Managed warehousing services provide a new level of inventory control and convenience for both manufacturers and entrepreneurs alike – but is it the right solution for you?
What is a Managed Warehouse Service?
A managed warehouse service allows companies to outsource their inventory storage and shipping requirements thereby streamlining the order fulfilment process. The process includes warehousing a company’s products, picking and packing, shipping and delivery to the end user.
With storage space in high demand, and hyperconnected urban fulfilment continuing to escalate, effectively managing a network of third-party warehouses becomes that much more challenging.
Ideally, better quality warehousing facilities should be in logistically efficient locations.
What are the Essential Managed Warehouse Processes?
Whether you’re new to warehousing or more familiar with traditional inventory management, warehouse processes are essentially the same. Core warehousing competencies include such elements as:
- Receiving inventory
- Warehousing and storage
- Order processing
- Returns processing
- Processing returns (reverse logistics)
- Picking and packing
- Assembling and kitting
- Tracking
- Cross-Docking
- Shipping
- Reporting
What do Managed Warehouse Services Include?
A well-oiled service requires partnerships with experienced 3PL providers who have access to or control warehouses managed by a team of experts who specialize in:
- Warehouse availability and locations
- Current rates and renewals
- Storage negotiations
- Warehousing insurance types and evaluations
- Contract administration and negotiation
- Material handling operations
- Transportation networks
- Food-grade safety and compliance
Who Should Use Managed Warehousing?
If you’re a relatively small business selling products online, a managed warehouse service is an ideal solution for eCommerce fulfillment.
For instance, you may have limited space to store products, or you may sell products from different physical locations that need to wind up in one order.
Or you may be a medium sized business that’s growing to the point where you must off-load your warehousing processes because you lack the expertise and storage space.
Using a 3rd party warehousing systems allows you to boost profitability by having all your products deliverable from a single warehousing source or network. This expedites the delivery process which in turn creates happy customers.
Order Fulfillment in a Nutshell
Regardless of the size of your business, order fulfillment encompasses all the steps required to send out your orders.
When your customer finishes the payment phase, your 3PL gets an electronic copy of the purchase order which triggers the pick and pack process.
The last step in order fulfillment is transferring the parcel to a carrier for the last mile of delivery to your customer.
Types of Fulfillment Warehouse Services
Fulfillment warehouses can specialize a wide range of individual services. But most provide the essential fulfillment services such as storage, picking, packing, shipping and tracking.
At Brimich, we also offer additional services such as
- Cross Docking
- Co-packing & Assembly
- Rework/ Sorting
- Reverse Logistics
- Quality Checks
- Container De-stuffing
- Shrink Wrapping
- Custom Packing
- Labelling (UPC & Barcode printing)
- E-Commerce Drop Shipping Services
- Providing EDI to Customers (Standard & Customized solutions)
- A broad range of detailed management reports
Knowing what warehouse services are available to you helps add value and profitability to your business. Additionally, an experienced 3PL partner can help you develop a strategy that allows your company to move products intelligently.
The Importance of Warehouse Locations
Strategically significant warehouse locations are the backbone of efficient logistics. A quick drive around the perimeter of virtually any growing community of significant size will undoubtedly have numerous warehousing locations in all phases of development – from established to newly broken ground.
In traditionally dense areas such as the greater Toronto area, every opportunity is taken to maximize the value of real estate when geared towards warehousing – especially when located close to major city centres and transportation arteries.
As older buildings are removed at the end of their life-cycle, newer modernized facilities spring up filling the void in short order.
Even though E-commerce companies can market to consumers anywhere around the world, the three most important factors in warehousing are still “location, location, location”.
The Future of the Fulfilment and Warehousing Market
Driven by consumer demand and emerging economies, the size of the fulfilment market, and by extension the increased need for warehousing services, shows no sign of stopping anytime soon.
The global e-commerce fulfillment services market size was estimated at USD 86,449.97 million in 2021 and is expected to reach USD 96,257.94 million in 2022.
source: https://www.grandviewresearch.com/industry-analysis/ecommerce-fulfillment-service-market
E-commerce Fulfillment Services Market Size
According to this same report, a projected growth rate of 9.5% is expected from 2022 to 2030.
With Complexity Comes Vulnerability
The convenience that a managed warehouse service offers is the result of redefining the logistics system in general. Over time, more layers of complexity are added as the supply chain adapts to the changing landscape.
On the downside, shortages and delays have far more impact on a system that relies on all the parts moving as they should. In other words, even a small wrench thrown into this machinery can bring things to a grinding halt.
But the same could be said for virtually any arm of today’s supply chain as was evidenced by the world wide shortages experienced in early 2022.
Final Thoughts
Managed warehouse services provide by a 3PL partner can help take your eCommerce business to the next level. You benefit from having an experienced warehouse staff without the hassle of hiring workers yourself.
Moreover, strategically located warehouse facilities can reduce delivery times. You also may be pleasantly surprised at the affordability fulfillment services, especially when you factor in the savings from diminished errors and returns.
If you have a business that needs assistance with fulfilment, warehousing, or logistics in general talk to us at Brimich. We’re always ready to help you grow.