Steps you should take to complete your move with minimal business interruption and cost.
Operations by Dan Bolger, P.E.
This could be the right time to move from your current warehouse. Today’s driving force for warehouse relocation is the availability of outstanding facilities, in excellent locations, at extremely low purchase or lease prices far below replacement cost. Many retail markets are starting to recover and create opportunities for remaining competitors.
Other reasons for moving your warehouse include:
- Expanding showroom space into an adjoining warehouse.
- Moving to gain overall logistics productivity.
- Space needs changing due to business growth.
- Business downsizing.
- Lease issues such as reduced rents.
- Lessors wanting the space for their own use.
- Appropriation by governmental agencies.
- Disasters such as storms or fires.
- Reconsideration of projects sidelined before the recession that now can be rebid at substantially lower costs.
The fundamentals of determining requirements for warehouse facilities were covered in Furniture World’s June 2006 Furniture World article titled “Thinking About a New Warehouse” (posted to the Operations Management article archives on the furninfo.com website.) The starting point for this article assumes all that work has been decided upon and is progressing.
This article continues where that one left off, and provides practical information on final planning for a warehouse move so it can be accomplished with minimal business interruption and cost. Lacking a solid plan, you risk losing control of inventory, theft, excess costs, and customer alienation. Proper execution requires a team effort and you need to require the involvement of everyone in your organization to ensure success.
This is also an opportunity to take a fresh look at existing processes and to seek improved methods and procedures. For example, relocation from an adjoining warehouse requires that you coordinate transferring merchandise to the store and the return of sold goods to the warehouse for delivery. There isn’t a cookie cutter solution but this article summarizes the key issues.
In an ideal world, a detailed moving plan should be conceived and discussed about four months before the anticipated moving date. However, planning can be compressed as needed. We have initiated warehouse moves in a few hours under emergency conditions. Hopefully that will never be your situation.
It is absolutely essential to assure inventory integrity before the move starts, as it is impossible to clean up inventory during a move. Review your inventory sku by sku and create marketing plans to sell, donate, auction or scrap anything that won’t be in the new lineup. You may also find non-saleable goods that can be repaired and sold. Everyone loves a sale, and a Warehouse Moving Sale is an exceptional opportunity.
Sold goods should be immediately removed by the customer, or if delivery is an option, it must be placed on the next available truck to the customer’s area.
Another inventory category to address is inventory that is sold but awaiting delivery. This can be challenging as some customers’ homes may not be ready due to remodeling efforts or other circumstances, Even so, making every effort possible to reduced inventory will help avoid problems.
Assuming you have a bar coded inventory system, best practice is to sequentially scan from the origin storage location, to dock, to truck, to new warehouse dock, and finally into the new storage location. While this can be done manually on paper, the chances for error are substantial. Verify in advance that communication links are complete when the move starts, or that alternate methods are available.
Smaller warehouses can be moved over a few days by shutting down or minimizing deliveries so existing staff can do the moving. The staff may be supplemented with help from other departments and their families. If the distance to the new warehouse is short, you may choose to move with your own trucks and possibly some additional rental trucks. On longer moves a preferred option is to use multiple 53 ft. air ride semi-trailers and a semi-tractor for maximum capacity, flexibility and control. Obviously you will need lots of blankets when moving open stock.
The typical move is done in phases with receiving
initially transferred to the new warehouse, while coordinating shipping with the old facility. At the appropriate point, shipping and delivery is transferred to the new facility. At that point remaining good stock can be moved to the new warehouse. At this point you have another opportunity for a warehouse closing marketing sale.
Print ads used during a warehouse move by Coconis Furniture based in South Zanesville, OH accompany this article. Sherman’s Furniture with three stores in Ilinois, used TV and radio spots to promote their warehouse moving sale. These can be viewed at the shortened web link, http://bit.ly/1IUKB.
Would your customers buy a leather couch with miss-matched cushions? Experience shows that at the right price, almost anything will sell. The final step may be to have an on-site auction or remove orphan inventory to an offsite auction. Anything else may be donated, recycled or trashed.
The bottom line is that your plan should be in print, discussed in a roundtable with the people actually involved in the work, and formally updated periodically.
BEST PRACTICES CHECKLIST FOR WAREHOUSE MOVES
- All occupancy and building/fire permits are in place on schedule.
- Inventory integrity is maintained throughout the move.
- Computer systems appropriate to the new requirements are in place.
- Security steps are taken in both locations and transport vehicles.
- Moving plans are discussed among all key people in roundtables.
- Buyers reduce inventory levels prior to the move.
- Backlog of shop repairs will be fixed and minimized.
- Delivering sold but not scheduled orders is emphasized.
- Inventory management reviews all skus for warehouse sales.
- Creative marketing plans sell off excess inventory.
- Sufficient staffing is obtained to complete the work within schedule.
- Processes are reviewed to identify necessary changes.
- Have sufficient moving equipment such as trailers, trucks and pads.
- Only good stock is moved to the new warehouse.
- Management cheerleads the team to accomplish the necessary goals.
- The move is virtually invisible to customers.
Each of the above topics has additional steps of responsibility assignments, next review date, comments, completed checkoffs, etc.
An more detailed Excel Warehouse Planning worksheet is available by request at www.bolgergroup.com/contact.php.
Daniel Bolger P.E. provides operations consulting services to clients throughout North America. FURNITURE WORLD Magazine readers can contact him at bolger@furninfo.com. For more information on transportation, logistics and furniture warehousing topics, go to furninfo.com to read all of Dan’s articles.
Dan will be presenting a free educational seminar at High Point in the NHFA Retailer Resource Center at 5 PM on Saturday October 17th. His topic will be “Improve Your Warehouse and Delivery” The location is 1st Floor, Plaza Suites.