May 2015 | Sponsored | Thought Leaders

Improving the Warehouse Startup Process

Tags: 3PL, Logistics I.T., Warehousing, Supply Chain Management, Logistics

Joe Johnson is Director of Information Technology, Wagner Logistics, 800-817-1264

Q: What trends are you seeing with customers and their warehousing needs?

A: We are seeing a larger number of existing and prospective customers looking for space in short time frames. They might be looking to outsource their warehousing at the end of an existing lease or they may have short-term warehousing needs. Customers do not want to sacrifice visibility, even for a short time frame, to their inventories while transitioning to a new warehouse. They do not want to incur higher costs of labor to track the inventory during the transition period or have a manual process while their product is in a short-term warehouse space.

Q: What are the challenges, costs, and time involved in traditional warehouse start-ups?

A: Warehouses can traditionally take anywhere from 30 days to 60 days to get started from a radio frequency (RF) technology perspective. Challenges include: installation of wiring, access points, switches and dedicated data lines. Dedicated data connectivity often takes the longest period of time (minimum of 15-20 days) depending on the location and age of the warehouse even when using expedited solutions. The cost of expediting can vary greatly depending on the providers used and the amount of effort needed to install the circuit; especially with a new warehouse facility the provider has not previously serviced. Product often needs to be moved to the new warehouse, prior to establishing all the technology connections, leading to manual efforts by the warehouse personnel to track the inbound and outbound inventory. The cost can add up quickly for a customer with the additional labor hours needed to track inventory and expedited technology solutions. Additionally, there tends to be a substantial sunken cost for the wiring that is often left behind for a temporary warehouse solution.

Q: What alternatives are available to improve the warehouse start-up process?

A: Recent improvements in wireless cellular technology and mesh networks are being used in a variety of industries such as hospitals and remote construction facilities. These improvements now provide us with solutions that can be adapted for warehousing space. Wagner has recently deployed an "IT-in-a-Box" solution in multiple locations, which allows for a virtually wireless/mesh solution that can have a warehouse fully up and running in 7-14 days. This solution provides customers with immediate tracking of inbound and outbound inventory using full RF technology and Warehouse Management Systems. In addition to the rapid start-up, the entire solution can be quickly removed and reused for sites needing the space for only short periods of time during peak seasons. We typically see a savings of 20-30 percent based on the decreased amount of labor needed at time of start-up and the reduction in expediting costs.