The Economic Function Of Warehousing

- Oct 16, 2017 -

1. Integrated Shipping consolidation is an economic benefit of warehousing, through this arrangement, the consolidated warehouse receives materials from a range of manufacturing plants designated for delivery to a specific amount, and then integrates them into a single shipment, with the advantage of the possibility of achieving the lowest transport rates and reducing congestion at the customer's receiving platform, The warehouse can integrate inward transfer from manufacturer to warehouse and outward transfer from warehouse to customer into larger shipments. In order to provide effective consolidated shipments, each manufacturing plant must use the warehouse as a stop-cargo reserve site or as a product classification and assembly facility. Because, the main benefit of integrating shipments is to connect the logistics flow of waybill small shipments to a specific market area. The consolidated warehouse can be used by a single manufacturer, or it can be combined by several vendors to use the integrated services of the rental method. Through the use of this integration scheme, each individual manufacturer or shipper can enjoy the total cost of logistics below their respective direct shipment costs.

2. Classification and crossover platform in addition to the product is not stored, the classification and cross platform warehouse operations are similar to the consolidation of warehouse operations. The classification jobs receive a combination of orders from the manufacturer and ship them to an individual customer. The classification warehouse or classification station classifies or divides the combined order into individual orders and arranges for delivery by the local transport department. Because the long-distance transportation transfers is the large quantity shipment, therefore the transportation cost is relatively low, carries on the tracking is not very difficult. In addition to involving multiple manufacturers, crossover platform facilities have similar functions. Retail chains use a wide crossover platform as 4k to replenish fast-moving store inventories. In this case, the crossover platform first shipped the whole vehicle from a number of manufacturers, after receiving the product, if the label, according to customer classification, if there is no label, then distribution by location; -The meaning of the word passes through the "platform" to the trailer designated to the appropriate customer; Once the trailer is filled with a combination of products from multiple manufacturers, it is released to a retail store. As a result, the economic benefits of the crossover platform include full transport from the manufacturer to the warehouse trailer, as well as a full load of transportation from the warehouse to the customer. Because the product does not need to be stored. Reduced handling costs at cross platform facilities. In addition, because all vehicles are fully loaded, more efficient use of platform facilities, so that the platform load utilization to the maximum extent.

3. Processing/extension warehouses can also be used to postpone or postpone production by undertaking processing or participating in a small number of manufacturing activities. A warehouse with packaging capability or labeling capability can defer the final production of the product until the product is known to be needed. For example, vegetables can be processed at the manufacturer's place and made into canned "glazing". Glazing refers to a canned product that has not been labeled, but it can be used to put on a private label. So glazing means that the product has not been specified for specific customers, or the packaging configuration is still in the manufacturer's factory. Once the specific customer orders, the warehouse will be able to label the product, complete the final processing, and finalize the packaging. Processing/Extension (processing/postponement) provides two basic economic benefits: first, the risk is minimized because the final package will not be completed until the specific ordering label is finalized and the packaging material is received; second, using a variety of labels and packaging configurations for basic products (e.g., glazing cans) can reduce inventory levels. So. Reducing the risk and reducing the inventory level combined, often can reduce the total cost of logistics systems. Even the cost of packing in a warehouse is more expensive than in the manufacturer's factory.

4. The direct economic benefits of stockpiling such warehousing services fall under the fact that storage is essential for the chosen business. For example, lawn furniture and toys are produced throughout the year. But mainly in a very short period of marketing period sales. In contrast, agricultural products are harvested at a given time, but the underlying consumption is carried out throughout the year. Both of these cases require warehouse storage (stockpilling) to support marketing campaigns. Stockpiling provides an inventory buffer that enables production activities to increase efficiency in the context of material sources and customer demand constraints.


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