Up until fairly recently, small warehouse operations have had to face serious obstacles when scaling up, especially during short boosts in demand. While one could plan for seasonal upticks in retail or production demand, the increasingly fast and unpredictable market cycles brought by global digital transformation meant that transitory demand increases were becoming more common and were happening with shorter onsets.
Even when warehouses served a relatively stable market, scaling up also had—and still has—challenges. Limited capital and rising real-estate prices often prevented smaller warehouse businesses from investing in larger storage spaces, upgrading equipment, or hiring additional staff. As a result, many of these operations had to simply bear their existing constraints, often giving up opportunities to meet growing demands.
However, many things have changed in the market and technology environments of warehouses. Inventory management technologies have become more accessible and the support systems for smaller warehouses have also become far more sophisticated. These have opened up a deluge of expansion opportunities for warehouse operations of all sizes.
7 Tips for Sustainably Scaling Small Warehouse Operations
Below are a few practical tips to help small warehouse owners scale up efficiently and sustainably. If you operate a small warehouse, be sure to adapt these tips to better fit your existing challenges.
1. Optimise Warehouse Layouts
If a warehouse cannot buy or lease additional space, optimising currently available space is the only way to increase capacity. Fortunately, there are almost always areas for improvement in small warehousing operations, from the strategic rearrangement of storage areas to a maximisation of available vertical space. For the latter, investments in reach trucks or other similar assets will help increase capacity without requiring expensive real estate acquisitions.
2. Invest in Scalable Warehousing Technology
The right tech investments ensure that operational systems grow alongside the business. Many smaller warehousing operations start with rudimentary organisational tools like Excel or Google Sheets, necessitating error-prone manual data processing and limiting their capacity for sustainable growth. To enable sustainable growth, small warehouses must invest in modern warehouse management systems or similar technologies.
While different warehouse tech providers have their own ways of describing their offerings, all modern warehouse software tends to provide similar capabilities. Most will employ barcode or RFID scanning technology to minimise human input errors and boost efficiency. Others may employ a cloud-based system to better coordinate operations at multiple locations. Some providers may even offer hardware like conveyor systems and robotic pickers to enable safe, round-the-clock warehousing.
3. Hire and Train Employees Who Can Maximise Modern Tools
Modern warehouse technologies often require additional skills that aren’t needed in traditional operations. For that reason, warehouses must also consider best practices in hiring and employee development. With expert users, warehouses can fully leverage their tech investments to support data-driven growth, enabling lower baseline costs and more agile operations.
4. Develop Standardised Warehousing Protocols
Having clear protocols for receiving, storing, and dispatching goods reduces handling time and makes operations much more predictable. As employees develop mastery of your system, order-picking efficiency should increase and the time to resolve errors should also become shorter. Critically, having a clear system in place helps with audits, ensuring inventory accuracy and making the business more credible.
5. Optimise Workforce Management
As mentioned, scaling up operations requires a well-trained workforce. However, the way employees are deployed and developed also matters. Solutions such as cross-training, performance incentives, and professional training can be further explored to elicit more productivity. Additionally, strategies like employee break and schedule optimisation can be explored to ensure adequate staffing during peak times without extra costs, smoothening business expansion.
6. Diversify Supplier and Distribution Networks
Having just a few suppliers and distributors can leave warehouses at the mercy of unforeseen events. Fortunately, deregulated global markets mean that there is less of a need to rely on a single supplier or distribution channel. Small warehouses can thus use modern digital channels to explore relationships with multiple parties to reduce the risk of stock issues. Likewise, businesses can look into third-party logistics providers that can facilitate order fulfilment to support growth without the need for more internal hires.
7. Secure Safe Funding for Expansion
Thanks to the rise of global trade and finance, small warehouses have more options than ever for acquiring capital funds. In the current economic climate, small warehouses can often qualify for a slew of government and private equity funding, particularly if they serve an identified growth sector. Additionally, there are now more third-party warehouse suppliers that can lease equipment or offer qualified labour, giving warehouses more ways to free up expansion funding. With these options in place, warehouses now have a much better chance of executing a sustainable expansion.
Scale Your Warehouse Smarter With the Right Strategies
Shifts in market and technology trends mean that scaling up warehouse operations is no longer as difficult as it once was. With global markets continuing to develop, smaller warehouses should consider expanding their operations to better keep up with the times.
However, while these tips are a good starting point, every warehouse business is unique. Thus, success will likely depend on adapting these strategies to meet individual operational needs. With an eye out for wider trends, smaller warehouses should be able to expand and capture new opportunities with minimal growing pains.
Also Read: Maximizing Storage Efficiency with Heavy-Duty Cantilever Racks for Industrial Applications
