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Warehouses: Why We Have Them, Part 1

4 years ago
Rita K

Every business wants to reduce inventory and accelerate deliveries. Recognizing that objective, why do we still have warehouses?

Managing Supplier Unpredictability  We can’t always control our suppliers. 

To control our production and shipments, it is often necessary to have inventory that is on hand, approved for quality and ready to go to the production or shipping department.Reducing Mistakes  A warehouse can function as a conduit through which components flow before being shipped to customers. Quality processes can be applied to individual items, or on a statistical basis to samples of larger batches. Once the materials are stored in the warehouse, we are sure that they conform to our specifications.Controlling Process Flow  A warehouse might contain raw material, work-in-process and finished goods.  

This allows us to manage the flow from receipt of raw materials to shipment to our customers.Managing Distribution  A warehouse might be a distribution center and hold goods we produce or goods produced by others. It allows us to receive goods in bulk from our suppliers and sell those goods in smaller lots to our customers.Managing Shipments  A warehouse might be designed to store goods to be shipped to fulfill customer orders for single or multiple items. These are called fulfillment centers.

Managing Transportation  Warehouses may be established regionally to help reduce shipment costs to individual customers.Adding Value  A warehouse may offer additional services, such as packaging, labeling, etc. These value-added services can generate increased profits

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