Trade Secrets

Jun 01, 2002 9:30 PM  By

Although over half of the warehouses in the U.S. are privately run, their operations remain largely a mystery. Some clues, however, have been unmasked by the Warehousing Education and Research Council. In a recent study, “Private Warehousing: A Snapshot,” WERC researchers offer statistics gathered from a variety of sources to shed light on the puzzle.

MEASURE MEAN PERFORMANCE
Orders shipped on time 95.8%
Order accuracy 96.9% as ordered
Annual inventory turns 10.1 turns/year
Warehouse G&A/Total whse. $ 28.6%
Storage space utilization 80.0%
Source: WERC, “Private Warehousing: A Snapshot,” 2002

Although trade magazines tend to highlight retail or direct-to-customer warehouses, a survey conducted by the study’s authors indicates that 61% of private warehouses are run by manufacturers and 26% by wholesalers. Rather than use 3PL providers, companies choose to operate their own warehouses to maintain tighter control over service, support marketing efforts, and take advantage of the perceived lower cost of proprietary warehousing.

Labor was the largest concern for study respondents, one-third of whom ranked finding and retaining high-quality workers as their greatest challenge.

The authors also question trade magazines’ view of private warehousing, which tends to focus on private warehouse success stories and to emphasize, perhaps disproportionately, retail and DTC operations and their use of new technologies.

For more information, contact WERC at Jorie Blvd., Suite 170, Oak Brook, IL 60523; ph.: (630) 990-0001; fax (630) 990-0256; e-mail: wercoffice@werc.org.