By Ella Mason | 28 November 2014
Demand for warehousing in the UK is riding high at the moment thanks to an upturn in the manufacturing industry. The warehousing and storage industry has been performing relatively well over the past five years and, according to ibisworld.co.uk, it is expected to grow at a compound annual rate of 2.7% over the five years through 2014-2015 to reach £13 billion.
The success and endurance of the industry through the economic downturn has largely been due to its ability to adapt to the needs of its customers. With supply chains becoming more complex and the market becoming more competitive, the focus of the industry has turned to supplying additional services like finishing, picking and packing and most warehouses now act as distribution centres rather than just storage facilities. However, despite the increasing number of benefits offered by 3PL warehousing providers, some manufacturers still shy away from outsourcing, citing the same concerns that have always plagued the industry.
One of the biggest concerns for manufacturers is the lack of inventory access. Businesses that are used to having their inventory onsite find it very difficult to relinquish that control to a third party, preferring to have their stock where they can see it. One of the best ways to combat this is to encourage manufacturers to move a small percentage of their stock first, for example, their fastest selling items. This will help them to understand the process and allow them to experience the benefits that outsourcing can offer, in particular, the freedom to focus on growing their business rather than worrying about fulfilling orders and managing stock.
Another key concern still held by many manufacturers is that outsourcing their warehousing will lead to a drop in quality. The manufacturer expects their employees to share their own passion and knowledge about the products they send out and fear that this cannot be replicated in an external warehousing operation. Product knowledge may not be a problem for manufacturers of more common items but for more specialist manufacturers like Airblast AFC, there is a concern that warehouse staff will not be able to recognise products or may handle them incorrectly leading to mistakes and decreased customer satisfaction. Warehousing providers need to be able to demonstrate to manufacturers that this is not the case and that they can provide the high level of customer service required. This is not just about covering the costs of mistakes but about putting measures in place to maintain quality. Some providers already offer contracts which identify and a measurable process for quality reporting which can help reassure manufacturers that their standards will be maintained.
Finally, manufacturers fear that outsourcing will have a negative impact on the way customer queries or problems are dealt with. With part of the business being run off site, the concern is that when a problem arises, the response will be slow and arduous; lots of back and forth phone calls and emails. It is up to the warehousing providers to prove that this will not be the case. Some providers may have multiple customer service contacts to ensure that problems are dealt with as quickly as possible although this can lead to frustration for the customer or manufacturer if they are dealing with different people each time they make contact. In order to combat this problem, warehousing providers may assign account managers as this helps to reassure the manufacturer that, when a problem arises, they have a dedicated point of contact who will chase up and resolve the issue on their behalf.