1. Do you REALLY need a warehouse? The power of Working Backwards
2. What are the core drivers impacting decisions around warehouses

3. Data, data, data. What you need to know before anything else

Do you really need a warehouse?

Many years ago when I was just 18 I had a university interview and one of the questions has stuck in my mind ever since.

“You’re a builder and your customer has said they want a wall at the bottom of the garden. What questions do you ask?”

Of course I thought of all the obvious ones, or so I thought.

• What material do you want, brick, stone etc?

• How high should it be?

• Do you need a gate? I was particularly happy with this one as I thought I was going beyond the original customer request.

• Where exactly should it be?

The interviewer let me go on for some time and gently nodded along. At the end he told me there was one question I didn’t ask “Why do you want a wall? What about a fence or a hedge”. I’ve taken this with me through my career and always tried to ask myself “Why do I want a wall?"

Working Backwards

When I arrived at Amazon I discovered the technique of Working Backwards and the PR/FAQ. I won’t discuss it in detail here but you can easily find information here and through the links page. Working Backwards forces you to think about your customers and their needs. Do they need a wall or would some other barrier (or even nothing at all) be more suitable?

During my time there I wrote almost a hundred and since I left I’ve continued to use the technique. I probably formally shared less than ten percent of them but I find it a great way of aligning your thoughts – a bit like this website. Sometimes I’ll write them in detail but often as well it’s just a simple framework. However I do it the preparation forces me to go back to the basics and understand what I’m really trying to achieve and where the benefits will lie for the customers.

You need this when taking the decision about a warehouse. Asking this won’t just help you understand if you need this or if there is a better alternative but also it is fundamental when it comes to planning the eventual warehouse.

The alternatives

There are a lot of options to owning and running your own warehouse and they all bring advantages as well as disadvantages. Even if you decide that your own warehouse is the right path it’s worth considering all of these as a supplement to your own facility. They can give access to new markets, help you cope with peaks, give you an emergency backup option and also deal with special cases – imagine 1% of your products are hazmat, why not outsource that 1% and save money on the additional modifications you’d need to make to your own facility.

Make to order. It’s almost the “Why do you need a wall?” question. Do you really need a finished goods warehouse? If you can only make products to order and with a delay that is acceptable to your customers then it’s a lot cheaper to skip this whole step. It will also almost certainly allow your customers to tailor and specify their product more exactly.

 

 

Contact us

Please leave a message with coments or for more information.