How 3PL companies select warehousefacility location? – Quora

This is quite a great questions. and also, my honor to have this my first answer.

I am now working in a top logistics company, under the BU of 3PL. And for me, I have been learning and focusing on logistics for quite years. here may be some info could help you to understand how we propose a warehouse location solution for our customers.

Usually below six dimensions are taken into consideration when designing / optimizing a distribution network or selecting a facility location. But for different customers or sectors, we take different factors into consideration.

Considering the key factors, and list the seed locations, for instance,

Do detailed comparison analysis in according to different dimensions with quantitative rules.

COG analysis: COG Analysis by Whole Market/Geographic Regions/Commercial Regions, e.g.

Summarize all info with weight, and rank them

comparing the as-is model and to-be model, cons & pros, network pattern, product flow, key points to notice, etc.

average lead-time, Service level, and warehouse capacity (these four are quite common and vital figures for 3PL)

Summarize and Recommend the solution base in respective of yours (always present a conclusion to your customer, this is quite important)

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The first step in learning how to select a3PL warehouseis to know your objectives and 3PL requirements: Experts recommend that companies should define their logistics goals before taking on a3PL. The defined objectives will help to establish the criteria for 3PL selection. Some of these includeIT capability, alliance partners, customer service, and cultural fit.

In determining needs, a business owner should look beyond the basic need of a warehouse to store things. While, this is correct there are also other considerations.

nature and characteristics of goods to be stored

nature of handling equipment available

duration of storage needed i.e. short term or long term

the need for other activities, e.g.

There are a range of factors to consider when selecting a new 3PL warehouse facility These may include:

Three times I have tried it with different companies (2 with 3pl in mind, and 1 for optimizing own logistics setup). And throughout them all the prioritizing have been:

Demand vs. infrastructure vs. availability vs. price.

What are we selling, and to what will I use the facilities, I.e. palletwarehousing or bulk stock

How does goods come in and out? Do I need to locate near train, airport, seaport? Or is the goods transported by road, and this is less relevant?

Consider also your customers costs (Wilsons formula or other calculations) with focus on total time (transport, stock, packaging, transport to end-user).

What can I acquire and at what cost. Compared to two other points.1.1kViewsView UpvotersHarmeet Kaur, Tea enthusiast (Herbal tea, organic,pure)Answered29w ago

Companies deciding where to locate a warehouse must often turn to outside experts to help them make an effective choice. Perceptions about where to locate are often incorrect, so companies may choose to rely on a broker who knows an individual submarket, and can guide them in the right direction.

A pertinent example is what takes place in the Los Angeles marketplace. Most businesses that plan to operate a warehouse for goods distribution in Southern California assume that it makes sense to locate near the ports. After all, if you minimize drayage costs, then overall costs of processing goods should be lower. But that is not necessarily the case.

First it involves Identification of available Location for your facility

Important point in the New warehouse creation is conducting a market Research for how much market is available in the Location

Next With that market Data assume Demand distributions and Simulate the environment with different Alternatives available.

Is it hard to organize a warehouse and starting as a single person 3PL what kind of margin is needed to grow?

Are 3PLs a growing or shrinking part of the transportation spend of most companies?

What is difference between CFA and 3PL?

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What are the benefits of using a 3PL (Third Party Logistics) company vs having your own warehouse?

What is the difference between 3PL & 4PL Service Providers?

Why do you wanna work for a 3PL company?

Still have a question? Ask your own!

Where do I gain knowledge to start 3PL a company?

Who would you add as an advisor for a start-up online 3PL and why?

What are the top 3PL companies serving Amazon?

How do I start a 3pl logistics company?

Is it hard to organize a warehouse and starting as a single person 3PL what kind of margin is needed to grow?

Are 3PLs a growing or shrinking part of the transportation spend of most companies?

What is difference between CFA and 3PL?

What licenses are required for a warehouse which is handled by 3pl?

What is a good place to locate warehouse (for apparel)?