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.

Why Is It Called a Milk Run?

Don’t let the old-school name put you off. The milk run method might solve your delivery and efficiency woes. The Milk run got its moniker from the milk industry practice wherein a single tanker goes to different dairy producers every day to collect milk and then deliver it to the milk processing firm.

This ensures that there’s a regular supply of fresh milk and that overstocking is prevented. It also ensures just-in-time delivery and reduces the possibility of waste and material damage.

How Does It Apply to Material Handling?

Using the Milk Run method has become quite common for many lean manufacturing facilities. Remember that the lean concept focuses on optimizing every aspect of production including material handling and transportation.

The Milk Run method simply allows more frequent deliveries of materials and supplies to more than one area that needs to be re-stocked. Often this helps reduce the levels of overstocking or having to manual call for more materials.

It also keeps production processes flowing across a shop floor which drastically reduces downtime. This is why it is regularly applied to optimize a supply chain.

Deliveries are most commonly made to areas that are in constant need of being re-supplied. These delivery routes are normally timed out during the shift to operating at peak efficiency, to ensure that the assemblers can continuously assemble according to production schedules.

The operator will pick up their materials at a central warehouse or “supermarket” and then follow the route delivering or dropping off the material to the assemblers at different points.

What is milk run system?

These deliveries are most effective and efficient when completed by a system.

In a larger set-up, there will be more material handlers back at the storage area preparing the next milk run route so the driver can easily begin his next delivery route. Whereas in smaller operations this is completed by the same material handler/driver.

Thus, the method used in preparing the next delivery route usually depends on the size and practices in a factory or warehouse.

Generally, the steps within a milk-run route can be reduced down to:

• Loading
• Handling of Materials at the drop stations
• Traveling

The biggest challenge when initially setting up Milk Run routes is the design and creation of the routes and the timing of the intervals. This is because it’s the determining efficiency factor when establishing the method.

Lot of testing, experimenting and time goes into the process before you get it right. The area of the route and the distance from the storage area to the different delivery points all play a big role in the effectiveness and efficiency of such a route.

Also, the amount of demand your delivery points would generate and how often they would need to be re-supplied. This can be difficult to manage and implement because many times a production schedule is unknown and can be fluid. So, the final Milk Run plan must consider these factors and the effect of real-time occurrences.

The aim is efficiency

It might take years of practice and modification until a milk run is operating at peak efficiency. Brimich Logistics is more than happy to work alongside organizations, increase their success, and implement milk run routes into their material handling practice.