What is the importance of warehousing in integrated supply chain management? Feel free to consider logistics operations performed in warehouses and their benefits for this question. Also explain why firms choose to store their goods even though it is known that storing increases costs and risks.
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Sales and Distribution managment
Sales and Distribution managment
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The majority of enterprises that manufacture items, import goods from other countries, export goods, or transport goods need to have warehouse space. Having a warehouse enables you to exert greater control over your inventory and guarantees that your customers will receive their orders promptly, both of which ultimately lead to an increase in profits.
The process of keeping physical merchandise in preparation for sale or distribution is known as warehousing. Warehouses are utilised by a wide variety of enterprises, the primary purpose of which is to temporarily store things in large quantities until either transporting them to other places or selling them individually to final customers.
The ability to make timely deliveries and achieve optimal distribution through the use of warehouses leads to a rise in labour productivity and a boost in customer satisfaction. The procedure of fulfilling orders is also made more reliable as a result of this improvement. In addition, it prevents your things from being misplaced or stolen while they are being handled.
In a logistical system, the following are some of the most important reasons why warehousing services are necessary:
Administration of Inventory
Processing and packing that is done with more efficiency
Exceptional Service to the Clients
Risk Management
Any company would want to keep their inventory at a certain level to ensure that their production schedule runs smoothly and without interruptions, to meet the needs of their customers in the event that they are wholesalers or retailers, to achieve economies of scale through their operations, to protect their brand image from unpredictability or fluctuating demand, or any combination of these reasons. Some of the reasons for storing inventory are as follows:
Trying to stay away from unknowns
To accommodate both demand and supply
The realisation of economies of scale
Improving delivery
Optimised distribution of goods