Many company’s supply chain will incorporate some warehousing function. This can be company-owned, owned by a third party logistics (3PL) company or could be a public warehouse. At certain times, extra warehouse space is required due to any number of factors. Whatever the reason the use of public warehousing is a useful tool for the supply chain manager as they try to find the greatest efficiencies in the supply chain.
The public warehouse is not only a facility where a company can store their products, but the public warehouse offers inventory management, physical inventory counts and shipping functionality. The public warehouse charges their clients for a certain rate for the goods stored, the volume of the warehouse used and the services the client wishes to use. The company using the public warehouse does not have to employ warehouse staff, does not require any inventory software or warehouse equipment. The owner of the public warehouse is responsible for the costs and passes this on to their clients based on the rate they are charged.
Although most companies see public warehousing as a short-term solution it can often turn into a long-term relationship as companies been accustomed to convenience of the public warehouse services. Companies that own and operate public warehouses, invest significantly in modern facilities to remain competitive. They offer clients increasing levels of flexibility in order to retain and attract additional clients. Public warehouses offer companies a range of labor solutions including picking, packing, inventory control software and dedicated workforce. Public warehouses will also allow clients to bring in their own warehouse software so that the public warehouse becomes a satellite location with real-time data.
Criteria for Choosing A Public Warehouse
Because of the increasing competition between the public warehouse operators, potential clients should review the capabilities of each potential warehouse to identify which would be the best fit. Each client will have a number of factors that need to be considered when selecting a public warehouse. Companies have a variety of reasons why they require an outside warehouse, as well as their short-term and long-term needs and the price they are willing to pay for the service. However, the majority of the following criteria is likely to be used by all companies comparing public warehouse sites.
- Customer Service
- Company Network