3 Benefits of Consolidating Warehouse Operations

Richmond Park New Development in Cape Town by Atterbury Property

An artist impression of the new premium mixed-use development Richmond Park by Atterbury along the N7  in Cape Town. Tenants and logistics operators are increasingly finding value in consolidating their operations, with similar trends evident in the Gauteng property market.

 

Companies are under greater pressure than ever before to be more efficient, lean and agile in order to remain competitive and sustainable. Consolidation is a popular strategy which has gained significant momentum in the industrial real estate market in South Africa. The trend is particularly evident among companies seek to rationalize their existing footprint of activities or address disruptive trends such as e-commerce or last mile delivery.

Here are some general benefits of warehouse consolidation to owners and occupiers in the Cape Town industrial real estate market:

1. Significant Improvements in Overall Efficiency

Companies who prefer a hands-on approach to operations generally benefit from greater overall efficiency when combining their various activities under one roof. One example is automation specialist Somfy Group, who consolidated their office and outsourced warehouse activities into a single property in Airport Industria. The company noted a significant reduction in stock losses, as well as turnaround time in deliveries and collections. Inefficient processes associated with outsourced warehouse operations are also eliminated, which results in a better overall management of the product. Read more about Somfy Group’s Warehouse Consolidation Strategy by clicking here.

2. Better Customer Service

Customer driven objectives are also key motivators of warehouse consolidation. Companies who wish to improve their overall service offering and client experience benefit significantly from having their office and fulfillment center in the same location. Premium retailer Absolute Pets consolidated their office and warehouse activities by investing into a new property in Paardein Eiland. With the objective of being closer to storage and product distribution, the new property had to incorporate a premium office environment that will satisfy both logistical and staffing requirements.  Read more about the Warehouse Consolidation Strategy for Absolute Pets by clicking here.

3. Reduced Overhead Costs

Given the rising demand in occupiers seeking ways to consolidate their activities, developers and landlords have responded with innovative new property developments. Across the board, new developments catering to the consolidation trend not only offer premium amenities, but also significant savings in the form of innovative green efficiencies. Atterbury is one such developer leading the trend, evident in the successful Waterfall Business Estate in Johannesburg and their upcoming Richmond Park in Cape Town’s Western Seaboard. See more new developments addressing the consolidation trend by clicking here.

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