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Is it Necessary to Store in Istanbul?

Again, I can answer this question with a very assertive sentence such as “If I am the supply chain or logistics manager or owner of a manufacturer, seller, importer, wholesaler, etc. company, I would not store in Istanbul and in the very close geography of Istanbul!”.

There may be objections such as, “No way, most of the consumption is in this region”, “No way, imports and exports are highest here”, “No way, this is the center of industry”.

Like many “Old School” and “dinosaur” people, I (would) make these objections. Because the “classical” basic teaching for the geographical location of the warehouse or storage location is to be associated with “proximity (distance, time)” to production or to the customer (consumer) or, if possible, to both.

On the other hand, today’s “classical” teachings may need to be replaced by a “different” or even “radical” approach.

My assertion for years that “there will be a storage space supply problem, there will be no storage space available”, I wish I was wrong, has come true these days, and it also seems that the increase in land and construction costs to produce new storage space (m2) by at least 2.5-3 times in the last 3 years will further exacerbate this supply problem. The fact that the existing storage areas are not “Class A” for construction and have operational difficulties should also be evaluated.

In addition to the problem of “supply” in terms of quality and quantity that I mentioned above, unfortunately, my claim that “there will be no personnel to work in the warehouses”, which I have been voicing for years, has turned into a reality, and the efforts to solve the problem of storage space are turning into a complete tangle.

So what will happen? How will the problem be solved?

For a sustainable solution in the short term, the “gray storage” concept developed by DepOrtak as a “different” or post-modern approach I mentioned above may be the solution.

Another post-modern approach is to do a very accurate ABC Analysis, and on the basis of both “material” and “number of orders” keep Group A products in a smaller m2 storage area in Istanbul, and the rest of the products, for example Group C and even Group B products and/or packaging & For auxiliary materials such as packaging, storage in different geographies where “human resources” can be found more easily than in Istanbul, where the employee turnover rate can be very low, where the costs related to human resources can be very low, where the cost of land can be low, where there are suitable (solid, safe) lands against earthquakes, and where road transportation with Istanbul can be fast and easy can be preferred and storage can be made in these different geographies.

In the medium or even distant term, it seems that there will be no improvement in the “return load” from production in Turkey. If this continues, there will be a flow of goods from Istanbul to the eastern provinces and unfortunately, there will not be enough return cargo from the eastern provinces to Istanbul. Thanks to the storage in different geographies instead of Istanbul, the “return load” problem may be solved to some extent with the transportation from warehouses to Istanbul.

NOTE: I do not want to name such geographies and raise land prices 😊

Author: Oruç Kaya