The sharing economy has disrupted many businesses, such as transportation (Uber, Lyft) and hospitality (Airbnb). One innovation that has recently caught people’s attention is shared storage spaces, which are now common in the warehousing industry. The demand for e-commerce remains high, and supply chains continue to grow complexly; therefore, enterprises require flexible alternatives to meet their storage and distribution needs at a low cost.
CoFlex offers coworking space in Calgary and shared warehouse options. Shared warehouses, also known as on-demand or flexible warehousing, allow multiple organizations to store their products in one place by dividing space and resources among them.
This model differs from traditional methods, where firms buy or lease whole buildings to store their products. Shared warehouses offer a flexible alternative, empowering companies to rent any amount they need for any duration, giving them full control over their storage and distribution decisions.
Reasons Behind The Surge Of Shared Warehouses
Several factors have led to increased shared warehouse spaces, making them ideal for all types of businesses, such as
- E-commerce Boom And Omnichannel Retailing
The rise of e-commerce has stretched supply chain networks thin. Customers want their items delivered faster than ever, so companies must situate themselves closer to cities where most people live. Shared warehouses offer convenience at scale because they allow firms to quickly enter different areas without signing long-term agreements or investing heavily in property acquisition.
- Fluctuations In Seasonal Demand
Some sectors, such as retail, experience huge variations in sales volume depending on the time of year. Hence, they may find themselves with too much space when nobody buys anything, leading to inefficient resource use under normal warehousing arrangements. However, shared storage facilities enable businesses to adjust capacity according to seasonal requirements, thereby optimizing efficiency while cutting down costs.
- Supply Chain Agility And Flexibility
Currently, business success depends on how fast one can adapt their organization’s operations strategies vis-à-vis prevailing market conditions like new product launches, among others, due to changes in customer preferences. In addition, enterprises must respond promptly to shifts in demand patterns brought about by different factors, as these shared warehouses provide the much-needed flexibility that can help companies evaluate their supply chains without being tied down by long-term contracts.
- Savings On Costs And Streamlining Operations
Compared with traditional warehousing models, public storages save a lot of money. Companies can cut costs by sharing facilities and other resources, reducing the overall cost of renting space. Furthermore, such places usually utilize sophisticated technology like robotics, making work easier while increasing efficiency and saving labor expenses.
How Shared Warehouses Work
The ‘pay-as-you-go’ model is used in shared storage services where organizations only pay for what they use when needed. Below is a step-by-step guide to how shared warehouses operate:
- Booking Space—Shared warehouse providers may be contacted directly, or reservations may be made via online platforms. Businesses must indicate the amount of space required, the preferred location, and the period within which it will be needed.
- Receiving And Managing Stock—Once booking has been done, goods are shipped into this common facility, where they undergo intake by a service provider who also stores them until they are ready for use; all these activities rely on warehouse management systems (WMS) coupled with inventory tracking technologies that are more advanced than those found in private storages.
- Order Picking And Delivery—A shared warehouse provider picks, packs, and ships the products to their final destination once an order is placed. Many providers offer value-added services like kitting, labeling, or returns processing, which streamline the fulfillment process.
- Scalability And Flexibility – Businesses can easily adjust their warehousing space needs with demand fluctuations, scaling up or down as required. This allows enterprises to optimize inventory levels to avoid costly overages or shortages.
Advantages Of Shared Warehouse Spaces
The shared warehousing model has several benefits for businesses, such as:
- Cost Savings—Compared to traditional models, companies can significantly reduce their warehousing costs by sharing resources and overheads; these savings can then be reinvested into other business areas like product development, marketing, etc.
- Scalability and Flexibility – As mentioned earlier, quickly scaling warehouse space up or down based on demand is a game-changer for businesses. It enables them to respond rapidly to market changes without being tied down by long-term commitments and excess capacity.
- Better Logistics & Distribution—Shared warehouses are usually located near major transportation hubs and population centers, which means they have better access to end consumers. This reduces delivery times while also enhancing the overall customer experience through improved logistics.
- Access To Cutting-Edge Technologies—Most shared warehouses invest in advanced technology solutions such as automation systems, robotic systems, and sophisticated warehouse management systems (WMS). These technologies can boost operational efficiency, cut labor costs significantly, and improve inventory accuracy rates.
- Sustainability And Resource Optimization—Shared warehousing spaces help promote sustainability within supply chains by optimizing resource utilization, thus reducing the need for additional warehouse construction. Through sharing space and resources, companies can minimize their environmental footprints, contributing to achieving more sustainable supply chain operations.
Challenges & Considerations
However, despite offering numerous benefits, there exist specific challenges/considerations associated with using shared warehouse spaces:
- Security & Data Privacy—When sharing warehousing facilities with multiple companies, security becomes a key issue. Businesses should ensure that they protect their inventories and sensitive information by implementing appropriate safeguards and strong security measures.
- Operational Coordination—Coordinating operations among different firms operating out of one facility can be quite difficult. To this end, clear communication channels must be established, along with well-defined processes coupled with effective inventory management systems, so that conflicts can be avoided and disruptions minimized.
- Compliance Requirements—Certain industries, such as food and beverage and pharmaceuticals, have specific regulatory requirements regarding storage or warehousing. Shared warehouse providers, therefore, need to comply with such regulations by providing the necessary infrastructure and implementing required procedures/processes aligned with relevant industry standards.
- Integration With Existing Supply Chain Systems – Integrating shared warehousing operations into existing supply chain systems/processes may prove complex. For everything to run smoothly, there must be seamless data exchange between different parties involved backed up by compatibility between various technologies being used and workflows adopted by these organizations.
The Future of Shared Warehouse Spaces
As the sharing economy continues disrupting traditional business models, shared warehouse spaces will become vital components in logistics management going forward. Given the ongoing growth of the e-commerce sector, there is likely to be increased demand for flexible/scalable warehousing solutions.
In addition, developing technologies such as robotics, automation, and the Internet of Things (IoT) is expected to increase shared warehouse capabilities and efficiency. Commonly used features will include real-time tracking of goods in stock, predictive analysis tools, and automatic order fulfillment systems, saving companies time and allowing them to optimize their work while giving customers a more satisfying experience.
We offer innovators and entrepreneurs a convenient, professional, and comfortable shared office space in Calgary to conduct business operations, conduct client engagements, and collaborate with their teams. For details about our venue and shared warehouse options, please call CoFlex at (587) 327-7797. You can also book a tour or handpick a space perfect for your needs through this online form.
