What is on- demand warehousing?
On-demand warehousing has not only become a trend in recent years but a necessity for many companies. In the pre-internet era, most supply chain networks were built for products to be sold from retail stores in a centralized market.
However, with increasing numbers of customers ordering directly to their homes, this outdated way of doing things is flagging under the pressure and alternatives are coming to the fore. One of the biggest is the rise of on-demand warehousing, which enables brands, companies, home-sellers and retailers to benefit from scalable, flexible warehousing solutions.
The New Warehousing Model.
What this new model relies upon is the ability to expand and contract requirements quickly and easily, so when budgets are tight companies can respond accordingly and not run themselves out of business by over-committing to unnecessary warehousing. Not only that, it more cost-effectively supports alignment with customers needs, i.e. when they speed up and slow down at different times of the year.
There are a few key reasons why this type of warehousing suits many businesses, such as flexible storage capacity, as well as managing seasonal peaks or for any unplanned surplus of stock without long term agreements needed. It’s also valuable for the new retail distribution channels, where on-demand warehousing creates a reduction in inventory storage costs, as well as moving the stock closer to the retail centres. Allowing them to provide a quicker, more efficient service to in-person customers.
This same benefit applies to e-commerce, where on-demand warehousing reduces delivery times and allows for shorter-term products. And best yet, it allows for more dynamic market testing with less of the huge financial stakes
“Industries that often benefit from on-demand warehousing range from hospitality industry to fast moving consumer goods (FMCG) and industrial manufacturing. In addition to large corporations that seek to innovate with their supply chains there are also many use cases for smaller companies. A big and still growing area is retail and e-commerce fulfilment.” – Dale Sharpe, Head of Business Development
The Power of the Short-term Lease.
The four key influencing factors, the lack of warehouse space; the rise in ecommerce demand; the need for speed and the desire for flexibility, have been held back by the traditions of the warehouse lease market. In the past, these were roughly calculated on future sales forecasts, alongside product creation, which always had a margin error.
This is fine to accommodate for a year period, but over any length of time, these margins extrapolate until originally leased warehousing space is either entirely too big or too small and the company has no way to get out of the lease itself.
This is one of the major reasons for the birth of on-demand warehousing, as well as the growth in storage capacity of logistics companies such as flexe logistics network, Stowga and Waredock, who provide access to companies offering on-demand storage at more competitive rates and lease lengths. It’s much harder to over-price when you can see a competitor is offering the same thing for less
The Power of the Short-term Lease.
1). Online access, with the ability to scale quickly
2). Create standarised and streamlined processes
3). Enforce structure within short-term arrangements, which are flexible.
Although the integration of on-demand warehousing into the supply chain market has created many opportunities for businesses, it also has been interpreted incorrectly by some.
On-demand housing is not like booking a room on a hotel comparison website, it still involves a tender process and is more like the traditional relationship-building processes in the B2B market. It is also not in real-time, the ‘on-demand’ refers to whenever required. And, most key, it’s about the services, not just storage space
Bray Solutions is able to offer a variety of solutions to meet on-demand warehousing needs, so please do get in touch to discuss your requirements.
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