Temporary warehouses offer the ideal Just-in-Time manufacturing solution at a time when fluctuating markets dictate that supply chain management needs to be more efficient than ever before.
The manufacturing sector witnessed a disappointing end to the year in 2015. Newly released figures from the Office of National Statistics revealed that production fell significantly during December. The export market too continues to suffer a decline, exacerbated by a strong Pound against the Euro, resulting in its lowest rate since June last year.
This is especially concerning given that the government has set UK exports targets at £1 trillion by 2020; with current UK exports at £515bn this is an ambitious target. In order for the UK export market to realistically achieve these goals and, at the same time, remain competitive both here and abroad, the sector needs to evaluate existing business models as a means to better utilising existing capital and working practices.
‘Just-in-Time’ manufacturing explained
As businesses look for new ways to compete, increasingly popular within the manufacturing sector has been the move away from the traditional so called ‘Just in Case’ production model, which looks to manufacture products in advance of demand, to the ‘Just-in-Time’ (JIT) model.
Pioneered in Japan by Toyota, the central objective of this method is to help manufacturers save on warehouse space and unnecessary costs as a means of improving efficiencies. Implementing a Just-in-Time model allows manufacturers to be reactive, responding to demand much more quickly, but how can manufacturing businesses begin this transition?
This model is a simple and cost-effective proposition for the manufacturing sector. JIT reduces costs by limiting the amount of goods and parts a firm holds in stock. Manufacturers using this model will only produce products on demand, meaning the need to over produce goods is reduced significantly, avoiding a build-up of unsold products and wasted warehouse space.
Additional benefits of this model include increased customer satisfaction, with manufacturers having the ability to produce higher quality goods with greater efficiency. In a sector as volatile as manufacturing, it significantly reduces the likelihood of stock perishing, or remaining unsold, thus keeping stock holding costs to a minimum.
Temporary warehouses are flexible and cost-effective
However, there is still a requirement for additional warehousing during periods of demand, for example, when storing components in order to produce to order goods on demand ready for Just-in-Time exporting. In order to manage this effectively, warehouse managers need to plan and prepare for a number of possibilities.
For a variety of reasons, warehouses can and do run out of space, this could be due to rapid growth, unforeseen seasonal demand, a decline in sales or inventory build-up to meet demand during manufacturing shutdown. By increasing warehouse capabilities, warehouse managers will be better equipped at handling change, therefore reducing waste, improving productivity and ultimately increasing profits.
Taking this into consideration, how can warehouse managers make better use of storage capabilities to ensure they are equipped to handle such fluctuations? The use of a temporary warehouse is one of the most viable and cost-effective solutions to manage such changes.
By utilising temporary warehouses, which can be installed and taken down often in a matter of weeks, manufacturers can remain reactive to the demands of their customers, making it a truly cost-effective option over permanent extension options. A temporary warehouse can be installed quickly, reducing the need to rent out unnecessary warehouse space, with the anticipation it may be needed in the future.
The ability to install a temporary warehouse during periods of high demand means manufacturers can store components for more intense production runs only when needed, resulting in a reduction in rental costs and improved utilisation of space. The flexibility and cost-effectiveness of using a temporary building allows manufacturers to plan for fluctuations in supply and demand.
Husqvarna benefit from temporary warehouse
Spaciotempo has helped a number of manufacturers implement successful temporary warehouse solutions, our work with Husqvarna, a manufacturer of high specification gardening tools is a great example to other manufacturers regarding the use of a temporary warehouse to manage exports more effectively. The business has successfully utilised the benefits of a Just-in-Time model, with the use of a temporary warehouse, and is now enjoying significant benefits as a result.
Using temporary warehousing, the company has been able to respond to a surge in demand from the export market, with 99% of assembled products now being sent to export. The company has subsequently been able to react quickly to this demand, creating quick and additional space to store components ready for manufacture, before moving products immediately from the production line, out to export.
If the government’s target of £1 trillion worth of UK exports by 2020 is to become a reality, then more efficient warehousing and storage needs to be taken into account. The export market is set to evolve over the next few months in ever more unpredictable ways. Those manufacturers prepared for fluctuations in demand will be best placed to grow as the market does, and a temporary warehouse provides the scope to make this a reality.
Speak to us today about your temporary warehouse needs.