Warehouses are crucial for all businesses that have to deal with products and logistics. Issues start arising when the warehouse becomes a source of friction, leading to a potential loss of business and revenue. This friction can make it harder to keep up with both supply and demand, and this can present an opportunity to extend your warehouse. Although every business is different, and will observe different signs for when it is time to expand, the signs and framework should be similar for different types of businesses.
Your Business is Missing Targets and Goals
If everything is running as expected, your business should be able to hit all its supply and demand goals and targets. However, once you start squeezing everything you can out of the square footage you have, things might start doing wrong. You may find yourself missing deadlines that you could have met easily in the past.
If you watch your key performance indicators, you might notice that things are lagging, and the signs of a congested warehouse will usually show here first before they show up anywhere else.
You Have Different Needs
You might have used the warehouse in the past as storage space for products coming in and going out. However, your business might have changed such that the inventory is now being moved via cross-docking. It is time to start thinking about expansion.
In some instances, it is possible to redesign and restructure the warehouse such that it ensures continuing operations without expansion. However, the cost-effectiveness of doing this will become less feasible as time goes on, and expansion will likely be the more cost-effective option in the long term.
The issue of cross-docking is an interesting one because any blockage at the main door will lead to delays in loading and unloading, and you can only add so many more doors to the warehouse without extending it.
Your Warehouse Has Become Disorganized
A disorganized warehouse produces so much friction that it has to be sorted out as soon as possible. If your warehouse is in such a state that workers are cramming items into smaller and tighter spaces, your business will be affected. Before expanding, though, it is important to remove old inventory that can no longer go to the market and have a plan on how best to use the space.
The disposal of old inventory produces new challenges that can be solved by renting a dumpster. By working with companies that provide dumpster rental services, you only have to think about the removal of the items and not their disposal. For dumpster rental Toronto, you can work with businesses like Waste Connections Canada, which provide dumpsters of different types and sizes for commercial waste disposal. Their dumpster rental services extend to all industries and types of businesses to help you do your part in ensuring proper waste disposal.
Shipping Costs Are Increasing
There are two main shipping costs businesses have to think about: shipping costs for the business and shipping costs for customers. For the business, the shipping cost is affected by how much they can order and how many times they order products. A smaller warehouse means you must order fewer items at a much more frequent pace.
If your business is growing and you are shipping more products to customers, you will be forced to order shipments of products numerous times. This increases shipping costs for you and lowers profits. If this is the case, you need a bigger warehouse. Expanding your warehouse means you can order in bulk from suppliers and still be able to ship the same volume to customers.
Your Tech Stack is Getting Outdated
Technology has changed a lot in the past few years, and we are now seeing the use of forecasting software automation in warehouses and optimized workflows that allow businesses to find and ship products faster. All of this technology is meant to help businesses increase their capacity for handling more inventory, which can be difficult if there is limited space to maneuver.
Suggestions from new software may indicate that you need to reorganize your warehouse to get the most out of it. The issue here is that reorganizing requires additional space, which makes a strong case for expansion.
Safety Issues Keep Coming Up
A crowded warehouse can be dangerous. Congestion means there are more people, inventory, and equipment in the warehouse, and it increases the probability of mishaps and accidents. If you notice this, it is time to give your employees, inventory, and equipment the space they all need by expanding. Open spaces are much safer, and you should see a decline in accidents and other safety issues.
If you notice any of the issues discussed above, your warehouse may no longer be adequate for your needs and use. Do not wait to expand as that will mean you live with these issues for longer, and they will only get worse as you go.