The Importance Of Warehousing In A Logistics System

We live in the times of digital economies and e-Commerce, where global commerce and trade depend on the strength of logistics. While people can order anything globally, companies have to engage massive logistics systems to receive their orders. Logistic systems are designed to meet customer demands through effective storage and movement of goods from origin to destination.

Since storage planning, control and implementation are critical to the success of the supply chain. Warehousing becomes an essential part of logistics systems. Warehousing is the process of storing physical goods or products for future sale and distribution. However, a fully functional warehouse is much more than just a storage space. Companies use their warehouses for receiving inbound goods, inventory management, packaging, shipping, and order fulfilment.

Here’s how warehousing forms an essential aspect of logistics systems and helps companies build global supply chains.

1. Inventory Management
Most of the small and medium businesses don’t maintain sufficient inventory and face challenges such as stock-outs, delayed shipments, and slow order processing. It can be fixed by having functional warehouses as part of the supply chain. One can maintain warehouses at central locations or adopt a hub-and-spoke model for better market reach.

With dedicated warehouses catering only to a single brand’s storage and inventory needs, supply chain efficiencies can be magnified manifold. One can effectively manage routine tasks such as incoming shipment sorting, storage, allocation, and distribution. But if your inventory size is small and variable, then investing in on-demand warehouses or ad-hoc warehouses can do the trick too.

2. Cost-Effectiveness
Logistics costs contribute to the final product price and profit margin for every seller. The more cost-effective the logistics systems, the higher the returns from every product line of the brand. And a significant chunk of logistics cost comes from stock storage in retail space or other down-the-channel partners. Resellers who assume the responsibility of carrying inventory also demand higher margins.

But, if companies can maintain their warehouses for stock storage, this channel cost goes down significantly. There is no need to build own RCC warehouses or invest in PEB warehouses in different geographical markets. Based on market demand and cost-benefit analysis for every channel, companies can invest in a warehouse on lease or on rent. Shared warehouse facilities can further bring down storage costs as third-party providers can simultaneously offer focused logistic services to several warehouse users.

3. Channel Efficiency
Setting up dedicated warehouses at strategic locations can significantly improve your channel efficiency too. Customers expect companies to offer various products, sorted to the smallest stock unit, delivered to their doorstep in the fastest time possible. And most of these activities are traditionally taken care of by offline retailers.

But with e-commerce gaining adoption and customers buying all manners of products online, maintaining channel efficiency falls to warehouses. Companies that maintain in-city warehouses or delivery centres can set up omnichannel integration and deliver customer value at a lower cost in a shorter time.

Not to mention, with centrally managed, temperature-controlled warehouses, there is a much lower risk of spoiled or incomplete orders reaching the customers. Your products don’t just remain safe from damage, theft, and pilferage in transit, but also while it is resting on secure warehouse shelves.

4. Packaging and Processing Control
Warehousing also allows companies to exercise better control over bulk stock management, packaging, and order processing. With the help of technologies such as ERP (Enterprise Resource Planning), RFID (Radio Frequency ID), and IoT (Internet of Things), integrated warehouses can receive and fulfil orders seamlessly.

Real-time information flow can be maintained regarding inventory status, packaging needs, order specifications, and delivery instructions. For instance, when a customer places an order for a 50-inch TV from an e-commerce platform, the order can be directly fulfilled from the nearest warehouse with the stock availability.

At the warehouse facility, the specific ordered unit can be identified using RFID and packaged as per the brand’s standards. Multiple layers of safety packaging can be applied at the warehouse on the pre-existing packaging to avoid in-transit damage. The package can then be dispatched, and its transit status can be tracked by the company and the customer online. These facilities are also available in full-service, ad-hoc warehouses, warehouses on rent, and shared warehofsuppuses.

5. Specialised Storage Conditions
Different categories of products need specialised storage and handling conditions. For consumer durables and furniture, insulated packaging and careful handling are necessary to avoid damage. Similarly, for edible and perishable products such as dairy, ice-creams, and medicines, cold storage is essential to ensure that the products live through their shelf life and reach customers in safely consumable conditions.

Companies have to ensure that these conditions are maintained on the production floor and extended to the rest of the supply chain. One can achieve these unique storage conditions with Built-to-Suit (BTS) warehouses or customised warehouses. Furthermore, with temperature-controlled warehouses, perishable products that need to be stored at specific temperatures can be effectively stocked.

It is incredible how much logistics systems depend on warehousing and how organisations save millions by investing in their warehouses. But if you are still uncertain about building your warehouse and losing money and business opportunity due to your hesitation, then partnering with a specialist can be an excellent place to start.

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Why should you choose StoreFresh as your warehousing solution partner?

StoreFresh is a warehousing solution provider that understands your company’s specific needs for warehousing, offering end-to-end support for setting up your logistic network. You can choose to rent-in a RCC warehouse or a PEB warehouse anywhere in East India.

All StoreFresh warehouses are regulation compliant and undergo rigorous quality audits before storing any inventory. Warehouses are installed with complete racking, docking, and networking infrastructure. Specialised storage conditions are ensured in every temperature-controlled warehouse of StoreFresh. Our 24X7 customer support and daily reporting also give you greater visibility of your merchandise, even if you are using shared warehouses or limited services.

Store Fresh also offers Ready-To-Move warehouses, on-demand warehouses, ad-hoc warehouses and warehouses on lease to start availing benefits of warehousing in the shortest possible time. With centrally managed operations and ERP integration of each StoreFresh warehouse, you can experience unparalleled store-to-channel integration for your company.

3 replies on “The Importance Of Warehousing In A Logistics System”

The information provided in the article solved most of my queries. I would like to know more about the term Ad-hoc warehouse that is used in the last para.

My friend wants to make sure that he has a place to store his merchandise. It makes sense that he would want to get a good warehouse for that! I can see how being able to store everything in one place would be really beneficial.

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