Wednesday, November 02, 2016
As businesses grow, they may encounter an increased need for industrial storage to carry a larger range of products, serve a wider geographic area of customers, or some combination thereof. During this growth and expansion, you might consider branching out on your warehousing capabilities to better meet the demands of your business and customers. The most common warehouse configurations are either centralized, wherein all products are shipped from one primary location, or decentralized, a method of maintaining several smaller warehouses spread out to different areas in order to better serve different markets or stocking different products. Each method has their own advantages and disadvantages, and if you’re considering branching into a different warehousing method here’s a few advantages and disadvantages to each to keep in mind. Centralized Warehouses-A common advantage of centralized warehousing is the reduction of operating costs. By choosing to centralize your distribution centers, the need to pay rent and utilities is reduced drastically. These reduced costs can also allow you to set easier pricing strategies due to the stable nature of inventory management, allowing for higher margins, lower prices, or both. Decentralized Warehouses-One of the biggest advantages of decentralizing your shipping and receiving is a reduction in delay of material handling. Wherever your products are coming from, having a connected network of warehouses and supply facilities will allow you to receive products more quickly and get them out to your customers more quickly. Whatever your approach, just make sure to think your plan through and weigh each method to see what’s best for your business. |