Does your business need organized warehousing, or is distribution the current challenge? Let’s have a look at which elements of warehousing and distribution services represent the best combination for your logistics needs.
What is Meant by Warehousing and Distribution?
In a nutshell, warehousing focuses on product storage, whereas distribution refers more the service of getting products to customers.
The reality is, warehousing, particularly through 3PL companies and distribution services share a multitude of similar internal operations and capabilities, yet are distinctly different in terms of their core functions within the supply chain.
Warehousing and distribution services apply to virtually every aspect of moving products throughout the supply chain. Just as there are many different types of businesses, there are just as many types of logistical solutions for moving your products.
How Do Warehousing and Distribution Services Differ?
While each service is capable of moving inventory and storing product, how this process works is unique to each service.
For example, compared to simple distribution, warehousing services concentrate more on storing cargo and inventory for relatively longer periods. Distribution on the other hand focuses more on the predictable and timely flow of products as they move through the supply chain.
As a service, warehousing is part of both types of these logistical functions, but the individual design will favour how inventory is managed. Will products be stockpiled for weeks or months – such as industrial and raw materials? Or does the inventory need to go from manufacturer to end user within days as quickly and efficiently as possible with minimal warehousing – as within the fresh food industry.
Typical 3PL Warehouse Services
Once your business grows to a certain level, outsourcing services in general is part of a solid plan to strategically scale the business and manage growth.
Typical 3PL warehouse functions and value-added services include:
- Long and Short Term Storage
- Product-Specific Environments
- Co-packing & Assembly
- Reverse Logistics
- Quality Checks
- Container De-stuffing
- Custom Packing
- Product Labelling
Different Types of Warehouses
For every segment of industry concerned with physical production, there is a type of warehouse tailored to the storage of those products.
For instance, your business may revolve around the frozen food industry – which would require sub-zero temperature control at every step along your supply chain. Or you may be in the pharmaceuticals sector which again, requires climate control and warehousing that’s certified safe from contamination.
In terms of the types of products handled and environmental controls, warehousing facilities are typically comprised of:
- Ambient Temperature Warehousing
- Temperature Controlled Warehousing
- Cold Storage Spaces
- Freezer Warehousing Spaces
- Industrial and Light-industrial Warehousing.
Types of warehouses are more than just storage facilities for inventory. They’re also categorized by their function within the supply chain. A few examples would include:
- Distribution Centres
- Fulfillment Centres
- Private and Public Warehouses
- Contract Warehouses
- Bonded Warehouses
- Cross-Docking Warehouses
- Cooperative Warehouses
- Hazmat Warehouses
- Reverse Logistics Warehouses
- Government Warehouses
Services Handled by Distribution
While 3PL warehouses are used for storing products and offer additional product handling services, distribution centres also store products as well as other functions such as cross-docking, product mixing, order fulfilment, packaging and more.
Distribution as a service is an essential part of any business large or small. Additionally, distribution’s importance has grown considerably with the trend towards outsourcing in a global economy.
Services offered by distribution providers would include:
- Short Term Storage
- Direct and Indirect Channelling
- Order Fulfilment
- Product Consolidation
- Product De-consolidation
- Cargo Sorting
- Light Manufacturing
Different Types of Distribution
At the top level, distribution systems are defined by the channels they serve. Distribution channels can be short or long and fall into two main categories: direct and indirect, along with various hybridizations of the two.
Let’s look at a couple of examples:
- Direct distribution: In this channel, the manufacturer or producer directly to the consumer. Examples would be local bakeries, breweries, niche operations or small printing businesses. With the advent of e-commerce and it’s ability to serve markets at fractional costs, these types of businesses have flourished over the last few years.
- Indirect Distribution: This channel uses multiple partners or intermediaries to distribute goods and services from seller to customer. Many global consumer companies will not sell direct to public. For example, a large brand-name laundry detergent company requires representation to help get their products to market.
Why Use Warehousing and Distribution Services?
Outsourcing parts of the business process has become an effective way for firms to cut costs. According to a Deloitte report, 59% of businesses surveyed said the reason behind their choice to outsource a business process was to save money.
“In third-party logistics, a company outsources all or much of its operations related to the distribution and logistics to a specialized company. According to a global survey among logistics and supply chain executives which was carried out in July 2021, 63.5 percent of shippers were outsourcing their warehousing activities to 3PL providers.”
Without good management, warehousing and distribution processes can take a toll on businesses in terms of cost. Instead of this aspect weighing down your business, a smart solution is to outsource and streamline these processes by letting the experts handle them.
How Do Outsourced Warehousing and Distribution Services Help Your Business?
By outsourcing warehousing and fulfillment services, businesses adopt a forward-thinking approach that will benefit them in numerous different ways. As a growing company, the pressures of storing and delivering your own products can quickly become expensive and time-consuming. So why not outsource the process to a trusted third party? Here are some reasons you should consider:
- Expertise: Fulfillment and distribution service providers, such as The Brimich Group, give businesses the option of letting experts manage their supply chain. Brimich has a team of experts that handle managed warehouse services and logistics tasks on a daily basis to take care of your organization’s needs. This way you have better service, quicker turn-around, and increased fulfillment rates.
- Technology: To keep up with the competition, businesses must buy and deploy management software to have complete control of the supply chain and logistics. When you partner up with a professional team specializing in inventory and distribution services provider, they’ll have the right technology in place. They will also give you access to data specific to your business so you know exactly where and what is being shipped at any given time.
- Cost-effective: From human resources, software, machinery, to other types of equipment, keeping a warehouse maintained and in order is costly. It’s a significant investment that may not be possible for most small and even medium-sized businesses. With a third-party, you can offset warehousing and logistical distribution services to reduce costs.
Warehousing and distribution, when maximized for effectiveness, also helps improve OTIF shipment ratios. In terms of inventory storage, a well-managed warehousing system also provides significant advantages in the larger sense such as:
- Improved Product Processing: Warehouses often employ capabilities designed to efficiently store, pack and move goods.
- Organized Inventory Management: Centralizing your inventory with the help of WMS equipped warehousing provides a snapshot of where and how much inventory is in the system at any given time.
- Customer Service Agility: Being able to respond to client demands and expectations faster means better overall relationships – especially when errors happen.
- Reduced Risk: Organized warehousing helps buffer rapid price changes in the market. With proper management you can stockpile products in the right quantities and always have a steady supply.
Questions to Ask When Picking a Service Provider
If you’re not familiar with the ins-and-outs that make up a good warehousing or distribution service provider, here are a few points to consider when making your decision:
- How many years have they been in business?
- What kind of industry expertise do they have?
- What storage capacities do they have?
- What types of warehouses do they operate?
- What technology do they employ, and will they give you access to keep track of your inventory and deliveries?
- Does it operate 24/7?
- What safety measures are used and is the storage safe?
- Where are the warehouses located? Are they distributed warehouses or hub and spoke?
- Do they meet all your storage requirements?
- What kind of leasing terms do they have?
Whether your business is facing issues with warehousing and distribution or you’re just looking to cut costs, outsourcing these services to a reliable provider is a great solution.
With operations in both the USA and Canada, Brimich Logistics and Packaging is proud to serve local clients in Southern Ontario including Brantford, Etobicoke and the GTA. For more info, contact the Brimich team today!