Why Use a Warehouse?

A Link in Supply Chain

Any business that deals in large quantities and wide varieties of goods will need to find and implement ways of reducing costs of shipment of those goods and of ensuring that business is not lost due to unnecessary shortages. These sorts of logistical concerns are dealt with in part through a warehousing system that serves as a crucial link between the manufacturing or acquisition phase and the customer sales phase of a company’s operations.

Where Else Are You Going to Store All That Stuff?

One reason to invest in warehouses is the simple need to have adequate space to store goods in an organized way. This need, however, arises from the prior decision to maintain an extra back-up supply of marketable products so as to prevent shortages, give in-store workers time to shelve items, and allow response time to changing customer buying patterns. Without this back-up supply, no sizable and/or fast-paced retail outlet could function efficiently.

Designed for Efficiency

All warehouse personnel are responsible for storing and re-shipping goods received in a way that minimizes the risks of both over and under stocking, holds the items until needed but not for too long, and keeps strict track of shipping records so as to avoid any loss of goods. Efficient storage and packing methods cut down on waste and provide a critical link in the logistics scheme of the business.

Types of Warehouses

Some warehouses are simply short-term stop off points (transshipment warehouses), but many of them do much more. Supply warehouses store goods necessary in the production of factory goods, especially raw materials, as well as finished products that await shipment until the proper season. Distribution warehouses are placed in central locations to gather goods for disbursement. They sometimes consolidate goods produced at different factories and ship them out to one distribution point, sometimes separate the products of a single factory for shipment to multiple locations, and yet other times combine both these functions in cross-docking. The last named procedure involves taking diverse goods from multiple factories, mixing products from each source in each order, and then shipping the different orders to various destinations. It is a “criss-cross” type of procedure.By gauging how much of each product may be needed in-store at different times of the year and at different retail locations, logistics planners can use warehouses to provide a “buffer” supply to counter the effects of out-of-season goods and keep them in-season at their outlets all year long. They can plan out transportation time, warehouse space, processing time in the warehouse, etc. to form a fully informed business logistics plan that will save both business and customer money.