Same Warehouse, But Better: What to Check Before You Relocate

A lease renewal is coming up, order volumes keep climbing, and the aisles feel tighter every peak season. The obvious conclusion is that the warehouse has run out of room, and the obvious next step is to start looking at new sites. This is where the warehouse relocation vs optimisation decision actually gets made, often before anyone has checked whether space is the real problem.

Relocation is sometimes the right decision. It is also expensive, disruptive and hard to reverse, so it deserves the same scrutiny as any other capital decision. In our work with warehouse teams, we regularly find that the building has capacity left to give. The stock profile, the layout, the systems and the processes inside it are using that capacity poorly.

Start With the Question: Is This a Space Problem?

Space pressure shows up in familiar ways: pallets stacked in aisles, overflow storage, pickers walking further each month, congested dock doors at peak. Each symptom can come from too little space. Each can also come from how the space is laid out and used.

Four checks will tell you which before you visit a single site:

• Stock profile. Slow-moving and obsolete SKUs often hold prime pick locations. An inventory optimisation review shows how much floor space that stock occupies and what it costs to keep there.
• Layout and flow. Storage media, aisle widths, pick paths and goods-in areas set for the operation of five years ago constrain today’s volumes. A capacity and layout review tests the current profile against the building.
• A site without a WMS, or with one configured for a previous operation, leaves locations under-used and pick paths longer than they need to be.
• Comparing throughput, storage density and labour productivity with similar operations, using industry data such as the benchmarks published by the UK Warehousing Association, shows whether the site sits at its limit or below it.

Warehouse Relocation vs Optimisation: What the Move Costs

Rent per square foot is one line in a much longer calculation. A cost-to-serve model adds labour availability at the new location, transport to your customer base, fit-out, racking and handling equipment, WMS reconfiguration, dual running during the transition, and exit costs on the existing lease. A lower rate can produce a higher total once those lines are in.

The CFO sees capex and a new lease commitment. The COO sees transition risk to service levels. The MD and CEO see a decision that will shape the network for years. All of them need the options modelled side by side before anyone signs, which is exactly what the warehouse relocation vs optimisation comparison is for.

What Teams Have Done With the Building They Had

A wholesale furniture and giftware supplier, operates from a 300,000 sq ft site in Lancashire. SCCG planned the existing warehouse and its in-build extension together, working around the fixed structures, then assessed capacity against growth plans and proposed KPIs for core picking activities. The client asked SCCG to extend the project scope afterwards.

A Bristol manufacturer and supplier to the café and food service trade, ran wide-aisle pallet racking with a large clear floor area. A collaborative design workshop, CAD layouts and a material flow analysis produced a redesign that accommodated current and projected growth.

When Moving Is the Right Answer

Some sites cannot be improved enough. The structure may limit what you can do, the location may no longer suit where your customers are, or the growth may be permanent and large. In those cases the priority is choosing the right location, which is a network question. Logistics network design models where stock should sit relative to demand and what each option costs to serve. SCCG’s logistics network strategy work for the Salvation Army Trading Company is one example.

A warehouse assessment first keeps that exercise honest. The size and specification of a new site depend on how well the current one is used, and a facility sized around today’s inefficiencies carries them into the next lease.

If the Budget Is Limited

When the budget cannot support a relocation, the practical option is to invest in the building you have. Inventory optimisation, layout redesign, a WMS review and targeted automation each release capacity in stages, and each can be phased while the operation keeps running. The money not spent on a move can fund a network strategy review, so that if relocation becomes necessary later, the decision rests on data about where the site should be and what it needs to hold.

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