Does size matter when choosing warehouse space?

by Jason Zanatta

Customers rarely (if ever) walk into a warehouse, but a manufacturer’s ‘storage’ needs careful thought and consideration. The right amount of space can positively affect the customer experience as well as the bottom line. Where and how product is stored is an important decision for manufacturers and must be tied into the overall business model.

Locating space

Where will the warehouse be? Many Vancouver-based business owners are considering options in rural areas because of increased construction costs related to building custom storage spaces. The Lower Mainland continues to offer newer and larger options for commercial construction. Collier Canada’s Vancouver Q1 market report provides great insight for activity, cost, vacancy rates and rental rates within the metro Vancouver area. For example, North Vancouver remains at the top of the list for lease rates while it is projected that vacancy rates will decrease in the Richmond/Delta area within the next year; in Boundary Bay, an 879,000 square foot potential development has the opportunity to provide much-needed large-bay options for tenants.

Apart from the stock that fills the warehouse and the customers who purchase it, employees make a huge impact on success. Will they be satisfied with the location and commute? No one loves spending half their day bumper to bumper! Who do you want to hire and is there a prospective employee pool living near your projected location?

Not only are employees and construction costs affected by location, but transportation to and from the warehouse becomes a significant factor. Locating the warehouse in an accessible location for efficient transportation can cut down on costs to receive and deliver the goods. If green initiatives are at the forefront of your business agenda (as it is in ours), then more affordable warehouse space further away from the customers and wholesalers who purchase the product may not necessarily be the better option.

  • Once the location has been narrowed down, evaluating the physical space is the next step. These are some critical questions:
  • Do you stock all your products locally?
  • Do you need to hold a lot of product or just a little and for how long?
  • What are your goals for potential growth and can the space adapt?
  • How does your turnaround time affect your stocking and inventory strategy?
  • Have you considered space for machinery and equipment?

Monitoring trends in supply chain and realty markets

If you’re just starting out (or you’ve been around the block) advice is key. Experts on supply chain and logistics management can assist in everything going smoothly and maximizing potential. Listening to market trends and doing a little digging can also be beneficial. The B.C. Liquor Distribution Branch’s recently sent out a RFP for consultants to facilitate a move to a new, modern location. Companies such as the LDB, because they are public, are heavily scrutinized and their experiences can be valuable tools.

Recently, Vancouver’s Arts Factory, which offers large communal production spaces for artists, relocated to an 21,000-square foot studio. Of note is that the new space is supported and financially backed by the city for the development of arts and culture. A perfect fit for the Arts Factory. For advice on Lower Mainland business centre plans, local commercial real estate agents are a great resource.

At the end of the day, all of these factors are important when evaluating potential warehouse spaces, but the heart of your business model will have the most impact on your decisions.  A successful company is never stagnant and core products will inevitably evolve over time. Future growth, fluctuating customer demand and changes in manufacturing need to be considered for success and maintaining a competitive edge; do you have room to grow and adapt?

©Novo Textiles co 2014