Importance of Warehousing in Supply Chain Management

Warehousing refers to the process of storing and organizing products in a large space and distributing them later when a requirement is raised. Warehousing and warehouse management are part of the logistics management system, which in itself is part of the supply chain. Warehousing plays a vital role in the supply chain process. It is an integral part of Logistics and Supply Chain Management System. For most of the common people, warehousing involves just storing of the products while it involves inbound functions for storing and outbound functions of packing and shipping. Some of Warehousing’s importance in Supply Chain Management:

1. Integral part of the supply chain process: Warehousing forms an integral part of the supply chain process. Even though this is not a customer-facing operation and your buyers might never know about this aspect of your business, without it, their shopping experience will be hampered. 

2. Inventory Management: According to a report, about 34% of businesses have shipped an order late because they sold products that were not in stock. So inventory management plays an important role in supply chain process.

3. Online Shopping: There are so many largest online retailer in the world. The primary reason for this achievement is it’s impeccable supply chain management system. They have used the technique of having multiple warehouses close to city centres and keeping staff costs at a low by replacing them with robots. The system has been considered genius as it runs fully automated with the ability to track any item’s location through a barcode at any one time.

4. Distribution: Warehousing and the placement of the warehouse can directly impact on company’s distribution. If the storage facility or warehousing is situated far away from suppliers or manufacturers, the more the distribution costs will rise. Strategic placement of the facility can dramatically affect on transportation costs.

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