Raw materials and finished products bounce between several locations throughout the manufacturing process, including warehouses. Beyond simply acting as a storage center, warehouses also serve other purposes in your supply chain, which can improve your customers’ experiences. Below, learn more about the role of warehousing in logistics, as well as the benefits of partnering with a third-party warehouse.
What is warehousing?
A warehouse is a facility where raw materials or finished products are stored before they move to their next destination. Therefore, they act as a middle-ground in your supply chain. While some businesses run their own warehouses in-house, many brands contract third-party warehouses to handle the task.
What are the different types of warehousing
Warehouses can specialize in slightly different tasks, including the following.
- Distribution warehouses combine storage space with distribution centers. For instance, they can cut down on shipping times by distributing products directly instead of having to ship them to a separate distribution center.
- Climate-controlled warehouses offer temperature-controlled environments – like heating, air conditioning, or refrigeration – to keep temperature-sensitive items safe.
- Bulk Storage Warehouses house raw materials or ingredients in mass quantities. Therefore, they’re often located near production hubs or major roadways for easy transport.
- Smart warehouses use automation, like robotics or other advanced technology to improve efficiency and accuracy.
What is the role of warehousing in logistics?
Warehouses do more than provide storage and distribution services. Partnering with one can also yield a number of benefits for your business, including the following.
Warehousing in logistics provides more effective distribution
If you choose to work with a combined warehouse and distribution center, you can enjoy more efficient shipping and delivery services. As an example, according to 2024 data from Extensiv’s Third-Party Logistics Warehouse Benchmark Report, 70% of all third-party warehouses can fulfill and ship orders within 90 minutes or less.
When an estimated 63% of online shoppers will choose another option if they can’t receive their items in two days or less, this improved efficiency can prove essential in gaining an edge over your competition.
Precise inventory control
If you’re used to keeping items in your storeroom, you may not be able to track your inventory efficiently. Therefore, you might lose track of where you’ve stored something or lose clarity on how many products you have in stock. Professional warehouses have technology that enables you to better track your inventory.
Most warehouses use software known as warehouse management systems (WMS) that operate based on a barcode system. When a palette enters the warehouse, the barcode is scanned and entered into the system. Once there, warehouse personnel can precisely track the quantity and location of items. You can then use this data to better track your sales patterns and know when to reorder stock.
Improved security
If your items or materials are especially rare or valuable, you might worry about thieves causing financial losses and interrupting your supply chain. Therefore, outsourcing to a warehouse may offer more peace of mind, since warehouses monitor storage areas through measures like cameras, guards, and security systems. The addition of the WMS can also make it easier to find potential discrepancies in your inventory numbers.
Save money
While you might think that choosing a DIY route and managing your own on-site warehouse is less expensive, that’s not necessarily the case.
Operating your own warehouse means you’ll also have to pay for all the overhead yourself, including construction fees, staff paychecks, security measures, equipment, software, and more. Plus, if your storage needs change in the future, you might be left managing more space than you need. Outsourcing to a logistics partner means you don’t need to worry about warehouse expenses and you will only pay for the storage space your items need.
Warehousing in logistics helps stabilize prices & improve customer service
Keeping your items in a warehouse means you can maintain a balanced supply of inventory. And you’ll be stocked and ready for seasonal supply and demand, so you won’t have to adjust pricing. Your customers can then enjoy stable pricing and your brand’s reliability.
Working with a warehouse may improve your customer service in other ways, too. For example, faster shipping times can increase customer loyalty, while the organization provided by WMS can reduce packing errors.
Save time
Finally, outsourcing to a warehouse means that you no longer have to devote internal time and resources to packing and shipping items yourself. You’re placing your storage and logistics needs into the hands of professionals who know what they’re doing, so you can reduce your mental load and free up time for other important business concerns.
When should you add warehousing in logistics?
While some people may believe that warehousing is only for bigger businesses, even small to medium-sized brands can take advantage of the benefits of warehousing. If you’re not sure whether or not your brand should partner with a third-party logistics provider or warehouse, ask yourself:
- Is it impractical or inefficient to hand-pack every order yourself?
- Do you need to store more inventory than you can store on-site?
- Are you having a hard time keeping track of inventory or customer orders?
- Do you need to improve shipping or delivery times?
- Are you concerned about the safety of your items?
If you answered “yes” more often than “no,” it might be time to vet your local warehouses and reach out to good candidates.
Why choose N&D for your warehousing needs?
If you’re ready to reap the benefits of bringing a third-party warehouse into your logistics plan, N&D Transportation Company Inc is here for you.
At our Rhode Island warehouse, we specialize in storing and shipping items efficiently. We own our own equipment and staff a fleet of drivers who are ready to ship items whenever you need them. You can enjoy direct distribution services throughout the New England Area, and national and international shipping through our partner carriers.
Contact us today to learn more.
