Before Brexit and Covid, we lived in a world of Just in Time (JIT) stockholding. However, with Brexit now resulting in the slower movement of goods and the pandemic meaning fewer workers to help move them, companies are having to increase their stock levels to be able to cope with shortages and interruptions in their supply chains.
This has meant they require additional storage. The options are either to move to bigger premises or make the most of what they have by building mezzanine floors. Bigger premises mean higher rent, but mezzanines open up far more cost-effective possibilities.
With further future disruption foreseeable in the wake of trade wars, climate change, extreme weather, terrorism, political upheaval and cyberattacks, it has never been more important for companies to be able to hold enough stock to meet demand and wring the maximum value out of their space.
The advantage of JIT has proven its worth for decades: raw materials and components are ordered only when they are needed to fulfil customer orders, so reducing inventory spend and freeing capital up rather than tying it up in stockholding. Companies can reduce waste and cut down on manufacturing costs.
Recently, however, we have seen tariff wars between the US and China, escalating materials costs, worldwide disruption caused by the closure of the Suez Canal and cyberattacks that have disabled companies for weeks after hackers have run riot through supply chains. The 2020 SolarWinds cyberattack, for example, compromised 18,000 companies as well as US government agencies.
It is not surprising, then, that the dramatic impact of Brexit and Covid have been a wake-up call. In the words of the Financial Times: “Highly indebted companies, working from lean inventory, supported by just-in-time supply chains and staffed by short-term contractors, have borne the brunt of the sudden blow. They will now suffer the rolling, longer-term impact of its unpredictable consequences … companies must transform their supply chains from ‘Just in Time’ to ‘Just in Case’ models.”
Companies opting for a Just in Case (JIC) model hold large inventories to reduce the risk of fluctuating supply and demand. Customers and the business do not need to wait in frustration for their order to arrive. JIC can be a buffer against uncertainty, but the costs in terms of renting more space – either adding a new company warehouse or satellite distribution centre – can be considerable.
In practice, the way forward is likely to be a combination of JIT and JIC to make sure customers do not go elsewhere for key products. Either way this will result in the need for greater stockholding and storage.
The answer is to install a mezzanine floor to achieve the extra space a business needs, without the expense and inconvenience of relocating. A mezzanine floor can double usable space, and can be engineered to take any load.
There are a wide variety of designs and bespoke mezzanine solutions available for the flexibility, durability and safety to fit each company’s requirements, from robot-ready flooring systems to the stringent demands of medical facilities.
Hi-Level Mezzanines provides mezzanine floors of the highest quality in the industry, yet remaining competitively priced thanks to the expertise of our team of qualified structural engineers, innovative digital design process and advanced solutions.
For 30 years we have been creating space for amazing things to happen.
For more information on how to optimise your space with a mezzanine solution, please contact us at [email protected] or call 01730 237 190.