A white paper that explores "Warehouse Capacity and Economic Trends" has been release by FLEXE -- a rapidly-growing Seattle start-up that connects organizations in need of additional warehouse space with organizations with extra space.
Some of the key findings include:
- 75% of study respondents report experiencing “significant” fluctuations in inventory. Perhaps even more interesting is that over 90% respondents see these issues continuing or increasing over time. That means nearly every organization is dealing with challenging capacity issues at some point in the year and don’t see that ending any time soon
- 70% of respondents that reported having extra capacity at some point during the year acknowledged they have no solution for that problem. They simply accept the extra capacity as sunk costs. For those with extra inventory, there were more solutions cited. These are led most notably by obtaining short-term leases, (though as we all know these can be notoriously difficult to reliably find) followed by shifting inventory across distribution centers, selling off inventory and long-term leases. Interestingly, less than 20% of respondents use their 3PL to secure short-term space.
For years, firms have driven their supply chains to be stable, predictable structures. Yet, increasing demands to be more responsive now challenge that approach. Organizations deal everyday with seasonal swings, return issues, opening new markets and rolling out new products. Being responsive means addressing the dynamics that cause inventory variability. Those solutions must be scalable, secure, compliment existing structures and deliver cost efficiencies. Nowhere is this more evident than in the warehouse. These increased demands are driving the growing practice of On-Demand Warehousing. On-Demand Warehousing is a spot market companion to the existing “long market” built on warehouse leases and/or property ownership. It is analogous to adding outsourced warehouse labor to an existing team in order to better meet variable demand by matching the capacity deployed to the capacity needed.
Learn more about FLEXE at www.flexe.com.