On-Demand Warehousing on the Rise
For years, retailers embraced what is called the Just-in-Time Model (JIT) when it came to stocking inventory. Investopedia defines JIT as: “The just-in-time (JIT) inventory system is a management strategy that aligns raw-material orders from suppliers directly with production schedules. Companies employ this inventory strategy to increase efficiency and decrease waste by receiving goods only as they need them for the production process, which reduces inventory costs. This method requires producers to forecast demand accurately.” For retailers, this means receiving inventory just before selling it, rather than having it on hand.
With the boom in e-commerce, and supply chain complications, many companies have turned from a JIT model to a Just-in-Case (JIC) model. In the JIC model, this means keeping more inventory on hand to make sure stock is readily available to consumers.
However, more stock means more space is needed to store these goods. Traditional warehouse solutions may no longer be viable as a singular option. Supplychainbrain.com reports: “Even with record levels of industrial space under construction, most buildings are pre-leased before construction has even started, and high net absorption rates means construction can’t come fast enough.”
Companies like Flexe are stepping up with short-term, on-demand warehousing solutions. Rather than offering the traditional long-term contracts, they allow companies to scale their warehousing needs based on volume and time needed. Both sides of the partnerships, warehouse owners and companies with logistics needs are utilizing Flexe technology to optimize these processes. It’s exciting because they’re using more than just traditional warehouse space. Property owners can leverage almost any space. For example, unused department store fronts can be utilized as warehouse space in this model. Gartner Research Vice President Dwight Klappich says, “Things are changing more rapidly than many companies could react in the way they previously built their supply chains, which were either heavy capital investment in fixed assets like warehouses or signing multi-year contracts with third-party logistics.”
On-Demand warehousing looks like the future of logistics storage solutions.
If you’re facing inventory issues, reach out to your trusted partners at SecurCapital. We have the resources to craft personalized solutions to overcome these challenges.