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
