Allan Frydman, Principal Consultant – Supply Chain at JLL tells MHD readers what signs to look out for when trying to understand if a warehouse is full and how organisations can react, adapt and re-engineer before having to relocate.
According to Allan Frydman, Principal Consultant at JLL there are many symptoms that point to a warehouse being full. “If you are starting to see overtime going up, your warehouse getting messy. If product is left on the floor in the receiving area, or you’re struggling to put orders away or get them out on time, then a lot of these signs can mean that your warehouse is full,” he says.
Generally speaking, if there is a huge decline in productivity, then this is a sign that something is up, Allan says. “Another sign is that you might see an increase in safety incidents. Typically, when a warehouse is at capacity, housekeeping also goes down and accidents go up,” he says.
While many organisations look at these symptoms and make the conclusion that they need to relocate their supply chain operation, this isn’t always the case. “The trick is to look at your symptoms and try and understand what is causing the issues. When you understand what is causing them, you can make judgements on whether your warehouse is full or not,” Allan says.
Finding out that a warehouse is full can be problematic for a business, particularly when they have signed a 10-year lease. “Sometimes people don’t do anything about their warehouse being full because they are three years into a 10-year lease,” Allan says.
This is where expert supply chain consultancy comes into the picture. “A lot of our clients are asking us how they can sweat their asset. They want to know what they can do smarter to help increase the lifespan of the existing asset they have already invested into,” Allan says.
Being able to understand what is driving the inefficiencies in the warehouse provides an opportunity to re-engineer the existing space to improve efficiency and productivity, without the need for an expensive relocation.
“We call this the highest value solution. It’s low capital cost, but drives a better outcome for the client,” Allan says.
JLL works with its clients in the industrial property space to get to the bottom of the issue and implement a strategy that will rectify the inefficiencies in the most cost-effective way possible.
“We look at the process flow and understand where the inefficiencies are occurring, and most importantly why they are occurring,” Allan says.
The benefits of having expertise in both property and supply chain disciplines allows JLL to deal with the issue in innovative ways. “Whilst we determine how a client’s facility should run from a supply chain perspective, we are also optimising their property portfolio, so we are developing strategies that ensure that our customers aren’t burdened with a three-year lease tail,” Allan says.
Over the last five years, supply chain has seen a significant amount of disruption and Allan says that it is very common to find that a warehouse operation does not keep up with the rate of change within the overall business.
“Very few warehouses incorporate the people and processes who can drive change. We find that when the facility is struggling to process the operational volumes required, their business has changed, their customers have changed and nothing inside the warehouse has changed,” he says.
This is a prime example of the importance of re-engineering. “We re-evaluate what the customers require from the business, and from here we assess how well the warehouse’s operational processes are working and put together recommendations on new processes, infrastructure and solutions.”
When engaging external expertise, new innovative ideas come to the table. “Without the pressure of the day to day operations, we can come in and create a solution that doesn’t require our customers moving to a new property at a huge cost, but by developing the right supply chain solution for them within their existing infrastructure,” Allan says.
As the supply chain team at JLL work across a number of different projects, they can bring innovative ideas to the project that those inhouse may not have considered. “We know 100’s of different ways to run a warehouse and how to apply them across a number of different industries. We bring the knowledge that our clients have of their specific industry and business and bring our knowledge of warehousing and property to develop the optimum solution. If you take one piece out of that puzzle, you will not have an optimised solution,” Allan concludes.