Centralized warehousing is a system where the supplier and the retailer maintain a single warehouse as compared to spreading different facilities to cover a certain territory. Although, centralized warehouse storage can cause longer lead times on orders yet a centralized system is much more useful and beneficial as compared to decentralized systems.
Advantages of Centralized Warehouse Storage Solutions:
Following lines explain some of the most important benefits of centralized warehouse storage.
- Customer Service:
A centralized warehousing storage solutions allows a company to concentrate its best people, inventory systems and equipment at fewer places. This enables warehouses to focus on the needs of their customers more effectively. This can especially be beneficial for retails stores and or customers. Instead of coordinating the details of shipment, service reps try to meet the requirements of the customers as opposed to a decentralized warehouse storage system.
- Lower Operations Costs:
Companies can also reduce a number of operational costs by centralizing their storage facilities. Companies will pay less utility expenses because you will have to own or rent less number of buildings. Similarly, you will not require hiring large number of employees and do not need to install sophisticated computer technology as well. This also helps warehouses to offer low prices to customers yet earning more profits.
- Lower Inbound Costs:
Centralized warehousing storage solutions also lead to reduced inbound costs in addition with reduced operational costs. This helps a retailer to avoid shipment going to multiple locations and saving a huge amount of money by taking in a huge quantity of equipment from a single location. This is definitely is a better deal for both customers and retailers. It also results in increased profits and better customer satisfaction for retail distribution centre.
- Online Retailer Relationships:
The centralized warehousing storage solutions will also help companies to increase their customer base through online retailers. This is especially appealing for online storefronts as it offers fast delivery on fulfillment in addition with concentrated inventory storage. Similarly, online stores maintain their own online centralized storage that also helps them to reduce operational as well as storage costs.