Are you starting a growing company? Have you ever asked yourself “where can I find storage near me?” Do companies really need material handling and storage as part of the logistics system?
If the demand for a company’s products were known with certainty and products could be supplied instantly to meet demand, storage would theoretically not be necessary, as no inventory would be kept. From this it follows that inventory maintenance produces the need to handle materials and storage becomes an economic convenience rather than a necessity.
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Reasons for storage
There are four basic reasons to use a storage space:
1.- Reduce costs: storage and its associated inventory are added expenses, but can be offset by lower costs obtained thanks to improved efficiency in transport and production. By placing the storage close to transportation routes, you can save significant transportation costs.
2.- Coordination of supply and demand: companies with highly seasonal products, together with a reasonable constant demand, have the problem of coordinating supply with demand. When it becomes too expensive to precisely match supply with demand, warehousing is necessary. Storage is usually needed, but its cost can be offset by the better price you get for commodities.
3.- Production needs: storage can be part of the production process. The manufacture of certain products requires a certain time to mature. The warehouses not only serve to maintain the product during that manufacturing period, but in the case of taxed products, they serve to insure the product until the moment of its sale.
4.- Marketing Considerations: Marketing frequently worries about how quickly the product should be available on the market. By storing the product close to the customer you can often reduce delivery time or the offer can be available without delay. If you can ensure fast delivery then your customer satisfaction will increase and that is good for your business.
Storage system functions
The term distribution warehouse differs from warehouse warehouse because it implies that a large part of the space is dedicated to semi-permanent or long-term storage, unlike the distribution warehouse that only has most of its space to temporary storage and is gives more attention to speed and ease of product flow.
Storage facilities are designed around four main functions, which reflect the particular emphasis on meeting one or more of these needs:
Maintenance or belonging: the warehouse provides information and allows for the entry of inventories.
Consolidation: It is economical to establish a collection point to consolidate small shipments into larger ones to reduce overall transportation costs.
Breakdown loading – A warehouse can focus only on receiving and shipping activities, eliminating warehousing and order picking activities. Volume shipments that have low freight rates are moved to the warehouse and then shipped again in smaller quantities
Mix: purchase of different products from different manufacturers and they are collected in a single point and assembled into orders to later be forwarded to customers.
It can be concluded that the storage system ensures that your company’s operations run smoothly in the long term.
