Warehousing plays a major role in the supply chain process. A warehouse helps in storing the goods before they are shipped to the customers in different locations. There have been changes in warehouse responsibilities due to the continuing globalization. The warehouse is no longer used for storage purposes only.
Nowadays, warehouses are used to provide a wide array of services. The purpose of warehousing cannot be stressed out enough. Most people do not understand the importance of warehousing. Holloway storage in Sydney offer warehouse services. This article looks at the benefits of warehousing in supply chain process.
Value adding operation
Value addition is one of the primary advantages of a warehouse. A warehouse increases the value of goods by making sure that products are in the right place at the right time. Therefore, it reduces the overall costs and the cycle times. There are numerous operations that take place in the warehouse that contributes to the addition of value. Such operations are; order assembly, consolidation, cross docking and product mixing. Businesses can keep inventory and ship the products on time.
Warehouses also provide economies of scale through strong capacity, efficient operations, and central location. The economic benefits are achieved through accumulation and consolidation activities. Items are delivered and packaged into one warehouse. The item is delivered to various destinations. Through the accumulation operation, the store acts as a buffer since it balances the demand and supply for long term storage. Such an operation is relevant to the business in terms of profitability. A company increases its profitability when it has products all year round.
The other importance of warehouse is that they are a contingency plan. Using a warehouse ensures that the business has enough stock to maintain the demand. Safe stocking ensures that the business does not have to worry about any delay in shipping caused by damaged goods. Furthermore, safe stocking acts as insurance against the issue of out of stock items. Therefore, a business does not have to worry about not providing the goods on time to its customers.
A warehouse is at a central location. Therefore, it allows a shipper to store receive and distribute their products. Once the products arrive at the store, their responsibility is transferred to the warehouse personnel. However, safety measures have to be established. Additionally, the organization of the products influences the shipping times. Therefore, the central location makes it easy to ship the products to different places. It gives convenience to the business owner and thus helps improve the business.