Setting Up A Distribution Centre In The UK

Distribution centres are the lifeblood of the supply chain. With Ecommerce set to grow to 23% of the entire retail sector by 2023, it’s likely you’ve been considering setting up a distribution centre in the UK to expand your business.

Aside from being a storage centre for products, warehouses are also a place where products are inspected, organised, packed and packaged for delivery. The environment of a warehouse also has complex health and safety factors to consider, to ensure the safety of all those who use it.

As the provider of commercial shelving units in the UK, we will be lifting the lid on the advantages of setting up a distribution centre in today’s post. Plus some of the tops points you need to look out for.

When calculating the size of the warehouse you need in relation to your stock size, the maximum amount of space should be given for operational storage and stock processing purposes. On the contrary, aspects such as offices, working areas and empty pallet storage areas should get the minimum amount of space.

A good rule of thumb is to calculate the complete square footage of your warehouse. Then, minus the amount of square footage that is used for non-storage purposes. The amount you have left is how much storage capacity your warehouse has.

Typically, this amounts to 80% of the total space being usable storage space, since warehouses have an extremely efficient layout. The other 20% would be comprised of the non-essential areas. So if you bought a warehouse that was 100,000 square foot, you can expect to get around 80,000 square foot of usable space based on this theory.

No two warehouses are the same. Even within one warehouse, it’s possible to find thousands of different products that each have different sizes and weights. Some products also may have a short lifespan meaning they need to be moved on quicker (i.e perishable food) versus items that can sit there for months. All of which requires flexible racking capabilities.

You also need to consider the quality of the racks, seen as they’ll be required to consistently perform. This matters because racks that are made from poor materials, cannot be adapted to your needs or waste space will inhibit the overall performance of your distribution centre. So it’s important to select the right racking capabilities in relation to your specification requirements before you start to load products on them.

As you might expect, the way in which distribution centres must be built and maintained is heavily regulated in the UK. The HSE has provided several free guides on warehouse safety that are worth reading. Skimping on safety isn’t just illegal but will actually cost your business more money in the long run due to employee time off work, not to mention potential legal action. So it’s something that every distribution centre absolutely has to get right the first time.

Some of the top areas to consider relate to manual handling, working at height, vehicles in and around the warehouse and moving or falling objects. Also, storage areas must be properly designed and marked. The layout must not involve tight corners, awkwardly placed doors or uneven changes of gradients.

Putting safety at the forefront of your distribution centre is going to maximise your efforts to grow your business. If your employees feel safe in their environment, then this will contribute to a better job satisfaction, which ultimately affects every link within your supply chain.

As a business owner, you might be wondering whether setting up a distribution centre is right for you. While setting up a distribution centre is a big investment, it’s going to dramatically expand your business’s capabilities.

Without a distribution centre, you will be severely limited to the amount of stock you can carry at any one time. This is probably the reason why you’ve been considering expansion in the first place. However, a distribution centre will also benefit your business in the following ways:

Regardless of what your business is about – you must have an effective inventory system. If you don’t have your own distribution centre, then you could be left waiting for weeks for different items, which then holds up the job. It’s also difficult to keep track of the items you need to order if the process isn’t centralised.

If you’re currently hiring space in several different warehouses then this can get very expensive, since you won’t be being charged the actual cost but with a profit margin included for the owner. Add in the cost of equipment for each different warehouse, and your total spend can soon become astronomical.

Centralised distribution centres also allow for cheaper shipping costs, since you can order in larger quantities because you’ll now have the capacity to store more items at once. You then have the option of passing these savings onto your customers, which can help make your business more competitive.

When everything is happening under one roof, it’s a lot easier to control different processes. In turn, you can make your business more efficient as systems don’t have to be adapted depending on each location. This not only benefits your employees but your customers too, as the items they need can be located and sent out to them much faster.

The above is just a snapshot of some of the aspects you need to consider when setting up a distribution centre in the UK. In truth, it’s a mammoth operation though one which will greatly expand your business operations as a result.

If you need any help or advice on anything we’ve mentioned above you’re in the right place. Get in touch on 0115 939 7572 with your project enquiry and we’ll be in touch.
Also, be sure to check out our Unirack warehouse shelving brochure for all your warehouse needs.