In today’s highly competitive business environment, operational excellence with specific focus on various supply chain aspects such as distribution warehousing is highly critical. Improvement in service standards, reduction in cost leading to margin improvement and enhanced operational performance are basic objectives of warehousing and distribution operations.

It is important to consider all aspects from initial planning stage to implementation stage for setting up warehousing and distribution solutions.

Key factors which need to be considered are:

Warehouse Strategic Planning — Selection of most efficient storage designs, material handling systems and warehouse management systems so as to ensure peak operations performance.

Distribution Center Design and Implementation— Creation, maintenance and administration of budgets and schedules, obtaining legal permits, installation process and development of product slotting configurations to maximize material handling and storage efficiency. Moreover, it is also important to thoroughly test all equipments used in distribution warehousing before actual operations begin.

Distribution Network Configuration—Decision about number of distribution centers and manufacturing plants and their locations is also important.

 Site Selection— Evaluation of existing structures and Greenfield locations as well as factors such as fix-up costs, support services and incentive packages have high bearing on site selection process

Systems Integration— Next step is integrating computerized and manual warehousing systems via system configuration and set up and conducting acceptance testing start-up and finically implementation.

Inventory Management— One of the most critical factor for distribution warehousing is analysis of inventory levels throughout the supply chain on continuous basis

Transportation System Planning—Transportation plays significant part in any supply chain. Hence, selection of best transportation configuration and suppliers so as to minimize costs is highly desirable.

Maintenance—For distribution warehousing, efficient management of maintenance operation can convert itself from cost center into a profit center. Improved product quality, better utilization of equipment operators, enhanced equipment effectiveness, maximization of throughput capacity and longer equipment life are some of the benefits due to robust maintenance practices in distribution warehousing.

With reference to business, outsource means to do something by process of hiring a third party for it instead of providing it yourself. Similarly outsource warehousing means to hire the services of order fulfillment warehouse instead of employing an in-house warehouse.

Outsourcing warehouse is very critical to business operations and its success. It is one of the most important sources of consumer satisfaction and is mostly stressed, as orders must be accurately fulfilled in complete from in the required time and finally yet importantly according to customer preferences. Whether to outsource warehouse services for your business or settle an in-house warehouse you need to consider the following points:

• Whether your business is equipped with the experience, expertise and resources required to run an in-house warehouse system.
• The experience you have to arrange an ideal and cost effective commercial real estate for an in-house warehouse.
• Considering any competitive advantage that your business can gain over its competitors by an outsource warehouse.
• Consider the effect of saved capital expenditure that would have been spent on the establishment of an in-house warehouse infrastructure.
• Does your business need any improvement in its current order fulfillment process and warehousing activities?
• Can your business benefit from the various distribution centers of the outsource warehouse provider for reliability and multiple times shipment.
• Does your business need a scalable and flexible customer service for product deliveries? Can your business afford to establish one?
• How your business can benefit from the up-to-date warehouse technologies of an outsource warehouse unit without any initial investment?
• Considering to provide value added services to your customers through the utilization of the services of kitting, labeling and customized packaging of an outsource warehouse provider.
• The advantage of the cost effective transportation service of the outsource warehouse as compared to an in-house transportation service.

This is not an exhaustive list of points to ponder upon; there can be other reasons for outsourcing a warehouse. All you need is to have a cost benefit analysis of all the available alternative ways of fulfilling your business needs and choose the one, which is more beneficial in less cost.