Friday, 28 December 2012

How Does a Warehouse Add Value – Part Two

The last thing any business wants is to spend money to store products that remain still for long periods of time. There are ways that warehouses can be used to help speed up the processing of orders and to add value to products increasing profit margins.

1. Hub and Spoke Distributing

warehouse and distributionUsing the hub and spoke concept it is possible to reduce the cost of freight forwarding by using this method to ship large volumes of shipments. It can be used effectively by companies distributing goods to consumers or to the industrial markets. Truckloads can be stored in the hub where it will be turned into smaller loads for distribution and down-streamed on a daily basis. This solution works best for fast moving products and can also act as a storage solution for slower moving goods.

2. Transforming Products

A warehouse can be the point where value adding actions take place. The items are stored in a central location where they are transformed using methods such as light assembly, labelling and customised packing and kitting. This can increase the value of the products and relies upon a managed inventory system.

3. Assembly Orders

Warehouses add value for companies who ship frequently to their customers, sending small orders that require order selection. The goods are stored in the warehouse and picked before being packaged and sent to the customer. The option also allows for value adding opportunities such as labelling and packaging and kitting.

In the final part of the series we shall be focusing on: Crossdocking, Flow Through and Mixing Products.

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