Warehousing facilities play a vital role in the overall supply chain process. A warehouse is a large, spacious place that is used for the storage or accumulation of goods. Storing goods throughout the year and releasing when they are needed creates time utility. Continuing globalization increases the challenges in such areas as reverse logistics, environmental sustainability, information technology and overall supply chain integration.
The term “distribution center” may actually be much more appropriate in representing the broad range of activities that now occur in modern warehouses that go beyond filling customer orders to provide an ever expanding array of value added services. Effective warehousing, inventory management, and distribution processes can increase productivity and lower costs.
The Importance of Warehousing in Your Supply Chain
Nowadays, the supply chain has evolved and changed in the past hundred years. The modern supply chain is now equipped with better information and technology that can predict the demand for products or goods in the future, they can deliver goods on time. The new supply chain slogan is to be able to deliver the right goods, at the right place and at the right time.
There are two main types of warehouses, and the one you choose will impact its role in your supply chain:
- General Warehouses used to store goods while distribution centers have additional services such as product mixing, order fulfillment, cross-docking, packaging, and others. These kinds of warehouses are commonly used to store seasonal products or large quantities of backup inventory. They typically offer limited handling and transportation services.
- Distribution Centers focus on the customer and becomes a bridge between the supplier and the customer. The main function of the warehouse is for storing goods efficiently, while the main function of the distribution center is to fulfill customer demands. Usually, orders from warehouses and retail are sent by distribution centers, not from the main warehouse.
The Advantages of Warehousing
There are many benefits to incorporating warehousing into your supply chain process. Here are just a few:
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Distribution: Warehousing and the placement of the warehouse can directly impact on your distribution. The further away your storage facility or warehousing is situated from your suppliers or manufacturers, the more your distribution costs will rise.
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Storage Facility: This brings higher returns for your business. Manufacturing or the purchasing of goods in bulk always makes sense in a business point of view.
Inventory Management
Storing raw materials and products in a warehouse makes keeping track of and managing your inventory simple and easy. When you store semi-finished or finished products, warehousing also ensures that you always have adequate supply to meet demand, which allows you to more easily manage your levels of production.
- Measuring Performance
The primary objectives of a distribution center include providing the right product, at the right place, right time, and damage free – at a competitive cost. The most common performance measures include handling productivity, space utilization, accuracy, damage, service, cost, and inventory. Cycle time is also a critical measure to determine service and efficiency. Dock to stock cycle time is a critical measure of how long it takes to make material available following receipt. Cost and inventory performance measurements include total distribution center cost per unit handled, distribution center cost as a percentage of sales, and inventory turnover. - Opportunities for Expansion
Outsourcing your storage and distribution to a warehouse means you can keep anything off-site that you do not need immediately. As you grow, your inventory can grow with you without the constant need to buy more space.
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Increased Profits
Centralizing storage and distribution in one location by taking advantage of warehousing can lower your operation costs and increase profits. You need fewer employees, less equipment and technology, and fewer buildings, which will reduce the cost of utilities and transportation.
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Risk Reduction
You should never have to worry about your valuable materials or products being damaged, lost, or stolen. Keeping your goods in a warehouse minimizes the potential of inventory loss and transfers risk to the warehouse.
What to Look for in a Supply Chain Warehouse
You need to be able to rely on your warehouse to treat your inventory as if it were their own. Here’s what you should expect from a good supply chain warehouse:
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Choose a Company That Can Meet Your Needs
There are countless fulfillment companies out there – and most will claim to be able to meet your every need and will extend a promise to ship your products accurately and on time. But there is nothing more important than insights; do the math to make sure you choose a company that is knowledgeable about your industry, or ideally, already have several clients operating in the same field as you. They need to understand you, your brand and your business model. Make sure the skills they bring to the table meet what your brand.
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Choose a Fulfillment Partner That Will Grow Your Business
3PLs will facilitate all the important aspects of your backend logistics and fulfillment, so that you can focus on marketing and sales – the biggest drivers in the growth of any business. They are also willing and able to adapt and grow with you as your business grows. The services they offer, from their integration technologies to their reporting systems, should be customizable and scalable. The warehouses should also be equipped to meet the various shipping requirements of each channel you will sell on – wholesale fulfillment, FBA, ecommerce channels each have different order flows and shipping volumes. You will want a partner that can deliver on each.
Make sure the 3PL selected is aligned with your plans and can accommodate your company roadmap for years to come.
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Choose Someone That Offers a Wide Range of Shipping Solutions
Getting your product where it needs to be – on time, every time, accurately, and cost-effectively – is what provides your customers a great brand experience. To do this, you need to rely on major shipping carriers. Transportation costs have skyrocketed in recent years, but Flex Logistics can help keep those costs in check. Our multi-modal transportation capabilities offer an end-to-end (3PL) third-party logistics management solution for your supply chain and get you the most cost-effective, true transit times for your parcels.
The FLEX Logistics Team is Here to Help!
The experts at FLEX Logistics are constantly learning and researching for the most advanced technologies that help us create better products. Whether we’re storing, transporting, or delivering your goods, we always treat your items with the care and respect they deserve.
Contact FLEX Logistics to learn more about our 3PL warehousing solutions and value-added services. Our team understands the importance of getting your products to the market. That is why we aim to understand your business and build lasting relationships with you and your team. Whether you are looking to add a new warehouse to your existing operations, growing and need to increase your distribution efforts, or starting a new company, FLEX has the solutions to meet your supply chain needs.
Contact us today to discuss your current and future warehousing and logistics needs. We will work together with you to understand your requirements and develop a solution that will set you up for future success.