Warehouse Relocation Framework 

Undertaking a warehouse relocation project or a factory relocation project is a significant challenge to the uninitiated and can expose your organisation to a number of pitfalls if not undertaken by qualified and experienced supply chain and logistics professionals.

​

Our experienced team at “A Turn Key Solution” would like to outline our warehouse relocation framework for you to consider when embarking on your relocation project. This is an indicative guide only and by no means reflects all of the details of such a significant project.

What do I need to do to undertake a warehouse relocation or factory relocation for my business? We propose the following:

• Operational Analysis
• The relocation project team
• Site location
• Micro analysis by location
• Develop a project plan
• Execute the plan

Operational Analysis - warehouse relocation framework

Prior to looking for your site location, it is important to undertake an operational analysis by reviewing the current state of your business. Key areas being:

1. A review of your Warehouse Management System to determine current capability, fit and is the product scalable to integrate other forms of technology.
2. Operational process review of product flow, information flow and documentation flow.
3. Current warehouse layout to determine bottlenecks, and opportunities to maximise utilisation and speed to floor.
4. Transport service level, the cost to serve, effectiveness and response.
5. The location of your customer base.

Based on an initial first pass, improvement opportunities need to be identified and a cost v benefit developed with the aim of improving efficiencies and overall cost control without compromising on target service levels.

​

It is important to note that when developing your feasibility, key personnel need to be consulted at the operational level as new or innovative practices may be identified and could provide significant savings for your business.

​

Proposed areas of focus during the feasibility study:

• Delivery policy and its effectiveness in driving out process delays and cost in logistics.
• Receiving cycle time for all imported or local products.
• Inventory Put-away process cycle time
• Order release and pick process effectiveness
• Despatch process cycle-time and level of flexibility and response to critical clients.
• Physical distribution, the cost to serve local, intrastate and interstate customers
• Conformance and adherence to your Quality systems.
• Source of inventory supply.
• Placement of products within the warehouse based on movement history.
• Reverse logistics process managing credits, returns and process cycle-time.

Develop a working document listing needs and initiatives for your relocation. At this point in time, your business needs to make a decision on managing this relocation initiative in-house or appointing a project specialist such as “A Turn Key Solution” .

The relocation project team - warehouse relocation framework

The composition of the team is very important and will dictate the success of your project. Individuals who bring to the table a range of skills who are capable decision makers, well organized, have the technical expertise, good communicators and above all are capable of delivering on expectation.

Site selection - warehouse relocation plan

A number of factors are important when deciding on a final location for your new site and achieving a balance of cost versus service is the primary objective. Developing a set of criteria with weighted rankings is a healthy starting point as it represents a structured approach for your final decision. The challenge facing your business is deciding what criteria to use and weighting accordingly. Criteria may include:

• Existing site with a level of infrastructure.
• Greenfield site purpose built.
• Infrastructure and population of new employees
• Community location of Semi or fully skilled employees
• Proximity to transport services or routes
• Proximity to suppliers
• Environmental factors
• Future plans for the area

Micro Analysis by location - warehouse relocation plan

As you have narrowed down you list of prospective sites, it is important to attaining more data at a ‘micro' level, to ascertain suitability and fit. Details may include:

• For each site, a detailed review of your inventory by SKU and order level by supplier to understand the inbound delivery network and the costs associated with the new model.
• For each site, a detailed review of your outbound process by SKU, order and customer location to understand the distribution network and the costs associated with the new model.
• Understand who your competitors are in proximity to your proposed location, their response time to clients and their estimated cost to serve.
• What inventory is your competitor holding and what service levels are being achieved.
• Based on all of the above, understand if the outcome represents real value add for your business which will place you ahead of your competitor.

By undertaking the Micro analysis, you are better placed to make an informed decision on your preferred location as it is fact based and addresses most of your business requirements.

Develop a Relocation Project Plan

A project plan is developed to a task level and your team works through the mechanics to ensure that a seamless transition is delivered resulting in minimal disruption to your existing operation. Customers must be informed of the relocation and need to be managed closely based on their level of importance to your business.

Execute the warehouse relocation plan

​

Key tasks from the project plan to be managed include, but not limited to:

• Establish which equipment is essential such as spare parts, tools, racking and other ancillary requirements. Tag for transfer or disposal and be ruthless as it is about value add not hoarding which increases your cost of operation.
• Install infrastructure according to the new layout.
• Complete fit-out requirements for offices.
• Install equipment and commission to ensure functionality and performance are achieved.
• Relocate noncore administration services first followed by core services as part of your cut over plan.
• Transition your inventory to the new site making sure to balance stock for both locations as it is important to maintain customer service levels. This is the most challenging to achieve as you will find that the smallest customers will tend to suffer and will create noise which will escalate within your business.
• An effective change management program is essential and communicated regularly to internal and external stakeholders and clients.
• Continue delivering from your existing site until such time that a handover or cut over is achieved. There is never a clean time to cut over systems, services and deliveries so your success will be greater if the cut over plan is undertaken over the week end.

From this point when you have made the cut over and are now operating from the new site, there will be teething problems that will need varying levels of attention as no project will run 100% smoothly. The key to your success is to tackle each issue on its level of importance to the business and documenting these fixes so that if they do arise in the future, a work around or final solution may be implemented and the issue closed.

​

​