The success of your supply chain depends on selecting an appropriate warehouse provider. Selecting the wrong options will only lead to project setbacks, inaccuracies, and added costs, which will harm your profitability.
When evaluating a warehouse provider, your focus should be on their experience, reputation, operational efficiency, and openness to innovation.
We explain these core points further to help set you up for success.
1. Evaluate Their Experience
Even if a warehouse provider has been around for a while, it doesn’t mean they’re the right fit for your business. You need someone who understands your specific needs, not just a company with a long history.
Industry Specificity
Ensure they understand how to handle your products. For example:
- Can they maintain cold temperatures, or do they have experience with temperature-sensitive goods?
- Do they have the right equipment or machinery for storing bulky items?
- Are they following the right safety rules for things like food storage or hazardous materials?
Order Volume Handling
Think about your current and future business needs. Ask questions like:
- Can they handle your current order volume without delays?
- Can they manage varying order sizes, whether you send out 10 boxes or 10,000?
- Will they be able to keep up during peak seasons, or if demand suddenly increases?
- Do they have the space, systems, and staff to grow with your business?
Integration Capabilities
Check if they have the technology that aligns with your systems. For instance:
- Can they connect to your online store (like Shopify) or inventory systems?
- Do they support real-time tracking and inventory updates?
2. Assess Their Reputation
It’s easy for a warehouse partner to sound impressive on paper, but you need actual proof before you trust them with your business. To avoid surprises, dig deeper into their reputation, not just what’s on their website.
Client Testimonials
Be cautious if all reviews sound the same or are too general. These might be red flags. Instead, ask for real references from current clients. Then, check in about:
- How accurate are their deliveries?
- Do they communicate well and fix problems fast?
- Are they flexible when things change?
Online Reviews and Industry Feedback
Check out Google Reviews, Trustpilot, or industry forums. Look for patterns like:
- Do multiple reviews mention late deliveries or poor service?
- Is the feedback positive overall and consistent?
Market Research
See how they stack up against competitors:
- Look at their warehouse location and proximity to ports and airports.
- Verify certifications, like ISO or industry awards. Effective Logistics, for example, operates a Biosecurity Class 2.2-rated facility in Melbourne with government approvals.
3. Review Their Operational Efficiency
A warehouse might look good from the outside, but what truly matters is how well it runs on the inside. You want a provider that’s organised, accurate, and fast, especially when your customers are waiting.
Warehouse Management System (WMS)
A strong WMS ensures smooth operations. At Effective Logistics, for instance, their WMS includes detailed tracking, allowing clients to monitor their stock and order status at any time.
During evaluation, ask if your provider’s system includes:
- Shared dashboard access
- Real-time inventory tracking
- Automated reordering
- Accurate order processing
Inventory Accuracy and Audits
Good warehouses run regular checks. Some important questions to ask include:
- How often do they count stock (cycle counts)?
- What’s their typical accuracy rate?
- How do they fix errors between records and actual stock?
Order Fulfilment and Shipping
Focus on these aspects:
- Picking and packing accuracy: Precision in picking and packing is essential. Mistakes only lead to delays and dissatisfied customers.
- Fast fulfilment and on-time delivery: Reliable warehouses often achieve fulfilment rates above 97%.
Security and Contingency Planning
A good warehouse should have effective security systems. These include:
- 24/7 CCTV monitoring
- Access control measures
- Alarm systems and other forms of physical security
- Cybersecurity protocols for data protection
- Backup plans and safety measures to address power failures, disasters, and other disruptions
4. Look for Signs of Continuous Improvement
A great warehouse partner doesn’t just stick to what works. They keep getting better. Look for signs that they’re keen on improving how they operate.
Regular Warehouse Audits
Ask if they run regular checks on their operations:
- Do they do internal or third-party audits?
- What do they do with the results? Do they make changes?
Process Review and Optimisation
In logistics, what worked last year might not work today. That’s why you should choose a warehouse partner that doesn’t just “set and forget” their systems.
You want a team that regularly reviews how things are done and looks for smarter, faster ways to do them.
- Ask how often they check and update their workflows. Frequent reviews mean they’re paying attention to minor issues before they become serious problems.
- Ask for real-life examples. For instance, a provider may regularly update its picking and packing methods to reduce order errors. They may also switch to more efficient racking systems to save time on item retrieval.
Openness to Innovation
A smart warehouse provider committed to innovation helps future-proof your supply chain and keeps your business competitive. If they actively adopt new technology and automation, overall operations become faster, safer, and more reliable.
Here are some examples to look for and assess:
- Are they using artificial intelligence (AI) to predict product demand, optimise inventory levels, or plan the most efficient picking routes?
- Do they utilise autonomous mobile robots (AMRs) to move products within the warehouse, reducing worker fatigue and errors?
- Do they use drones to scan inventory for quick and accurate counts?
- Are there real-time tracking systems to keep you updated on your stock and orders?
Think Long Term When Choosing a Warehouse Provider
Choosing a warehouse provider isn’t just about finding the cheapest option. It’s about finding the right fit.
Take the time to look at their experience, check their reputation, review how efficiently they operate, and see if they’re always looking to improve. These things matter for long-term business success.
Also, doing your homework now helps you avoid costly mistakes later. Use this checklist as your guide every time you vet warehouse partners. If you want a trusted partner who ticks all these boxes, contact us at 03 8376 3300 or visit our contact page to discuss your warehousing needs.
