Most warehouse problems aren’t warehouse problems at all

I’ve been having a lot of conversations about warehouses recently and the news that Amazon will start providing fulfilment services to clients outside the Fulfilled by Amazon (FBA) network has come at an interesting time.

So why are so many retailers talking about warehousing?

It’s not a simple answer, but there is a clear pattern emerging.

Of the ten fast-scaling businesses I’ve spoken to over the past six weeks, all of them feel their current warehouse arrangements are having a commercial impact and, if left unchecked, will hamper growth over the next twelve months.

That shows up in different guises. For some, it’s an underwhelming service proposition compared to competitors. For others, intake speeds are reducing the ability to bring newness to customers quickly and impacting availability. Some are working with contractual arrangements that no longer fit the needs of the business. Others are seeing fulfilment costs that have not evolved with growth or systems that are struggling to support increasing complexity.

On the face of it, these all look like warehouse problems but, in many cases, they aren’t.

Of the ten businesses I spoke to, six were ultimately dealing with issues that started much earlier in the operating model. The warehouse had simply become the point where those problems became visible. This is incredibly common in growing businesses.

In the early stages, workarounds often take the place of process. At lower volumes, those workarounds can be managed. Teams know where the exceptions are and how to navigate them.

But growth creates complexity. Volumes increase, product ranges broaden, sales channels multiply, international opportunities emerge. The workarounds that once supported growth begin to break down.

The warehouse is often where the consequences appear because that’s where products, inventory and orders physically come together. Things get delayed, costs rise and service levels suffer but the root cause is frequently elsewhere.

I’ve seen businesses blame warehousing when the real issue was forecasting. Others were struggling with stock policies, inbound planning, commercial decisions that created unnecessary complexity or contracts that no longer reflected operational reality.

The warehouse wasn’t causing the problem, it was revealing it. The instinctive response for many leadership teams is to change something in the warehouse operation.

In my sample, six businesses were seriously considering changing their 3PL, team or location. Two were exploring bringing fulfilment in-house and others were considering overflow facilities or international operations to alleviate pressure.

Sometimes those changes are absolutely the right decision. But changing the operating model doesn’t automatically solve the underlying issue.

One of the most common questions I get asked is about the pros and cons of different fulfilment models: in-house versus outsourced, open book versus closed book.

The reality is that different models suit different business requirements. They don’t solve root cause issues on their own.

A closed book model won’t solve a cost problem if underlying processes remain unchanged. Instead, businesses often see additional charges for activities that weren’t originally scoped or find the cost of poor process becoming embedded in the operation.

Likewise, bringing fulfilment in-house won’t automatically solve a service issue if the challenges sit elsewhere in the business. It can simply move the problem onto the balance sheet.

This is where Amazon’s move becomes particularly interesting.

Most of the discussion will understandably focus on Amazon’s scale, technology and fulfilment capability, but what interests me most is the discipline behind the model.

Amazon’s ease of implementation, system set up and pace of change will undoubtedly appeal to many retailers. As the complexity and number of sales channels continues to increase, those capabilities become even more attractive.

However, highly efficient operations rely on consistency. Retailers carrying unnecessary complexity, weak processes or poor quality data may find those issues exposed much more quickly.

That doesn’t mean traditional 3PLs should be worried. There will always be a place for great service, strong partnerships and specialist expertise. Amazon’s entry should encourage retailers to look beyond the warehouse itself and ask whether the problems they are trying to solve really start there.

Before embarking on a warehouse transformation, I would encourage leaders to ask a few simple questions:

• Is the warehouse causing the problem, or is it simply where the problem becomes visible?
• Are costs rising because of volume, complexity, process or contract structure?
• Is the current 3PL failing, or is the operating model no longer fit for purpose?
• Would bringing fulfilment in-house solve the issue, or simply move it elsewhere?
• What does the business need its warehouse to support over the next 12 to 24 months?

Ultimately, the most successful warehouse transformations don’t start with a warehouse. They start with an honest assessment of what’s really driving the challenge because, more often than not, warehouse problems aren’t warehouse problems at all.

Bio

Becky Lombardo is an International Logistics Expert with over 20 years of experience working with some of the world’s most recognisable retail brands across luxury, fashion, beauty, homewear, wellness and food including Harvey Nichols, Fortnum & Mason, ASOS, Dunelm, and Matchesfashion.

As the founder of Londra Consulting, Becky specialises in helping businesses navigate the complex, fast-evolving landscape of global ecom and omnichannel logistics. She has worked across every major fulfilment model, from direct-to-consumer and drop ship to concessions and rental, giving her a uniquely broad perspective.

Becky’s career spans key global markets including the UK, US, EU, Far East, and the Middle East. She has led the development and implementation of transformative logistics strategies tailored to the needs of each region, helping brands scale, adapt, and stay competitive in times of rapid change.

Londra Consulting: www.londraconsulting.com

Becky Lombardo LinkedIn: linkedin.com/in/beckylombardo