POOLED WAREHOUSES: AN OPPORTUNITY FOR 3PLS
Published on 13 June 2019
Several supply chain players such as Walmart in the US or Carrefour and Danone in France have recently begun operating pooled warehouses, in the hopes of reducing logistics costs and optimizing transportation methods to turn storage facilities into more profitable enterprises. Today, storage and transportation are the two most commonly pooled resources along the logistics chain. Such strategies offer a multitude of advantages and challenges for 3PLs.
The dawn of pooled warehouses
In a traditional organization, supply chain providers store their clients’ merchandise in multiple warehouses according to specific instructions, such as dry or cold product storage. These specifications require that they seek out additional storage locations, depending on product nature.
Ever since multi-temperature warehouses hit the market, logistics chain professionals have been revising their organizational model, which begs the question: how can separate storage locations be used when delivering to the same end client? Manufacturers that use 3PL are sometimes competitors, but their products are usually complementary and intended for a single group of clients. Additionally, logistics and transportation professions do not change according to product type.
In this context, pooled warehouses are particularly effective. They have begun developing abundantly in the agri-foods industry and the highly selective perfume, DIY, and household electronics sectors.
Advantages of warehouse pooling
On today’s market, pooled warehouses are a boon for both manufacturers and 3PL providers.
Adaptable to task sharing and specific needs
From a manufacturer standpoint, pooling helps reduce product storage costs. Providers can benefit from a warehouse space that is tailored to their needs and can split the burden of some logistics tasks, while also enjoying improved quality of service.
New services and risk management
On the 3PL provider front, pooled warehouses are particularly interesting when offering new services for managing the activity of each provider present at the warehouse. They also efficiently limit risk following the loss of a client. Real estate costs when managing a warehouse can also be shared between several clients.
For further reading: 3PL: transportation of the future - a pooled resource
Pooled warehouses: challenges for 3PLs
In a multi-client environment, pooled warehouse management can be particularly problematic for 3PLs when each client has its own warehouse management system (WMS). When this happens, operators must become proficient with each system used in order to optimize storage space and order preparation management. This can, however, be simplified into one single solution, either through upstream negotiation or a call for tender.