Warehouse location Meaning

Deciding the location for a particular warehouse is a major task that is directly
proportional to the success of the organization. Warehouse location means the
location that is most suited for the company that will add up to their benefit. This
location is carefully chosen by taking all the required criteria into context.

This is a complex process and any silly mistake while choosing the location can lead
to the failure of the business. Certain factors are to be kept in mind while making the
monumental “warehouse location decisions”.The most suitable location are those
that maintain an integral balance between its convenience and a price rate that is
reasonable.

Factors to consider while choosing a location for the warehouse

There are many factors affecting warehouse location but there are certain critical
pointers that one should always consider:
Structure and layout of the building

The optimal way to structure, the building is to design it according to the activities
that will be taking place inside the organization. You should always keep in mind that
an old building could not sustain the flow of raw materials. Whereas a newer
building can maintain a smooth flow in carrying materials.

Certain factors affect or restrict certain equipment accommodations. The factors are
most likely related to ceiling heights or column spacing, etc. This can also harm the
inward and outward flows of raw material and finish products.

Therefore, it is highly advisable that before considering a particular building as your

warehouse, you need to consider all these factors and then decide whether the
layout and spacing of the building are completely suited for your organization’s
requirements.

Availability of trained workers

Getting a building at a certain remote location will obviously come at an effective

price rate but at the same finding trained workers in such a place will not only be
difficult but also very challenging. On the other hand, if you think of shifting your
whole bunch workforce to a remote location it will cost a lot of money. Either way, it
will lead to an unsustainable failure of the organization. Therefore, it is advisable to
purchase your warehouse in a certain area that can provide you with an adequate
workforce with various skills. This will help you hire workers for all kinds of activities
related to your organization.

The areas that have a high density of residential apartments along with adequate
availability of workforce will be an ideal choice for the warehouse location of your
organization. However, if you think of setting up your warehouse in an area with an
annual supply of labour, you need to keep in mind that this seasonal personnel
should not hamper the businesses’ needs. Any non-seasonal workforce
requirements can cost you much more than seasonal affairs.

Customer base and zoning

While considering this factor you need to determine the intensity of the operations
that are going to be conducted in the organization and what future it holds. If your
organization requires light assembly, then you can ahead with choosing a location
with much lesser intensive use. However, some other factor that can also affect the
zoning is noise levels, emissions, and outdoor storage availability. These elements
also target the districts that you will consider for conducting future operations.

Moreover, if you target a bunch of audiences that lies in a certain area, you can
easily set up your warehouse in that location. This helps you to serve your customers
with ease and at a much faster rate. This will not only gain your customer’s loyalty
but also will help you get more potential customers. You can understand your
customers better. As a result, this will make your business understandable, credible,
and attractive to customers that were unfamiliar with your products and services.

Read more about: Different shipping zones

Accessibility to major linkages

What means of transport is best suited for your organizational activities? After
identifying the most suited means of transport for your company, you need to
choose the location of your warehouse accordingly. You need to cross-check
whether the location has easy access to your preferred means of transport.
Transportations means are very important when it comes to business organizations.

Any default, in this case, can lead to huge business losses and delays in delivery,
which also leads to customer dissatisfaction. Other than transport, you should also
consider another factor that is accessibility to your targeted customers. Customers
are the reason why everyone does business. Without customers, there is no meaning
to a business. Therefore, while choosing a location, you should also keep in mind
that you are easily accessible to the customers.

For example, if the majority of your products are exported through overseas means
and the remaining lot is delivered via land, then you must have access to
comfortable highway and railway means of transport. You should always remember
that almost 20 per cent of your finances come from transportation. Moreover,
factors like incremented driver’s wages and an increase in gas prices can nudge your
decisions in choosing rail transport instead of doing shipments through trucks. If the
goods are less decomposable and the shipments are not that complex, then opting
for railways can be an ideal choice. It can save money and effort considerably.

Material handling capacities

Another Selection criteria for warehouse location that you need to consider is the
material handling capacity of the location is the availability of staging capacities and
handling equipment. For instance, if a truck is a primary model, then you need to
make sure that you have the depressing docks. You need to identify whether there is
a need for internal docks. The highly intensive distribution will certainly require
cross-docks. You need to determine whether the building has enough storage
facilities. This will help you identify the material handling capacity of your
warehouse.

The size of your warehouse

The size of the warehouse is a definite criterion that you will have to consider no
matter what. The whole inventory stock and the flow of the raw materials depends
upon this. With these, you can determine what and how much your inventory you
can accommodate in the building. This is also linked with the material handling
capacity. The material handling capacity to some extent depends upon the size of
the warehouse. Your warehouse should be capable enough to accommodate the
required equipment and inventories according to your business needs. For every
startup business or company, it is very essential to determine whether there is
enough space for further expansion in the future. This will save you all the time and
money when your business at a high peak of success. You do not have to worry
about the space then if you already have enough room, to begin with.

Rules and regulations

Before you go on buying the warehouse, you should be aware of all the rules and
regulations along with the legal aspects prevalent in that particular area. Many areas
do not allow the storage of certain items. It is always recommended to avoid the
goods that are not allowed to avoid any future problems. You should abide by the
rules and regulations of the area if you want to conduct a hassle-free and successful
business in that particular area.

Taxes and rent rates

The cost has to be a critical criterion when it comes to selecting an accurate location
for the warehouse of the organization. There is a certain hidden cost that negatively
influences the cheap lease rates and therefore the factors relating to cost should
always be considered in any aspect of the business. In the United States, the rental
rates are measured by square feet per month or year based upon the property
owner’s requirements. In the United States, the average cost of the land ranges from
the low price of $2.56 SF per year to a higher price that leads up to $ 16.50 SF per
year. Along with the rates, governmental taxes should also be considered
equivalently. Factors like tax incentives, governmental regulations, and tax
structures should be considered. Your business can also be benefited from the
special programs held by the government to promote your industrial segments.

Market and environmental factors of the locality

Proximity to market, producers, and suppliers that are being served along with
environmental factors of the area should be considered. Any new warehouse that is
set up should be close to important customers, suppliers, and producers. This will
decrease the transportation costs, reduce the lead times considerably, enhance
responsiveness, etc. the main factor is to determine who are the important supply
chain personnel and to make the particular supply chain efficient for Warehouse
location planning.

Along with these factors, environmental factors such as climatic changes, risks of
possible natural disasters, seasonal fluctuations, weather conditions, etc. should be
considered. Natural disasters like earthquakes, floods, landslides, etc. can affect the
business at an imminent rate and can lead to huge scale losses that might not be
possible to recover. You need to consider these factors before setting up your
business. Any default to such can lead to hazardous circumstances. Other
environmental factors are not so fatal but have to be considered. Factors like good
terms with the neighbors (as warehouses can be very noisy it can lead to disputes
with the neighbors), traffic congestion, busiest hours of traffic, etc. Consider all these
variables and check how this can affect regular business activities.

Concluding say

When you are up for doing business in a certain area, you should keep in mind that
you should respect the area’s values and norms. You should see that your business
activities should not hamper the livelihood of the regular people living in that area.
You should also focus on the environmental factors of that area that can affect your
business while choosing a warehouse location. Certain business activities can lead to
huge scale pollution in the area that can be harmful to the people staying in the
area. You should keep in mind the environmental factors before getting started with
the manufacturing processes.