Benefits Of Warehousing

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Warehousing is the primary component of any supply chain. Rather is manufacturing, construction or eCommerce, every business needs the warehouse. Warehousing in New Zealand is key to maintaining the inventory of the critical items or items that need to be sold. The warehousing has helped the business to have the on-hand inventory and also help in other value-added services regarding inventory. Warehousing has many commercial benefits that businesses can reap like;

  1. Consolidation: The warehousing helps to consolidate inventory. For instance, in the eCommerce business, the company will be selling different items and they need a warehouse to consolidate all the sellable merchandise in one place. This will reduce the cost of inventory handling plus increase the efficiency of inventory storage. This will reduce the lead-time of material from suppliers, as you can consolidate and store the material from a different supplier in one place. Otherwise, for every material, you have to wait for supplier delivery and that will increase the delay in the supply chain. The warehouse is pivotal for the higher rate of ecommerce order fulfilment
  2. Break Bulk: In the eCommerce business, buying the items in bulk give benefits in better pricing and margin. If you buy a single item in bulk quantity and store it in the warehouse, then you can break the quantity into smaller ones for further shipments to the customer. This helps to increase the profit margin on certain items. Without a warehouse, you won’t be able to buy the stock in bulk as no supplier will be ready to hold the stock for you for a longer period. Plus, if any supplier will carry the stock for their client, they will be charging a mark-up on the storage. Whereas having your warehouse, will reduce the storage cost and you will be having in-hand inventory to serve your customer faster.
  3. More Space: In the manufacturing industry, the warehouse is key to providing more space for the fresh production inventory. The warehouse and manufacturing will get choked due to in-process inventory. Warehousing is mandatory for any manufacturing unit otherwise they won’t be able to have any place to out their produced inventory. Also, without a warehouse, they have to limit their production as per available space on the production floor, which will limit their production and selling capacity.
  4. Value Addition: In the eCommerce business, warehousing is not only used for inventory management. But it is very critical for ecommerce order fulfilment in Auckland because not only that you can store inventory in the warehouse, you can also process the customer order in the same area. The warehouse can be used to pick the stock, repack and hand it over to logistics for delivery. All this can be done under one roof when you have a warehouse. This reduces delivery time to customers and shortens the complete order cycle. The warehouse can be a prime factor that can help to improve ecommerce order fulfilment.

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