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Understanding The Role Of Warehousing And Distribution In Logistics

Amazon Warehouse

Logistics is a term that is still poorly understood in many businesses, particularly those that are increasing their supply chain and customer reach.

However, logistics, along with your warehousing and distribution, is essential to the smooth running of your supply chain, and therefore your business. Where this is not run efficiently, your customers, clients, and eventually your revenues and staff all suffer. 

However, avoiding issues with your supply chain logistics is simple, and it begins by understanding the risks that need to be avoided.

The first risk you need to mitigate is that of badly managed inventory. With the costs of holding inventory continuing to rise, it is more important than ever to choose the right methods for effectively managing it.

One method is to hire warehouse storage space. However, when deciding between warehouse storage solutions you need to consider all your costs, including insurance and transportation.

You need to make sure you have the right fleet of vehicles and that they are managed effectively. MHF trucks could be the missing piece of the puzzle.

This is one of the reasons why choosing a company that can provide warehousing and distribution is often the best solution. You are only hiring one company, with one set of administration costs, and reduced risk of costs due to miscommunication between the warehouse and the distribution teams.

Another risk that needs to be avoided is the potential for bottlenecks in your logistics and supply chain. This is most likely to happen where there is lack of communication between different departments in your business.

Ways to solve this include ensuring that your control levels are set high enough, and hiring professionals who understand the intricate details of your distribution network. 

Closely connected to this are the risks to your business that arise when you fail to integrate your logistics effectively.

Communication is again key here, particularly between you and the company you hire to oversee your warehouse distribution logistics. Remember that supply chain governance remains with you, and that you should be aware of how your supply chain is being managed at all times, even when the entire process is being handled by a third-party logistics specialist.

This is not the same as micro-managing every aspect. It means knowing what inventory is going where on any given day, and if there are changes needed, knowing who to turn to, and how they will be able to fit these changes into their working schedule. Another risk is reliance on technology.

Software that supports warehouse and distribution services is vital to the smooth running of your logistics, and your business in general, but there should always be a human mind behind it. When this is removed and no checks are made on the accuracy and effectiveness of the software, then mistakes are made and revenue is lost. 

Where To Start When Choosing The Right Warehouse Storage Solutions

Third party warehouse storage provision is becoming an increasing necessity for businesses that do not have the space, or the resources, to house their own stock. Given the importance of stock to a business, choosing the right warehouse storage solutions is essential. To do this it helps to know what key areas you need to assess.

One of the most important aspects to consider is the location of the potential warehouse. Its location directly affects how easy and efficiently you can transport your products to the warehouse storage facility, and how easily they can be distributed onwards to clients and customers.

While distance is an important consideration within this, the type and state of local transport routes is also important.  A closer facility could cost you more in terms or transportation and time in the long run, if it is not adjacent to major roads or a main railway line.

While a warehousing and distribution facility that is slightly further away, but close to an international port, might be vital if you import and export your goods. Your choice of location should also be determined by your medium and long-term goals.

If you are looking to expand your network, then you require a location that allows easy access to new routes and areas of the country you want to expand into. Make sure they upkeep their warehouse well and invest in quality warehouse and office cleaning.

Time is another consideration. You need to ensure that the warehouse storage solutions you are considering can meet your needs in terms of how soon you need the storage space, how long you need it for, and any changes in the amount of space you need at different times of the year.

If you need seasonal storage, your needs will be very different to businesses that store similar amounts on a regular basis.

Of course, cost is going to be a major consideration as well. However, when it comes to costs, you need to look further than the obvious cost of the warehouse storage space you are hiring.

Consider also your transportation, insurance, picking and packing costs if required, and the potential costs of any other additional services the storage solutions may offer.

One consideration that is often over looked is that of access. You need to know what access you need to your goods while they are in storage, and check that this is possible.

There is little point working with a storage solution that close before you can get there, or whom don’t open on days you are likely to need your stock. Also consider who else is accessing the warehouse solutions at any time.

What solutions are in place to ensure that your stock or goods are safe? How do the company ensure that the risk of mix ups between different items stored in the same place is reduced?

This includes looking at elements such as the different storage options used within the facility, whether there are dedicated areas for each set of storage, and how the goods are labelled and tracked from the time they enter the facility until the time they leave, or arrive at their destination.

Other aspects that should be considered when search various warehouse storage solutions include the additional services that are offered, how much space is available within the facility, and the capabilities and experience of the staff.

If you take your time and consider these points before choosing your solution, you will improve your inventory management and gain peace of mind. 

PM Today Contributor
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