The importance of warehouse storage in supply chain management

Warehouses and warehouse storage play a crucial role in supply chain management. Helping to bridge together production and consumption of goods, warehouses provide a great location for safely storing, packaging efficiently, and distributing your goods.

Warehouses and warehouse storage provide one central location that allows you to store all your stock in one place. With all your stock in one central hub, planning logistics for the rest of the supply chain is much easier.

Check out the benefits of warehouse storage for your business

What is a supply chain?

Supply chains are made up of different individuals or companies who work together in the creation of a product and how it is delivered to customers. A supply chain typically starts from the sourcing of raw materials to the moment the finished product is delivered to the end user.

Supply chain management directs how the goods and services flow through a supply chain. Supply chain management oversees the entire process of transforming raw materials into a final product.

A successful supply chain will implement the following best practices:

• Supporting continuous improvement (continually improving the supply chain)

• Aiming for higher velocity to improve the efficiency of the supply chain and meet customer demands

• Encouraging collaboration between businesses in the supply chain

• Seeking new technology that will improve processes

• Having metrics in place to allow the measurement of success or failure at each stage of the supply chain

5 elements are crucial to effective supply chain management. These are:

1. Developing or planning a strategy

2. Sourcing raw materials

3. Production or manufacture

4. Distribution and delivery

5. Return

Warehousing and warehouse storage helps greatly in the distribution element of supply chain management, providing an essential component to a fast and efficient supply chain.

Poor supply chain

Without a good supply chain, you won’t be serving your customers well. A poor supply chain will also cost your business in other areas. Without the proper system in place to help better manage supply chains, your businesses profitability could be affected by

• Storing excess inventory

• Inadequate supplier contracts

• Incontinuity of supply

• Poor sourcing or use of poor-quality materials

• Inefficient or inadequate logistics agreements

• Failing to implement cost-saving technology

• Improper or inadequate planning

The role of warehouse storage in supply chain management

Warehousing and warehouse storage plays a vital role in effective supply chain management. By adopting warehouse storage, a business can help improve and streamline its supply chain, alongside safely and securely storing stock.

Making use of warehouse storage in your supply chain could provide you with:

Better inventory management

Warehouse storage provides one location for storing your stock, thereby helping to improve your business’s inventory management. With all your stock stored in one centralised location, you can keep better tabs on stock levels.

Many small businesses fail to keep a close eye on their inventory. Failing to properly implement efficient inventory management could be causing serious issues to your supply chain (not to mention all the extra costs!).

Most warehouse facilities will operate an inventory management system, carefully tracking the items that enter and leave the warehouse, alongside the location and quantity. An ineffective inventory management system will be able to quickly pinpoint the location of your stock, reducing the risk of lost items or delayed shipments.

Improved distribution efficiency

Keeping up with the fast-paced market and ever-growing customer demands can be difficult without a proper and efficient distribution system in place. Whether it’s delayed shipments or unnecessarily long distribution times, poor distribution efficiency isn’t doing your business any favours.

Using warehouse storage in the supply chain provides a central location for the shipment of your goods. Trying to manage the shipment and distribution of goods in-house can be problematic, especially without the proper facilities or equipment. Warehouse facilities have the correct packaging facilities just moments away, allowing for quick pick and pack for speedy distribution.

Warehouse storage providers that also operate courier services can also help speed up the distribution of your goods. More efficient distribution allows for efficient and timely arrival to help meet the demands of your customers.

Proper storage facilities

Businesses that use perishable items, such as food, may find it difficult to find the proper storage facilities in the supply chain. Keeping perishable items fresh for the end user can be problematic. Without proper storage facilities, your costs could be mounting up as perishable stock goes bad.

Warehouse facilities will have proper storage facilities, allowing for better storage of perishable goods. From refrigeration units for storing foods, humidity controls to control the temperature or heating services, warehouse storage can help extend the shelf life of the stock.

A professional warehouse storage facility will ensure that your items do not become damaged while in their care, taking the necessary precautions to help prevent damage or spoilage. Certain warehouses will specialise in the storage of certain items, such as food.

Security

Trying to keep items safe and secure can be difficult and expensive. Without the proper security systems in place, stock can be exposed to theft and vandalism. Warehouse storage can help eliminate this supply chain problem.

Warehouse facilities will have proper security systems in place to minimise the risk of theft or vandalism. A professional warehouse facility will have security features such as security cameras and an alarm system to monitor any break-ins.

A warehouse storage facility will also have fire control systems in place to keep your stock safe from accidental fire. An experienced and professional warehouse will be able to better monitor and secure your stock more efficiently than you could (and much more cost-effectively too).

Stock-up for high demand

Demand for products and services is like a rollercoaster, sometimes high and other times low, such as seasonal or off-peak products. Depending on market conditions, it can be much more expensive to buy supplies and deliver your products when demand is high.

Warehouse storage provides a much more cost-effective method for stockpiling goods and supplies to prepare for periods of high demand. Purchasing bulk loads of stock and items and storing them in a warehouse could turn out much more cost-effective in the long run (not to mention the benefits of improving the efficiency of your supply chain).

Not only does warehouse storage help to ensure price stabilisation in your supply chain but buying bulk shipments of items can also work out much more cost-effective. Saving money on buying bigger units is never a bad thing.

Warehousing places a pivotal role in supply chain management. Not making use of warehouse storage could lead to inefficiency and higher costs for your business in the long run. With the important role warehouse storage has, maybe it is time to consider starting to use warehouse storage.

Check out these 6 considerations for choosing the right logistics company