Adaptability and flexibility are key to success in today's fast-paced and ever-changing business landscape. Very few businesses can afford to tie up resources in large, inflexible warehouses they may not need as the business realities change.
Enter flexible Warehousing – a dynamic approach to storage and distribution.
Traditional warehouses have fixed layouts and long-term lease commitments. Flexible warehousing solutions offer modifiable spaces with short-term leases for space requirements of even less than a week. Many flexible warehousing providers offer shared or collaborative spaces, allowing multiple businesses to share resources and reduce costs.
1. Adaptability and Scalability
Flexible warehouses offer elastic and extensible storage models that cater to the changing business needs in a highly uncertain business environment.
Businesses prefer flexible warehouses for adaptability and easy scalability. Flexible Warehousing offers businesses flexibility regarding space allocation, lease terms, and services.
These facilities have a modular setup. Businesses can take up or shed "modules" of space in double-quick time to match fluctuating demand.
For instance, a business may take one module for their routine operations and take up an additional module for a few weeks or months to meet seasonal rush or to process a bulky consignment.
Flexible Warehousing also allows businesses to take up temporary warehousing spaces in several locations, such as near transportation hubs, near a major customer, or close to the site of a seasonal sales outlet. The ability to take such temporary spaces improves supply chain efficiency.
Business resiliency improves as the business can leverage emerging opportunities or withstand shocks better. For instance, if any disruption prevents timely access to a warehouse, the business can quickly take up space elsewhere.
In contrast, traditional Warehousing with long-term leases in fixed locations limits the ability of the business to optimize supply chain efficiency.
Read More: Leasing or On-Demand Warehousing?
2. Cost optimization
Another big reason for the increasing popularity of flexible Warehousing is cost benefits.
Flexible Warehousing offers shared spaces with pay-as-you-go models and on-demand services. Shared warehousing spaces offer economies of scale as companies pool resources and share costs.
Businesses can also align warehousing expenses with demand. Businesses subscribing to flexible warehouses get space without making capital investments or long-term commitments. They can use space to match fluctuating needs without paying for unneeded excess space. They can convert their capital or fixed expenses into operational expenses and attribute the costs to specific goods or consignments.
Fixed costs reduce, and overall cost efficiency improves. All the business has to do is identify the needed space and strike a contract with the service provider.
In contrast, setting up a traditional warehouse requires a sizable upfront investment. The business will have to invest in setting up the infrastructure to receive and store goods. Even if the business leases ready-to-use space, traditional leases involve long-term commitment.
3. Meeting customer demands better
Traditional Warehousing, aligned for stability, struggles to meet evolving customer expectations. Flexible Warehousing offers e-commerce providers and others in the logistics space the infrastructure to support efficient fulfilment.
It becomes easier to fulfil customer expectations through quick order processing, product customization, and seamless integration with online platforms.
Providers can use flexible warehouses to set up a local-to-local distribution model, reducing the distance between pick-up points and delivery locations. These models improve the speed of pick-up and delivery, reduce transportation costs, and reduce greenhouse emissions.
One example is the ability of flexible warehouses to replenish physical brick-and-mortar stores rapidly as soon as stock becomes low. Suppliers can also onboard new points of sales easily by adding a mode to an existing warehouse network.
In a traditional fixed-lease warehouse, adding a new point of sales requires extensive rescheduling or adding extra delivery vans.
Most flexible warehousing solution providers co-opt automation and other advanced technologies.
Providers can integrate their warehouse management systems (WMS), inventory tracking, and real-time analytics into the techniques offered by flexible warehousing setups. Such integration increases visibility into operations. They can monitor inventory levels, optimize picking and packing processes, and make real-time data-driven decisions.
4. Easy access to value-added services
The flexible warehousing provider usually offers value-added services related to order fulfilment, packaging, labelling, returns management, inventory tracking, and assembly services.
The ready availability of these services reduces capital expenses and enables cost optimization for users. In fact, without a service provider offering such services, the business may not have a way to viable access such services.
5. Enabling Just-in-Time Inventory
Just-in-time inventory (JIT) is a time-honoured concept of efficiency and resource optimization. JIT involves receiving inventory as close as possible to the needed time to reduce storage and handling costs.
Flexible warehousing suits JIT. Businesses can mitigate significant, long-term storage commitments and take up smaller, flexible spaces to minimize carrying costs, improve inventory turnover, and become more responsive to customer needs.
Read More: Best practices for choosing an On-Demand warehouse service provider
Flexible Warehousing is having a transformative impact on logistics strategies. The availability of these facilities enables businesses to overhaul their business models and cater to customers in better ways.
Are you in search of On-demand warehouse providers in the UAE?
At Cargoz, we have collaborated with over 300 warehouses that can easily meet your flexible storage needs. You can focus on developing your business and acquiring customers while we handle the task of finding the ideal warehouse for you.
Get in touch with our team to know more.