It is estimated that the amount of vacant warehouse space in the UK is 32 million square feet, which is about 7.5% of the total available, but of this vacant space it is estimated that 20% is probably not suitable for logistics purposes. (Source: Edelivery.net Sept 2015) The bottom line with this information is that there is not as much useable spare warehouse space as there might be and so finding available space to cope with expansion or relocation is more difficult.
If you manage to find extra off site space, then a decision will have to be made – is this the right move or could extra warehouse space be found on site?
It has often been the practice to look long or short term warehouse space off site, particularly if it is an immediate requirement due to an unexpected order or an unfortunate occurrence like a fire. It is an option that many companies choose although there are inherent difficulties in operating multiple sites.
As well as the cost of the lease, any extra space located off site will involve extra transport costs and administration such as stock control, which can impact on lead times and customer service. Other costs such a security, maintenance and making the building suitable for your operation, may come into play. It may be that for a large business, such as a distribution centre, may be able to absorb these costs and consider the split location as less of a hindrance, but for other businesses the cost may be prohibitive. Is there another option for more operational warehouse space?
A temporary warehouse installed on site can provide more space without the additional costs associated with moving off site. An aluminium framed temporary building only requires hard standing as a base and can be installed in a matter of days. If required, this type of building can be fixed to an existing structure to maximise the available space and ensure integration with other operations.
The temporary building can be purchased outright or hire for the short or long term. The hire option is an advantage particularly when it is important to know that monthly costs are consistent and the cash flow can be controlled. The main benefits of a temporary warehouse on site can be summed up as follows:
- Speed: These buildings can be installed and operational in as little as four days. They only need hard standing and can be positioned as required
- Cost: Hiring means you can literally pay as you go, with short or long term options. Buying outright offers considerable savings over a conventional permanent building – up to 70% in some cases
- Flexibility: You are in control of how you finance your building, which can expand or contract with your business requirement. If the building is no longer needed, it can be removed with little evidence of it ever having been there
Overall the choice to use on or off site warehousing is a business decision determined by the operational requirements. There is no right or wrong solution but using a temporary building to create more space has much to recommend it and is worth considering in any future planning.