You’ve found the right warehouse in the right location. You’ve planned your zones and warehouse. You’ve invested in any additional equipment. You’ve signed the contract; the money has been spent.
Now it’s moving time.
As exciting as it may seem, moving from one warehouse to another is a significant operation with many steps and moving parts to consider—two big locations, many employees, equipment, and, of course, inventory.
In the final chapter, we discuss all the practical things you must consider as you vacate your current warehouse and move into your new location, as well as how to limit disruption to your business.
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Preparing the New Warehouse
Before moving into your new warehouse, ensure that everything structurally part of the building is in working order and that there are no dangerous areas.
Assess if any renovations are needed, as this can significantly delay moving if not spotted early and dealt with.
Renovations should occur before moving into the new warehouse, as they may interfere with the work. This also includes ensuring your electricity and water connections are operational.
Furthermore, if there is any machinery left that you intend to use, such as conveyor belts, does it need repair work?
You also need to consider if the new property is properly secured. Neglecting to invest in securing the new warehouse can be an enormously costly mistake. Entry points must be secured to prevent damage, vandalism, and theft.
Lastly, do you need to ship any new equipment to the warehouse before it can be operational?
Permits and Regulations
It can be a huge mistake not to ensure that you have all the necessary permits and meet all legal requirements before starting operations in your new warehouse.
Before purchasing a property, find out if you need a permit to start using it as a warehouse, especially if it is new or used for another purpose.
Remember that different states, cities, and municipalities have different laws. Ensure that you also look into fire and occupancy permits.
Timeframe and Creating a Schedule
Arguably, the most essential part of moving a warehouse is that the better you plan the transition, the less it will impact your business and the easier and faster it will be.
You can also operate as you move the warehouse, allowing you to keep making money.
Moving your warehouse in phases can mean moving one warehouse area for each phase, for example, region by region. You can also consider which regions should be a priority.
Ideally, you should plan months ahead of the move date. However, remember that it often takes three to six months from the time the lease is signed to the opening date to relocate the warehouse.
However, it is worth noting that no two businesses are the same, and your process will be different than that of other companies.
So, don’t plan until you have it signed and have a date for the move; then, you can calculate how many days you might need and create a checklist.
Budgeting the Change
It’s vital early on to establish how much you can spend moving your warehouse. Budgeting the move is necessary because buying a new warehouse is most likely the largest expense your business has ever incurred.
If you have spent a large amount of money on the warehouse (and maybe new equipment), you might be getting close to running out of money, and you don’t want to go bankrupt as you move.
If you plan the move poorly, unexpected expenses can cost your company dearly. You have to factor in all the additional costs related to the move.
It is wise to have some leeway in your moving budget as it is not uncommon for costs to exceed what was initially planned. However, you should still try to minimize additional expenses.
Some of the most important things to consider budget-wise when moving are:
- How much can you spend on moving professionals?
- How much can you spend on employee overtime (if you use your employees to help the move)?
- Do you need to pay for any legal documents, fees, or local taxes?
Additionally, you should consider whether you need to slow down operations while you handle the move and whether the business can handle the financial burden.
Division of Labor and Work Schedules
Your workforce may take on additional responsibilities during the move, resulting in overtime pay.
Again, you may have employees split between two locations until the move is complete. If you decide to do this, you need to be organized.
You may hire new employees to help with the move, or some may be temporary employees hired just to help with the move.
Hiring Equipment
You may consider hiring equipment for two different purposes: 1) if you plan to move the warehouse yourself and 2) if you intend to temporarily operate two warehouses simultaneously.
If you handle the move without the help of a moving company, you will need trucks if you don’t already own some.
If you work in two warehouses simultaneously, you may need to hire equipment like forklifts, pallet jacks, and the like so both warehouses can operate and return the rented equipment when the move is complete.
Moving Inventory
Your inventory is the most significant thing you will need to move. As mentioned earlier, it might be wise to move it in phases.
Consider what inventory is the most urgent and complex to move and whether it makes sense to move a specific product category first and others later. This may depend on whether the inventory is static or dynamic.
Furthermore, not all of your inventory will be necessary to move. You may have excess or slow-moving inventory that will not be beneficial to take to the new location.
With such inventory, it is worth considering liquidating or destroying it. This might not be profitable and may incur a loss, but ultimately, it will be better for your business.
Once the inventory arrives in its new location, do a cycle count to ensure nothing is missing. If there is a discrepancy, this must be investigated. Some inventory may have been damaged or lost during the move.
Condition of the Vacated Warehouse
What condition should the old warehouse be left in? If you leased the old warehouse, consult the contract. Do you need to clean it to a certain level? If you leave something broken, could that break the contract?
You will want to meet the agreed criteria to get that deposit back.
Similarly, if you sell the warehouse to a new owner, are there any conditions it must meet? They probably don’t want unusable machinery, equipment, or waste cluttering their new location, which will be a burden to remove.
Communicating the Change
Contact all your partners, stakeholders, investors, vendors, shipping companies, and any other services you work with. Be precise in your communication and state when the location change will occur.
Consider the following:
- The company website.
- Anywhere where the return address is shown for customers.
- Any legal documents or agreements.
- Marketplace account information.
- Is the warehouse location on Google Maps?
- Is the address on marketing documents, such as headed paper?
- Employee email signatures.
- Templates that are often sent to partners containing the address, such as purchase orders (POs).
Your company’s phone number may also change with the address, so remember to communicate that change, too!
Testing the WMS
Do not underestimate the time required to update your WMS (Warehouse Management System) to the new warehouse. The layout will be different, and regions will be in different places.
Testing the WMS ensures no issues before you start handling work. It must be prioritized, or workers will struggle to pick orders and manage the warehouse.
Testing is essential when the WMS is new or using features you had not tried in the previous warehouse.
As we mentioned in Chapters 1 and 4, a fast Internet connection and robust Wi-Fi infrastructure are necessary for using your WMS.
Test the layout and adjust any areas where it doesn’t work. Be mindful of employee feedback, as they may notice things that were not apparent to you when planning the new layout.
Calculating the New Reorder Point
Inventory volume is likely different now. If the warehouse is bigger, you can fit more. Likewise, if you’ve downsized, your inventory volume is likely lower.
Because of this, you need to calculate the new point at which you must reorder inventory from vendors. How empty does the warehouse need to be (also depending on how fast products are selling) before you need to send a PO?
Furthermore, your lead time will also likely be different as the time it takes for vendors to ship POs to you will be different, and the time it takes employees to prepare orders will also likely be different.
Both impact the time to fulfill orders, which will also impact your reorder point.
Analyzing New Shipping Rates
Shipping costs will likely not be the same (unless you moved very close to your current location), and you may start using different shipping partners more often as it is now more convenient.
Your business should have a shipping solution to shop rates so it will not significantly impact your shipping process.
However, higher shipping rates from your new location will impact other business areas, such as product prices.
Additionally, if you rely on 3PL (third-party logistics) services, you may need to examine how the costs may have changed. It may be more appropriate to partner with another 3PL that offers more affordable services for your new location.
Key Points
You’re now ready to move your warehouse! Remember these key points.
- Ensure the new warehouse is shipshape and all permits and regulatory requirements are met before moving to the new location.
- Moving from one warehouse to another is a big task—make it easier by creating a timeframe and a schedule to move more efficiently.
- Many expenses are associated with moving a warehouse that you may not have considered. Don’t let them creep up on you.
- Prioritize setting up the WMS to the new location, calculate the new reorder point, and analyze the new shipping rates.
Where to Go from Here?
You may have finished moving your warehouse from one location to another, but there’s plenty more to consider after you’ve moved!
Read the following blog posts on further optimizing your new warehouse.
- How to Design a Warehouse Layout and Why It’s Important—Covers everything to consider when planning your warehouse layout.
- Best Practices for Optimizing Your Warehouse Layout—Your warehouse layout can always be improved; here’s how.
- The Pros and Cons of 6 Popular E-commerce Warehouse Types—A deep dive into the different e-commerce warehouse types.
- How Much Warehouse Space Does Your E-commerce Business Need?—Determining the right amount of space for your warehouse.
- Warehouse Visualization Technology Leads to Better and More Efficient Workflows—Explains what ‘warehouse visualization’ is and how it can help you build a more efficient warehouse.
- Recognize the Advantages of Multiple Small Warehouses Over One Large One—Is one big warehouse or multiple small warehouses right for your business?