Benefits of warehousing

  • Shipment consolidation for lowest possible transportation rate and reduced congestion
  • Breaking the bulk – receive combined customer orders from manufacturers and ships them to individual customers
  • Postponement of final production by doing packaging or labeling
  • Stockpiling for maintaining inventory buffer to address seasonal storage
  • Service benefits
    • Spot stocking – specific products are stored against orders usually for seasonal sales
    • Assortment – stocking product combinations against future orders
    • Mixing – large shipment with preferred combination of each product
    • Production support – have safety stocks, supply materials economically
    • Market presence factor – local warehouse deliver to market