Types of warehousing and distribution services

Every business is looking for cost-effective and time-sensitive solutions to store, prepare and track items and products. Therefore before looking for a type of warehousing and distribution services, you might need to understand which one you exactly need.

Below is the kind of warehouse services that we provide:

  1. Fixed-cost and variable cost warehousing: There are four categories of warehouse costs including handling, storage, operations administration and general administrative expenses. Handling costs are those expenses involved in the movement of products in or out of the warehouse including the labor — receiving, put-away, order selection and loading. This kind of cost may include re-warehouse, repackage or refurbish damaged product.

Apart from fixed-cost warehousing, there is variable cost warehousing where costs vary depending on a number of factors including type, size and nature of products and duration of storage.

Fixed costs warehousing comes in handy because in some cases, costs may vary from one service to another based on different aspects and factors. For instance, costs may vary when you need to do some improvements in productivity. For instance, the cost may vary when the operator decides to increase the number of units moved without increasing labor. This action may lead to a higher number of units handled per hour.

Additionally, the number of units handled per given hour may vary when there are some changes in inventory, storage layout or equipment. This may also lead to variation of costs. Fixed costs are also influenced always by the rate of utilization. For instance, cost per unit may increase when a distribution center is not utilized. The rate of utilization is actually the primary risk in the controlling of costs because other variable costs such as labor may not be as flexible as they seem.

Additionally, another risk factor that may determine variable costs is errors. When mistakes are made, they may result in product damage and errors or shipping errors.

  1. Warehouse Management Systems (WMS): The system is located on each and every site and warehouse facility managed by a company and it will track and report on every aspect of the warehousing and distribution activities on real-time basis. Some of the features and capability include the receipt, stocking, picking/packing and shipping EDI messages. Other features and capabilities include bar coding, scanning, serial/lot tracking, FIFO/LIFO or two of them, EDI connectivity, ability to handle different units of measure, automated web-based pull order requests, and customized reporting.
  2. 3rd Party Logistics: 3rd Party logistics include warehouse services, distribution services, cross-docking, inventory management, and packaging and transportation services. These can be tailored to meet different needs on the market conditions and delivery requirements depending on the products involved.
  3. Vendor/supplier managed inventory (VMI/SMI): Inventory management will help you to minimize costs and overheads so that you can optimize supply and chain performance and maximize margins with strengths. This include among other things tighter supplier management, improved working capital, disruption avoidance, reduced lead times, enhanced flexibility and responsiveness, real-time visibility and control reporting.

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