Building A New Warehouse

Retail managers often consider whether it makes sense to seek outside assistance in areas of sales management, technology, warehousing and logistics. If you are thinking about consulting services, you should first consider the following points.

• Carefully describe the problems you want to solve. What opportunities are you looking to take advantage of?
  
• Why can't these problems be solved using talent from within your organization?
  
• What kind of expertise is really needed to solve these problems?
  
• What procedures will you use in managing study of the problem?
  
• How can you be confident that you will get the maximum value for your investment in consulting?

Failure to adequately communicate can lead to disappointing results. You should not use a consultant as a status symbol or to develop ammunition for an internal political battle. To meet expectations, the client and consultant must have a clear understanding of the issues to be reviewed before the study begins. Here is an example of a well thought out project summary: "Renovation of an existing building in historic district to include 45,000 square foot furniture and accessories showroom and attached 15,000 square foot warehouse. Design must consider external appearance within historic district and limited truck access. Determine layouts for receiving, warehousing, staging, prep, shipping and warehouse office. Maximize space utilization in design. Specify new and used options for material handling equipment and racks, including cost estimates."

The team for this project consisted of the owner, the warehouse manager, a local architect with retailing and historic renovation expertise and the warehouse consultant. Pooling the collective knowledge resolved all the principle issues within days and technical details within a few weeks. By using the team approach, owners and managers come out of the process with new perspectives and knowledge that will be of long term value. Facilities planned in this way are productive from day one.

Planning ahead and doing the job right the first time is always less expensive than re-doing it later. Some mistakes are very costly, if not economically impossible to correct. The earlier the consultant is involved, the higher the potential benefit.

Your consultant should have recent related experience and preferably should not be tied to a single supplier. The buyer of management advice has a right to expect that the advice given is both objective and independent.

There are multiple sources for everything needed in your warehouse. For example, there are used order pickers coming off full service 48 month leases at major retailers, completely renovated order pickers and new order pickers. Relatively speaking, used are one third the price of new, and renovated are two-thirds of new cost. Quality used racks are available at 40% savings. Your type of operation and financial position may drive the decision one way or another.

Plan for possible future uses as the facility may become inadequate long before the structure is actually worn out. Good examples are the warehouse showrooms hyped by Levitz decades ago. Even when the design and function are still good, changing volumes or markets may make the location less effective than it was previously.

If expansion is remotely possible on the same site, consider long range uses of the entire property. With a plan, you can build to present needs but expand economically as the business grows.

Bottom line, consultants can be very helpful, particularly when your core competency is retailing furniture, you have limited time to focus on the critical building issues and you may be so close to a situation that you are no longer able to analyze it clearly. A consultant with a proven track record who has "been there - done that" can help deliver the project on time and on budget.

Daniel Bolger of The Bolger Group helps companies achieve improved transportation, warehousing and logistics. Questions can be directed to Mr. Bolger care of FURNITURE WORLD at dbolger@furninfo.com.