When evaluating internal storage and warehousing capabilities, businesses commonly face the choice of building or expanding their own warehouse or to begin outsourcing to external warehousing providers. This discussion will delve into the benefits of opting for an external provider, emphasising how they can reduce costs, enhance scalability, and streamline the distribution process.
Expertise and Technology
External providers will often possess specialised knowledge and technology for efficient inventory and goods management. The use of specialist warehousing software can improve inventory tracking and order fulfilment, boosting overall warehouse efficiency, while reducing lead times. As a client you can leverage these technologies without the upfront costs required for implementing such systems.
Scalability
External warehousing providers offer the flexibility to quickly scale storage capacity based upon demand. This adaptability allows businesses to respond to seasonal variations, market fluctuations and overall growth. Using an external provider can help avoid businesses avoid maintaining their own underutilised warehousing space. Additionally, it also eliminates the need to expand your own workforce to meet demand, enabling you to remain agile and responsive without incurring the costs.
Cost Optimisation
A significant advantage to utilising an external provider is the avoidance of costs associated with the construction or expansion of a warehouse. Building costs are estimated by Checkatrade to be on average £84 per square foot of warehousing space, this excludes the cost of equipment, recruitment, training, maintenance, and warehouse software expenses.
Therefore, external providers can offer a cost-efficient alternative, with storage costs spread across the duration of use, in comparison to a one-time fixed expense. Overheads such as, maintenance, labour, training, software, and equipment are the provider’s responsibility, alleviating the customer of these concerns.
Location
A warehouse’s location can significantly impact the supply chain, associated delivery costs and lead time. Therefore, partnering with a provider in close proximity to your customers can be beneficial.
For the above mentioned reasons, the East Midlands saw the largest increase in warehousing stock from 2015 to 2021 largely due to its centrality within the United Kingdom. This centrality has led to the term “The Golden Triangle” which covers an area between Bedford, Kidderminster and Nottingham. From this area 90% of the United Kingdoms population is accessible via road within 4 hours. This allows for quicker lead times, reduced emissions, and increased customer satisfaction.
Why choose The Silver X Group?
At The Silver X Group, we take pride in offering a cost-efficient and reliable alternative to building your own warehousing space. With over 12,000 racked warehousing spaces and 130,000 square feet of warehousing space, we provide flexible payment options, allowing you to pay per pallet or opt for a service level agreement (SLA). Our services include contract packing, quality control, returns management and stock refurbishments, ensuring all your warehousing needs are met in one convenient location. Located in Alfreton, Derbyshire with sites in Sutton-in-Ashfield, Nottinghamshire, we’re strategically positioned at the northern end of the ‘Golden Triangle’, offering quick access to the M1 and nationwide delivery options, including dedicated same-day, multi-drop, and pallet network services.
Conclusion
To conclude, external warehousing providers emerge as strategic allies in optimising logistics operations. From advanced technology to cost-efficient scalability, the benefits can be substantial. Consider the advantages outlined in this article to propel your business towards streamlined and efficient warehousing operations.
If you’re interested in discussing if an external warehousing provider is right for you, contact us today on:
Phone: 01158 800 025
Email: [email protected]
Or get a quote now above!
