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Public refrigerated warehouse services unfreeze your assets, boost productivity.

Ask your chief financial officer. You'll get the same answer every time. In order to remain competitive in the 1990s you have to cut down fixed expenses, control labor costs, keep distribution flexible and direct capital into those areas that make money.

It's called concentrating on your core business: maintaining quality ... cutting costs... combining stocks and redirecting secondary functions to third party contacts.

Product development, aggressive marketing and modernization offer the highest return on investment. Storing product is an expense. But the smart ways to minimize those costs are the same ways to maximize your return. And they don't involve investing in one concrete block, one panel of insulation or one trowel of mortar.

What is the easiest way to maximize returns? Take the fullest advantage of all of the services public refrigerated warehouses (PRWs) offer.

In order to succeed in the '90s, the international cold storage warehousing industry has had to become competitive too. Just like every other smart business that has changed with the times, today's PRW is a very different sort of facility from what it was even five years ago -- when almost all customers could expect was the safe storage of product with the addition of rail receiving and blast freezing at some facilities.

Today we're part of an international network that can help you do the following: manage inventory; provide quick, efficient, cost effective distribution; improve scheduling logistics; control labor costs and help clients cope with regulatory compliance.

Many PRWs offer a full menu of related services including just-in-time delivery, on-site processing, IQF freezing, electronic data interchange, customized distribution, inspection service, packing, freight consolidation, cross-docking and store-door delivery.

Today's smartest food processors, manufacturers and distributors have passed on the large investments for cold storage warehouses, relieving themselves of unnecessary cash outlays.

As an industry, international cold storage warehousing has met this challenge head on -- and once these new warehouses were in place, has expanded the service opportunities to provide enhancements all across the board. Moreover, by displacing responsibility and care to a third party that has the initiative and incentive to offer expert services to their customers, these manufacturers and distributors have made the public warehouse a controllable expense and an area of flexibility that may not have been an option in an in-house processing environment.

Further, by taking advantage of public warehousing's ability to supply inter-related logistics, cold storage and transportation services, many larger manufacturers are able to reduce the high investment in bureaucracy that often accompanies in-house operations.

Networking Advantages

Existing partnerships with retailers make the PRW network even more valuable than ever before. With consolidated, pooled distribution on a weekly schedule, many PRWs not only satisfy their primary customers' needs, but the requirements of their customers' customers as well -- all at substantial savings over stand-alone efforts.

Recognizing that a company's success does not occur in a vacuum, PRWs have been active in facilitating the sense of partnership that can exist between manufacturers and retailers. Often PRW customers lease space not to food processors for packing or custom repackaging, but to their suppliers as well. This brings a variety of economies onto the scene -- including, but certainly not limited to, incredibly fast turn-around time. In fact, in an effort to foster the kind of vertical integration that can generate substantial savings, many PRWs join the partnership by building coldstores for their clients under long-term contracts or by managing leased properties for them.

As marketing and production becomes an increasingly global enterprise, the cost-effectiveness of teamwork with PRWs all over the world has been consistently demonstrated. Needless to say, savings on power costs and maintenance expenses are also a substantial benefit of this kind of partnership package.

Today's PRWs can handle the multiple layers of import/export requirements with ease. Time consuming inspections, approvals, applications and associated paperwork no longer have to be in-house chores.

During this decade the single most expensive component of any manufacturing process is expected to be labor costs and the associated problems of employee turnover, labor negotiations, overhead costs, benefits and federally mandated regulations. These costs are significantly reduced when using public refrigerated warehouses if only because they are spread over many customers. Collective cost sharing allows everyone to benefit.

When one adds in controlled distribution and warehousing costs gained through negotiated rates, the bottom line must benefit. By administering rates, you achieve projectable, fixed costs. Shared warehousing is, simply put, less expensive than going it alone. Rent and taxes are a 50% cost increment and, depending on prevailing local rates, labor should be about 25%.

With these tangible new controls in place -- linked to strategic alliances with support services that allow you to concentrate on what you do best -- high comfort levels can be met.

IARW members employ personnel who have the skills and resources at hand to provide maximum protection for your product. Training is provided by the Association and its research and education arm, the Refrigeration Research Foundation. The latter has been generating comprehensive scientific information on food commodity storage for the past 50 years.

The PRW professionals can handle the maze of state and federal regulatory compliance burdens. But liability concerns are not merely paperwork issues. Sanitation requirements demand constant controls to assure total protection against contamination. The "public" aspect of PRWs is the customer's assurance that his product is protected.

Send For R.O.I. Kit

Touche Ross & Co., a respected certified public accounting firm, has prepared an easy-to-use kit designed to help companies evaluate whether their refrigerated warehouse needs can best be met through the use of public warehouse facilities or through investing their own resources in private space and the personnel and equipment it will take to service it. To obtain a ROI kit free of charge, as well as a director of IARW members and their services, contact: J. William Hudson, president, 7315 Wisconsin Avenue, #1200N, Bethesda, Maryland 20814 USA; phone (301) 652-5674; fax (301) 652-7269.
COPYRIGHT 1993 E.W. Williams Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Laughon, Frank Jr.
Publication:Quick Frozen Foods International
Date:Apr 1, 1993
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