The Importance of Warehousing in Business

An outside observer might think business is only about production—producing better products more quickly and in greater numbers. However, those on the inside know that business is much more nuanced than that. Production is important, but there is no sense in producing products if they arrive at their destination damaged or don’t arrive at all. This is the heart of warehouses’ importance to business.

Inventory Management

Warehouses’ primary purpose is to store goods. However, many make the mistake of looking at warehouses as nothing more than a glorified broom closet. While holding your inventory is key, warehouses allow you to manage inventory in several ways.

Inventory Safety

When someone breaks or steals a product before a customer buys it, a company loses the money that they spent producing the product. And if there is one point in production when a product is most prone to being harmed, it’s during the journey from the manufacturing facility to the consumer. This is the period when products are passed from hand to hand or forklift to forklift. Anything can happen if the individuals moving these materials are inexperienced.

Fortunately, those working in warehouses do have the experience necessary to safely package and move materials from point A to point B without damaging them. Additionally, designers typically build warehouses with break-in-resistant materials and equip them with security and remote-monitoring equipment. That way, you can be sure products will be safe from security threats.

Tracking Inventory

As a business, it’s essential to know what you have in stock. Otherwise, your customers will not know what is and isn’t available for purchase. Additionally, being uncertain of your inventory makes your company more prone to sending customers the wrong product, costing your company time, money, and potentially another customer.

Warehouses—especially well-organized warehouses—create an environment that makes it easy for businesses to assess what they have in stock. This information can inform how well certain products are selling to determine how many more they should produce.

Seasonal Rise and Fall

Depending on the business, some products’ sales will ebb and flow depending on the time of year. This can be a logistical and organizational nightmare when you are keeping products in your office space. Warehouses allow you the extra space necessary to house surplus goods. And when the season ends, it provides a good place to store unsold items without interfering with the new items entering production.

Shipping Hub

Order Efficiency

A company’s success hinges on its ability to perform countless functions well, such as production, marketing, and sales. It is often necessary to compartmentalize to perform each individual task well. That includes creating a department dedicated to processing orders for companies. Warehouses provide this service, allowing you to improve your order efficiency and take the strain off other departments.

Loading Docks

Holding goods is not the only service warehouses offer. Many come fitted with a loading dock. Whether your company is handling its own shipping or relying on outside courier services, having a loading dock expedites the process of getting orders from the warehouse and onto waiting freight trucks. It also helps prevent accidents that can potentially harm both your workers and your company’s merchandise.

Types of Warehouses and Their Benefits

While the above factors cover the importance of warehousing in business overall, a warehouse’s role will vary depending on the type of business that employs it. So, to get a better picture of how warehousing can benefit your business, it’s useful to understand how different types of warehouses can benefit a company.

Public Warehouses

The most common type of warehousing available is public warehousing. Typically, the government or a third-party business owns these facilities and allows other groups to rent parts of the space for short or long periods. This is a cost-effective option that is accompanied by additional services such as:

  • Security
  • Inventory tracking
  • Inventory organization
  • Streamlined shipping and delivering
  • Pre-hired staff
  • Insurance on products

Businesses that choose public warehousing are those looking for a convenient, flexible arrangement without the burden of an initial investment or property task.

Private Warehouses

Private warehouses are those owned by the companies that store their goods in them. While they require a good deal more investment between the cost of the building itself, hiring employees, and stocking it with equipment, it offers its own benefits as well. Namely, it allows you to have full control over every part of your storing and shipping process and doesn’t require you to share the space with other businesses.

Cooperative Warehouse

Cooperative warehouses combine traits of both public and private warehouses. Multiple parties own one warehouse and control how it is organized and what they store there. And, since the warehouse ownership is split, the costs of ownership are also greatly reduced. Along with this, the co-op may choose to allow others to rent space within their warehouse to cut operation costs.

Distribution Centers

Distribution centers are designed for the dual purpose of storing and shipping materials. Loading docks come standard in distribution center construction. Also, owners typically organize the interior around storing products for limited periods of time. This maximizes efficiency if you’re using the warehouse primarily to ship things and not for long-term storage solutions.

What To Look for in a Warehouse

With so many options, it is more than possible to choose a warehousing solution that will fit your company’s needs. When deciding on a warehouse, keep these ideas in mind.

Pricing

As mentioned, different warehouse options come with different price points, with public warehouses being the most cost-efficient and public warehouses being the most expensive. Even among public warehouses, price points vary depending on the warehouse’s location and your specific storage needs.

Location

Location determines more than the price of rent for the warehouse. It may also impact your efficiency when it comes to shipping goods. For instance, a warehouse close to a major city, near a highway, or by an airport is easier to ship from than one located away from major cities or roads.

Businesses are multifaceted operations requiring multifaceted solutions—solutions that warehouses offer. If your business wants to ensure its warehouse is running at peak efficiency, Toyota Material Handling is here to meet all your Toyota forklift rental needs.

The Importance of Warehousing in Business