What is Warehouse?

Warehouse

Warehouse is a big commercial storage space or building where a company keeps a lot of things in an organized manner to optimize the supply chain. These things could be products, materials, equipment, or anything else they need for their business.

People use warehouses to store these items in an organized and safe manner until they require them. However, the warehouse has evolved beyond simply being a storage space. Nowadays, warehouses are more than that - they are dynamic hubs that ensure seamless operations and facilitate efficient distribution of products. Many industries and ecommerce businesses use warehousing services to store tangible merchandise or stock in a warehouse or designated storage space until they are ready for sale or distribution.

Warehouses are designed to safely and systematically store and safeguard goods, facilitating the tracking of items' whereabouts, arrival times, duration of storage, and current stock quantities with ease and precision.

How will be the market of Warehouse from 2023 to 2030?

Warehouse trends that are expected to emerge and become more prominent in the period from 2023 to 2030, along with some relevant statistics:

The global warehousing automation market is expected to grow at a CAGR of 14.5% from 2023 to 2030, reaching a value of USD 59.3 billion by 2030. This growth is being driven by a number of factors, including the need to improve efficiency and productivity, reduce costs, and improve safety.

Warehouses are increasingly being designed and operated with a focus on sustainability. This includes initiatives such as using renewable energy, reducing waste, and improving energy efficiency. According to a recent survey, 73% of warehouse operators are planning to invest in sustainability initiatives in the next year.

What are the different types of warehouse?

Warehouses come in various types, each designed to fulfill specific storage and distribution needs. Here are some common types of warehouses:

• Public Warehouses: 3PL-operated warehouses are available for rent by multiple businesses. They offer cost-effective storage and distribution solutions without necessitating dedicated facilities.
  
• Private Warehouses: Individual companies own and manage private warehouses exclusively for storing their goods. These warehouses provide complete control over inventory and operations but come with the responsibilities of ownership and maintenance.
  
• Distribution Centers: Distribution centers are strategically positioned facilities designed for the reception, sorting, and shipment of products to customers or retail locations. They play a pivotal role in supply chain logistics and ensuring prompt order fulfillment.
  
• Fulfillment centers: Fulfillment centers, often associated with e-commerce businesses, specialize in picking, packing, and rapidly shipping individual customer orders to achieve quick order turnaround times.
  
• Cold Storage Warehouses: These purpose-built warehouses store perishable items, such as frozen food, dairy products, and pharmaceuticals, at carefully controlled low temperatures to preserve product freshness.
  
• Bonded Warehouses: Bonded warehouses operate under the supervision of government customs authorities and serve as storage facilities for imported goods. Import duties are not imposed until the goods are removed from the warehousing for sale or distribution.
  
• Climate-Controlled Warehouses: These warehouses maintain specific temperature and humidity levels to safeguard sensitive items like electronics, art, or pharmaceuticals that require protection from environmental influences.
  
• High-Bay Warehouses: High-bay warehouses are characterized by towering racking systems and automated storage and retrieval systems (AS/RS). They optimize vertical space for high-density storage.
  
• Automated Warehouses: Automated warehouses make use of robotics and advanced technology for inventory management, order picking, and packing. They are engineered for high-speed, precision operations.
  
• Bulk Storage Warehouses: These warehouses are employed to stockpile large quantities of raw materials or products in bulk, frequently utilizing racks, bins, or stacking techniques.
  
• Hazmat (Hazardous Materials) Warehouses: Hazmat warehouses are outfitted to safely store hazardous materials in compliance with safety regulations.
  

Top 7 Benefits of Warehouse in 2023:

Reduced Transportation Costs: Warehouses act as central hubs for goods distribution. By consolidating products and shipping them in larger quantities to regional locations or directly to customers, transportation costs per unit decrease. This bulk shipping and distribution strategy results in significant savings in fuel, labor, and shipping expenses.

Storage Space: Warehouses provide ample storage space, often equipped with shelving and pallet racks, ensuring efficient utilization of available areas. This capacity allows businesses to purchase raw materials and products in bulk, taking advantage of economies of scale. It also offers a secure environment, protecting goods from theft, damage, and adverse environmental conditions.

Inventory Management: Warehouses play a pivotal role in inventory management. They employ inventory tracking systems that monitor stock levels, movement, and expiration dates. This real-time data helps businesses avoid overstocking, understocking, or wastage, ultimately leading to cost savings and improved order fulfillment.

Seasonal Demand: Warehouses serve as buffers for businesses dealing with seasonal demand fluctuations. During off-peak seasons, excess inventory can be stored, and when demand surges, these stockpiled goods can be distributed efficiently, ensuring products are available when customers need them.

Order Fulfillment: Warehouses are strategically positioned to minimize delivery times. When customers place orders, warehouses pick, pack, and ship products quickly. This rapid order fulfillment enhances customer satisfaction and supports the growth of e-commerce businesses by meeting customer expectations.

E-commerce Support: Warehouses are essential for e-commerce businesses, as they enable fast and reliable order fulfillment. With strategically located warehouses, online retailers can offer quicker shipping options, for rapid delivery.

Strategic Location: Warehouses are strategically positioned near transportation hubs, ports, or major customer markets. This location optimization reduces transportation costs, minimizes lead times, and ensures products reach their destinations quickly and efficiently.

How to build an Ideal warehouse? : Key Factors to consider

Logistics is the bridge that connects the manufacturer to the consumer . The share of warehousing is only 14–34% of total logistics cost but it is the backbone of the supply chain.

Warehouse standards in Unorganized warehousing sector:

The Indian warehousing industry is experiencing growth and development in Grade A warehouses. However, unorganized, fragmented players still dominate the industry. Many individuals see the warehousing demand as an investment opportunity and are investing in building warehouses in unorganized markets, particularly in Tier 2–3 cities.

Many new investors build substandard warehouses that become liabilities instead of assets. These warehouses may initially lease due to demand and supply, but they can become obsolete as better infrastructure emerges nearby over time

It's undeniable that a majority of unorganized players won't meet Grade A warehouse standards due to a lack of funds. However, if the following basic parameters are considered during warehousing construction, the likelihood of frequent leasing at better rates increases significantly, resulting in a high return on investment over the long term.

General Parameters

Locality:

• Location is a crucial element in deciding the value of a warehouse. The locality should be safe, secure and strategic depending on logistics requirements of that city. The location of the warehouse should be on a highway or have easy access to the same if logistics in your city mainly serves as a transit hub or link for supply to other cities. The transport will avoid unnecessary transit to cities & save time.
• Warehouses should be strategically located to serve the entire city for internal distribution.
• In both cases it is important to consider that locality has proper entry and exit points and is not congested by city traffic because it can be a big negative for your warehousing.
• For warehouses in manufacturing hubs, choose industrial zones with easy access to pollution certificates and licenses.

Commercial Land: The warehouse should be built on commercial land and not on agricultural or residential plots. The municipality records, property tax receipts and electricity bills should be in order. A formal economy and regulatory compliance boost your warehouse's leasing prospects and valuation over others in the area

Labour Availability: Indian warehousing operations are still labor intensive. They maintain a lean full-time workforce and rely mainly on on-demand labor due to operational dynamics. Always ensure that the warehouse is built in an area where there is easy availability of labor.

Connectivity: Proximity to city, public transport, hospitals, railway stations, and airports is crucial for clients when selecting a warehousing location. The daily workforce in warehouses (Supervisors, managers, pickers etc) should be able to easily commute to warehouses from residential areas. The location should be accessible to all courier companies, particularly for e-commerce logistics.

Parking:  The majority investor concentrates on the build-up area and considers open areas as a waste of opportunity. It is vital that 10–15% of the area is allocated for parking or vehicle movement, as warehousing and transport are interlinked. Additionally, the inclusion of warehouse space is essential for optimizing logistics and storage capabilities.

Vehicle Access: The logistics involves frequent movement of vehicles like Tata 407, Eicher, 20/40 Ft. containers to and from the warehouse. The warehouse should have easy access of 20/40 Ft container vehicles to the warehouse and space for angular movements. It could be the DECIDING factor for clients to lease the warehouse.

Few other important parameters can serve as catalysts for increasing the likelihood of leasing your warehouse:

Toilets: At least one toilet for smaller warehouses and separate toilets for staff and laborers in big warehouses. Rest room for labors, guard rooms, office rooms, communication rooms for bigger warehouses.

Technical Specifications:

Warehouse height: The optimization of warehousing space is a prime factor in profitability of warehousing operations. Warehouse height is vital for space optimization, with a recommended minimum of 30 ft for mid-size warehouses and 35–40 ft for larger ones.

Flooring & Racking: The base of the warehouse is floor and its strength determines the value of the warehouse. The strength of the flooring is an important aspect to install heavy duty racks or machines. It may not be an important deterrent in smaller warehouses as they don’t undergo racking but should be sufficient to withstand installation of basic machines for manufacturing. But bigger warehouses should go for Vacuum Dewatered Flooring (VDF) & 8 Metric Tonnage Load Balancing for 1 sq.mt. floor Area.

Docks: Docks serve for loading and unloading goods between vehicles and warehouses. Logistics companies lease 60% of warehouses in India, and they frequently move products to and from warehouses. The warehouse becomes unusable for logistics and they will not lease it if the warehouse does not have adequate docks . Based on analysis of leads received by us for leasing it is recommended to have a minimum of 2 docks per 5000 Sq.Ft. area of warehouse.

Warehouse Layout: The warehouse layout and design is an extensive subject and we will guide on this in a separate blog. We recommend always consulting warehousing consultants with extensive experience. The warehouse design layout should consider usage of every inch of space, proper flow, minimum pillars/obstructions, minimum time to move from one end to other.

Few other important technical aspects which are important deterrent for bigger warehouses

Skylight :

• Mostly for bigger warehouses. 3% of total roof area.
• Proper Ventilation for all sizes of warehouses.
• Roof Insulation for bigger warehouses.
• Dock levelers and canopy for bigger warehouses.

Why is it necessary to Optimize the Warehouse?

Decades back, you may have gone with the recommendation of your relative or neighbor. Today, when looking for a godown for rent, you have plenty of options. You don’t have to settle for a large empty place in the name of a warehouse. To counter the hyper-competitive market, you shouldn’t settle for anything less than the best. Business owners now need modern warehouses that are tech-driven; warehouses that add higher effectiveness to their supply chain. Because when you’re targeting people across a larger geographic location, and when your customers expect fast and seamless order fulfillment, you must step up your game or risk being left behind.

In line with this same requirement, the warehousing landscape has shifted significantly in recent times. Startups, in particular, need a godown for rent that not only meets their storage requirements but also enhances their order fulfillment capacity and efficiency through real-time time. Logistic solution providers aren’t just successfully filling this cap and meeting the new-age requirements but also, in many ways, shaping this entire industry. They help businesses discover the right warehouses across different locations and utilize – and pay for – just the space they need.

They offer a single, centralized dashboard to manage all the inventories in real-time; this enables businesses to make better and prompt decisions to improve their supply chain operations and achieve optimized efficiency in order fulfillment.

Warehousing has become modern and tech-driven. It is pacing to adapt to the newer needs, requirements, and expectations of the market. Consumers want quick delivery. Business owners want more cost-effectiveness in the supply chain. Modern warehouses can sufficiently meet these needs through technology. 

Important Factors to consider while selecting a storage place for rent:

Warehouse or godown leasing is a very strategic decision that controls your entire supply chain. This decision will affect the overall efficiency of the distribution process. Many factors will influence your decision. We have given a comprehensive list that needs to be considered before finalizing your warehouse or godown for rent.

• Location: This is very important to be near to your customer and logistically viable.
• Zone: You need to inquire about whether warehousing activity is permitted and whether products to be handled are safe to be handled in the said area.
• Type of property: This will depend upon the product you are going to handle and your height requirement. Normally with RCC, the maximum height you can get is 16 ft, and with the shed 24-50 ft depending upon the project.
• Property Title: Title of the property and whether it is authorized along with all necessary government approvals in place.
• Passage Adequacy: This is for the vehicles that will be ferrying around whether they will be able to play on the approach road.
• Dock: Number of docks or shutters and dock  height to ensure smooth operations during inbound and outbound of material from the warehouse. 
• Fire & Safety issues: This point needs to be evaluated from an insurance and safety point of view.
• Electricity: Power requirement along with service provider and load shedding history.
• Labor: Labor availability and labor union issues in the compound are major factors to be considered for smooth day-to-day operations.
• Transportation: No entry hours in the city for big vehicles. Transportation should be an independent affair. Sometimes the local union imposes conditions to ply only their vehicles thereby creating issues when the outside vehicle is used for the day-to-day affairs.
• Basic Rent of warehouse: This is the most critical factor in deciding your monthly cost. Deposit: This is normally calculated in terms of Monthly Rental x Nos. (Eg.  2 Months’ Rent). In North and Western parts of India, it’s usually between 2-3 Months of rent. However in the case of southern cities of India like Chennai, Bangalore it ranges between 6 Months to 9 Months of rent.
• Maintenance/Security: If the property is within a compound. This is an additional cost that needs to be paid along with basic rent and is generally 0.5 to 1 Rs/Sq ft. added to base rent
• Availability of forklift/hydra: In case you have the requirement of forklift or hydra. The same needs to be checked beforehand
• Brokerage and service fee: This needs to be agreed upon beforehand and paid after the conclusion of the deal. Try to engage with a reputed broking firm that can provide professional service and help you to make an informed decision. Godamwale can help you with your leasing and liasoning requirements professionally.

All these points are basic guidelines that need to be considered before leasing a warehouse. You need to further take reviews about the property owners' conduct and any issues that are faced by other existing tenants of the area.

How to find the right Warehouse for your business?

If your business extends its reach far beyond local boundaries and encompasses a broader geographical scope, your warehouse must align with this expansive footprint. To enhance your order fulfillment efficiency and capacity, settling for a large, generic storage space that might have sufficed a decade ago simply won't cut it in today's hyper-competitive market. In this fiercely competitive landscape, your warehousing requirements demand nothing less than a cutting-edge facility that seamlessly integrates with your supply chain needs and business objectives.

The quest for a suitable warehouse for lease has become a significantly more intricate endeavor, given the heightened stakes involved. Ill-equipped warehouses lacking essential amenities can impose severe constraints on your order fulfillment process, ultimately impeding your business's growth trajectory. Finding the perfect warehouse that harmonizes with your supply chain requisites and budget now requires a more substantial investment of time and effort.

Fortunately, Warehouse management system (WMS) streamlines this undertaking, offering a more accessible and user-friendly approach. With this platform, you can effortlessly pinpoint the optimal warehouse location anywhere in India, tailored precisely to meet your inventory storage and logistics needs. These cutting-edge facilities boast advanced technological integration, empowering businesses to achieve heightened efficiency and cost-effectiveness.

Discovering the right warehouse means obtaining precisely the inventory storage space you require—no more, no less. As your business expands and your warehousing demands evolve, you can seamlessly scale your warehouse accordingly. Another notable advantage of opting for logistic solutions is the ability to manage your inventory seamlessly across various locations, all from a single, centralized platform. With real-time inventory tracking, you can elevate your supply chain operations and make informed, data-driven business decisions.

Conclusion:

Warehouses are the backbone of modern supply chains and logistics, playing an important role in facilitating the efficient movement and management of goods. These versatile facilities provide secure storage, inventory management, and value-added services. They enable businesses to optimize their operations, reduce costs, and enhance customer satisfaction. 

Warehouses are not just storage spaces; they are hubs of activity where products are received, sorted, picked, packed, and shipped to their final destinations. Their strategic locations near transportation hubs, customer clusters, and manufacturing centers help reduce lead times and transportation costs, contributing to the overall competitiveness of businesses.

Godamwale provides warehouses for various types of goods, whether raw materials, finished products, or inventory. Their service allows businesses to free up space in their facilities and scale their storage needs as required. Their adaptability, efficiency, capacity and WMS technology to meet the ever-changing demands of the marketplace make them a cornerstone of modern commerce and industry.

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