Channels to Leverage Warehouse Revenue
This is in continuation to my previous blog on "Considering Warehouse as Profit Center".
http://infosysblogs.com/supply-chain/2008/09/considering_warehouse_as_profi.html#more
Now let's look into how a warehouse can transform itself into this new found 'avtaar'. One such aspect would be to have multiple business units within the same organization utilize the services of a single warehouse. In such a setup, business units store their goods in the warehouse in dedicated zones allotted to them. The warehouse, in turn charges each business unit for storing their goods based on activities carried out and storage space utilization, thereby creating revenue for itself.
Another source of revenue generation would be value added services that a warehouse is capable to provide its users. These can be label printing, kitting, assembly, shrink wrapping and so on. The warehouse sets up its price list for these services that can be charged as an when they are used or as a single monthly charge.
Warehouses capable of providing special handling equipment for goods is another case for where such services are charged to customers. These could be handling hazardous and inflammable items, liquids or fragile items that need to be handled with care.
Last but not the least, 3PL business from the warehouse aspect, is purely to create revenue from lending space. Charges are based on warehouse space utizilation for the period of storage and activities carried out during inbound and outbound operations.
Comments
Going ahead with the idea of lending warehouse to multiple business units within the same organization, it would add to the revenue of the organization if the warehouse is given on lease to another organization. Let us take a typical business scenario, warehouses of organizations are not completely occupied throughout the financial year. Certain months are forecasted to have higher sales and the rest to have moderate sales, it is during this period that organizations can put their warehouse space on lease. If peak sales months of two organizations do not match then they can agree to share their warehouses thus adding to the revenue of the organization.
Posted by: Gaurav Varma | November 17, 2008 07:44 AM
Yes, you are absolutely right. There are instances where companies have let out space for lease during slack period. Other do keep a fixed space within a warehouse for lease.
This model works where the business is more seasonal and stocks pile up only during a certain period during the year. For the rest of the time, the unused space is let out to external customers, thus generating additional revenue.
Posted by: Lokmanya Rawat | December 30, 2008 12:14 PM