If you are pretty familiar with the concept of production you would understand how essential warehousing management is. Production process is facilitated by good flow of resources such as finances, raw materials, information and finished products between agents of production. And the process is complete if and if only finished goods get to the final consumers. This concept uses the supply chain management (SCM) approach to smoothen the movement of resources from suppliers to to producers to wholesalers to retailers and to the final consumers. By and large, warehousing happens to be the major component of SCM. That is economically important to not to both to all agents involved in SCM.
Warehouse functions as inbound and outbound facility. As an inbound facility, when you have your orders filled, it goes to the warehouse- that, your items will be directly shipped to your warehouse. As an outbound facility, it serves as platform for packing, branding shipping orders. In simple terms, it is used for receiving receiving, storing and distributing items. Safety measures are put in place for stored items.
Cost Cutdown
Warehouse management helps cut down expenses via effective storage and distribution of bulk items simultaneously. Using multiple locations for receival and distribution of resources raises cost margin. When all items get stored to one location from where it is distributed, the hitches of using multiple channels to transport resources is eliminated and cost is also reduced. It also allows for mass shipping. Instead of suppliers to ship resources in units at different times which is cost implicative, they would warehouse all the resources and have it shipped at once. That helps cut down the cost of shipping.
Circulation and Flow of Resources All Seasons
Warehouses are designed to serve the purpose of storage as well as reservation for goods. That helps to ensure the a good flow of resources. Some items have seasons and when its season is gone, it becomes scarce if not completely unavailable. Such items are warehoused to ensure all round season circulation.
Elimination of Third Party Value Adding Services
Value adding services such as branding and packaging help identify a product and give it good image before customers. Hiring third party companies to carry out those services will raise over head cost. For that, warehouse comes into play. Warehoused items are packed and branded before delivery. That goes by the third-party arrangement this is also economically significant to reducing overhead costs.
There are different types of warehouses. It each serves different purposes. Taking that into account, it makes sense figure out what kind of materials you would be warehousing and choose a supply chain management facility that is suitable for it.
