Warehousing

Warehousing is all about everything to do with a company's stock. Running a warehouse often requires a large investment of both time and money. By outsourcing warehousing, companies can save resources, focus on other parts of the business and have the opportunity to expand faster.

What is warehousing?

Warehousing is when companies hold products, materials or spare parts in a warehouse. Shops, restaurants and e-tailers need stock to sell to their customers. If something is out of stock or if something is missing, this has a negative impact on sales.

Manufacturing companies need stocks to keep the production process running. If there are deficiencies in inventory management, machines can become idle, which costs money. In addition, both retailers and industry may need to maintain stocks in order to meet certain warranty obligations.

Read also: Central Warehouse

What should I consider?

When it comes to warehousing, there are several aspects to consider - both in terms of costs and key performance indicators to measure efficiency and keep track of operations. To keep track of inventory, a system for stock management is often used.

Costs

Warehousing is always associated with a range of storage costs. Here are some of the most common ones:

• Storage space: The actual space where the warehouse is located must be rented or purchased. In addition, it must be maintained.
• Storage furniture: Shelves and cabinets must be purchased and maintained. It is a cost that may be greater than anticipated.
• Transport: If the warehouse is large, means of transport are probably needed to move goods. For example, forklifts and shop stackers.
• Personnel: Wages and training for the people who work in the warehouses.
• Operation: Electricity, heating, alarms and possible cooling cost money.
• Capital costs: In addition to the capital costs of the warehouse itself, the products stored tend to be capital intensive.

Average storage period

The average storage period is a key figure that shows how long a particular product or commodity is in stock. Keep in mind that the longer the storage period, the more capital you tie up in storage. Since cash can always be used for something else, such as new investments, companies tend to keep the average storage period as short as possible.

Turnover rate

The stock turnover rate is directly linked to the average storage period. This ratio shows how quickly inventory is turned over. It is generally good to have a high turnover rate because you are not tying up unnecessary capital in the warehouse. At the same time, excessive inventory turnover can lead to shortages.

Stock intensity

The stock intensity key figure shows how much of the balance sheet is accounted for by inventories. Typically, you want to aim for low inventory intensity. If it is too high, there is a risk that products will become old.
Reading tip: What is logistics flow?

Why outsource your warehousing?

As you can see, there is a lot to think about when it comes to warehousing, especially in terms of costs but also a lot of practical and administrative work. That's why it's often a good idea to outsource your warehouse.

This has several advantages:

• Cost-effective
• Less administration
• Outsource stock monitoring
• No problems with overstock
• Extra services such as import

PostNord warehousing and third-party logistics

PostNord offers warehousing through our third-party logistics service. Many companies use us when they want to expand and find that existing stock limits the pace of expansion. But you can also outsource all logistics and warehousing to us. In this way, you can increase the efficiency of your company's entire logistics chain.

Our warehousing and third-party logistics include:

• Storage
• Shipping
• Distribution
• Import and customs management

Of course, our warehousing services work perfectly with your PostNord Portal Business account. For example, you can book shipping online and let us take care of packing and sending the package to your customer.

More articles on warehousing and logistics can be found on the logistics articles page.