the end of 2010 met these requirements.

As speculative new development has been very limited since 2008, in some areas, organisations considering a move from constricted warehouses may have no choice other than to commission a new build.

In these cases, companies should be aware that construction cost increases exponentially with the footprint of the building and that higher warehouses are significantly cheaper to build. It is also interesting to note the typical cost breakdown of building a new warehouse, with construction and labour costs each representing 40% of the total cost, whilst equipment and management each represent just 10%. It therefore makes sense to increase the amount of equipment within the warehouse if this will reduce the construction and labour costs. For example, buying MHE such as electric pallet trucks rather than using pedestrian trucks, or conveyors for moving goods from one area to another, may prove to be more cost effective than using manual labour.

Future flexibility

Of course, those that get it right today must be sure that it will also be right for tomorrow and should aim to build flexibility into their operations, taking account of demand fluctuations throughout the year and how their business might look in two to five years’ time.

resulting in increased costs and lower service levels.

This can quickly become a downward spiral as stock records become more and more inaccurate and goods aren’t in the right place for picking or replenishment. To put it right, a full stocktake is needed, which draws the attention of the Finance department – and then life does become uncomfortable.

Processes and controls Good processes, backed up with strong controls and discipline are critical to keeping operations running smoothly. A good WMS will force this

to happen, but companies have to be prepared to adhere to the rules and controls the system instills. Building in processes that force discipline is all part of the overall plan.

Obviously, optimisation can only achieve so much and companies experiencing rapid growth may have no choice but to invest in a larger facility.

According to the property experts King Sturge, only around a quarter of the second-hand warehousing premises available to rent or buy in the UK is suited to modern day logistics operations.

With occupiers demanding large

Over time, volume growth, new markets, different service demands and product changes affect the demands on warehousing. There comes a time when existing facilities can no longer provide a cost effective and flexible solution and a re-think is necessary. In addition to the provision of consultancy services to help companies optimise their warehouse operations, Davies & Robson offers training to enable their own staff to better understand the principles underlying the design, structure and operation of a warehouse, identify the ways in which current operation can benefit from improved warehouse design and to master the techniques, systems and disciplines that make for efficient and effective warehouse management. ● May 2011 ShD 41

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