Warehousing is storing physical inventory for sale or distribution and sometimes for cross docking . Third party warehouses as opposed to your own warehouse are used by all different types of businesses that need to store products for the purpose of shipping them to other locations, distributors or to end users utilizing the process of order fulfillment such as FBA or FBM Fulfillment.
As part of the logistics process , warehousing encompasses activities related to the right storage, protection of goods in a location for the period of time required. It also involves the management, transportation, location, handling and conditioning of this merchandise from receipt to dispatch.
The warehouse is the key element that enables you to regulate the flow of goods between supply and demand. It is here that the management of the materials that a business moves, stores and handles is concentrated to respond to commercial and production needs.
Role of Warehousing in Logistics
Warehousing makes it easier to receive, store and distribute the goods as all the goods are stored in a central location. This helps in reducing transportation costs and increasing the value of goods as products are available at the right place, at the right time.
The ultimate goal of warehouse logistics is to optimize the process in order to reduce operating costs while maintaining efficient service.
- Easy distribution.
- Managing inventory better.
- Storage space for excess inventory and seasonal products.
- Faster inventory turnover.
- Higher customer satisfaction.
Many companies operate warehouses that handle order fulfillment such as 3PL Companies which are an essential part of logistics that ensure delivery of goods to the final consumer. 3Pl Companies also handle bulk storage and Business to Business Distribution. 3PL companies get involved in freight forwarding , customs clearance and last mile delivery.
Just like Ocean freight shipping and inland transportation, warehousing is the link that connects vendors to customers.