"For those of you that made the decision to run your own warehouse in lieu of utilizing commercial vendors, would you be willing to share your experiences (good or bad)?"

Deb:

When I was working for CompUSA in Dallas, we made exactly this decision to remove our boxes from our storage vendor (who shall remain nameless but it isn't who you are thinking of).  The company at the time had office space that we renovated to use as a warehouse.  It wasn't your typical warehouse but it worked.  We purchased racking, O'Neil software, 2 PDTs, a PC, Zebra printer, and leased a van.  Our storage at the time was over 100,000 cartons.

The biggest issue was dealing with the vendor who was reluctant to give us our cartons as fast as we wanted them.  So, even though we wanted them as quickly as possible, they would only provide 180 per day.  That delayed us in realizing our ROI and payoff, but it was still worth it.  The project was going to pay for itself in a little over 2 years and would have realized a savings in the mid six figures after 5 years.  The only problem was I got laid off in the middle of the project and then the company went out of business.  Who would of thought?!

Some things to consider include the cost to permanently withdraw your boxes.  As we all know, dreaded "hostage fees" loom over any potential withdrawal.  Also something to consider is the sheer grunt work required to do the move.  For my project, all of the work was done by me and one Warehouse Coordinator.  Every day we drove to the vendor, picked up our boxes, and scanned them into our warehouse.  Since we were using a van and the building we were moving to didn't have a dock, we needed to make multiple trips and there was a lot of physical work involved.  And doing that in the Texas summer heat was no easy accomplishment but we did it.

I think oftentimes when boxes are being managed by a vendor, they are out of site out of mind.  Bringing all of our boxes in house provided us a unique opportunity to clean up our storage and inventory many boxes that were previously unidentified.  Also consider whether or not your service level will be affected by bringing everything in house.  Will it be better or worse?  For us it was better.  The greater the activity there is with your cartons, the more work there will be going forward, but the benefit of having them in house is greater.

I am hoping to lead my current company down a similar path since we own all of our warehouse space.  I have some of the spreadsheets I created to track project progress and I will be happy to share with your or speak in more detail about the project offline.

Thanks, Steve

Stephen A. Smith, MLIS, CRM, CDIA+
Records Manager
QVC, Inc.  Internal Audit
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