Solving the Logistics Problem with Warehousing

The presence of warehousing in the logistics system is of paramount interest for businesses to ensure smooth functioning of the operations which brings one of the most sought after trait in logistics world – consistency. Ever changing customer needs, on time delivery, Infrastructure, Capacity, inefficient communication and Security are some of the major problems in the logistics system globally. A proper arrangement of warehouses can bridge the gap between the supply and the demand. There are three kinds of warehouses used which are: Private, Public and Bonded warehouses.

Some problems that a warehousing system can address are:

 

Storage: One of the major functions of a warehouse is storing goods after production. Once goods are manufactured they are to be stored until necessary arrangements are made for the distribution. It is important that the goods are appropriately taken care of to avoid damages and in case of perishable products, spoilage. Raw materials too are needed to be stored to enable mass production to be carried on uninterruptedly. Often, warehouses store goods in anticipation of price rise or a spike in demand too.

Risk minimization: Manufactured goods are subjected to other form of risks like pilferage, shrinkage, deterioration; damages etc. which warehouses take responsibility of as they are built in way that ensures proper nurture and security of the stored goods. Its a good idea to build the warehouse keeping in mind the requirements to be fulfilled or rent it accordingly. Warehouse Space Chennai   
is available for building warehouses as per requirement.   

Information flow: Warehouses contain a great deal of information that is very important in taking business decisions. A variety of information flows through warehouses during operations such as order status, shipment status, throughout rates, volume of goods stored, category of goods, average time taken to complete an order, average cost per order, number and frequency of  inbound and outbound shipments, routing,  invoices etc.

Price Stabilization: A small change in the supply or demand of goods can have a drastic impact on the prices. Warehouses provide the time utility by storing the goods long enough to provide them when there is an excess demand or when the supply from manufacturing facilities is high.

Spatial convenience: Without the warehouses it would be impossible for customers to buy the desired products within their neighborhood which will reduce the availability of products thereby leading to lower profits. Warehouses serve to provide a spatial continence to customers ensure an even distribution of products throughout the markets. For example, if you have Warehouse Space Delhi, it would be useful in serving the customers throughout Delhi but is not good for serving farther markets. 

Along with addressing the most pressing concern of the logistic system, warehouses have some other added benefits: 

Regular production

To enable mass production to continue on a regular basis, it is important to keep a ready stock of raw materials that need to be stored and replenished at constant intervals. 

Store of surplus goods

Warehouses also act as shock absorber in case of overproduction which can happen in anticipation of future demand. So, a warehouse can store the surplus manufactured goods until they are demanded by the customers. 

Economic Benefits

Economies of scale refers to the practice of reducing the average cost of production over long run achieved through better equipment handling, efficiency in management practices, improved relationship with suppliers and learning. Warehouses provide a economies of scale through efficient operations, augmented storage capacity and a central location. Economic benefits are realized through accumulation of operations and consolidation. Outbound delivery costs can be reduced using consolidation operations for both the business and its customers.

Service Benefits

Warehouses serve as part of a backup plan to make sure that outbound orders are fulfilled on time. In order to maintain a minimum volume of inventory warehouses indulge in a practice called safety stocking. It has two perspective inbound view – where safety stocking means that an unexpected event like a  transportation delay or a case of damaged goods won’t delay filling and shipping customers order, and the  outbound view- where safety stocking is an insurance against out-of-stock scenario.