Warehousing is the process of storing goods within a storage facility. It’s a critical business function for companies that operate within the distribution channel. Manufacturers, wholesalers and retailers all commonly maintain distribution centers to store and move goods.
Here’s a primer on the various warehouses that consumer goods flow through on the way to you.
Manufacturers buy raw materials, hold them in a warehouse, make finished products, and then hold them again until sale and distribution. To manage this complicated process, manufacturers need a well-planned and organized system. Such a thing is known in the Warehousing and Logistics industry as a Warehouse Management System (WMS).
THE WHOLESALE WAREHOUSE
Wholesalers are often referred to as the “middle man” in the distribution process. They buy from manufacturers in large volumes and resell to retailers in relatively small quantities. Thus, wholesalers are most likely to need warehousing to hold goods in transit.
Similar to a manufacturer, the wholesaler needs an efficient system to receive goods into inventory and then pull them out for transportation after an order.
Retailers don’t always have warehouse facilities. However, those that buy and hold a lot of inventory often rely on warehouses because space in a storage facility is typically less expensive to manage or use for storage than retail space.
The question for retailers is often whether to manage their own facilities, or to hire third-party warehousing services. Third-party providers are sometimes a preferred options because they have experts and tools that allow for the best warehousing processes.
Costco is a prime example of a depot. They have a large turnover and can maintain excess stocks due to a strong consumer base.
Cold storage warehouses are refrigeration facilities for perishable goods such as vegetables, fruits and other food items. Most companies prefer to outsource their cold storage facility to avoid the expense and trouble of constructing and maintaining their own cold storage facilities.
CASH AND CARRY WAREHOUSE
These warehouses provide the opportunity for retailers to buy goods in bulk at low prices. Cash is the key word here. Customers (retailers, professional users, caterers, institutional buyers, and so on) settle the invoice on the spot in cash, and carry the goods away themselves (the retailer does not offer delivery service).
A bonded warehouse is a building or other secured area under the control of the Customs and Excise Authorities. Dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty, and cannot be removed until the duty has been paid on them.
KEYS TO THE WAREHOUSE
Of course, having a distribution center, staff and technology is only the beginning. You need an effective distribution plan that aligns with overall business strategy.
One key factor is how to utilize the most efficient and effective transportation systems. Some companies use their own trucking fleets, for instance. Others have a third-party trucking company that moves goods for them.
Businesses in the distribution system also collaborate with suppliers and buyers in a process called supply chain management (SMC).
SCM means that instead of operating independently, each distribution partner works closely with others to ensure the most efficient distribution system that provides top value to end customers.
Software tools such as a WMS we mentioned earlier will drive some of the efficiency in an effective supply chain. Computer tools help you monitor where inventory is placed in the distribution center once it arrives, and track the amount of inventory you have on-hand at all times.
Buffalo Turbines: Specializing in turbine rotor replacements for either single or multi-stage steam turbines.
For a quote or for expert help regarding to your industrial operations, call toll free at 1-888-317-8959 ext.26 today.