Wisdom for Warehousing | The Optimal Role of Warehousing in Supply Chains and Business

Warehousing and Supply Chain Service

One very important area where warehousing adds value in business and supply chains is customer service, including facilitating high inventory availability, shorter response times, value-added services, returns, customization, and consolidation among others. Fill rate is the portion of a customer’s demand satisfiable from on-hand inventory. In most cases, a significant investment in safety stock is required to provide high customer fill rates. That safety stock must be housed somewhere, and that somewhere is a warehouse. Warehouses in close proximity to the customer base and with short internal cycle times help to reduce response times to customers. We have one client that provides same-day delivery of critical service parts. The company accomplishes this with a nationwide network of small warehouses with short order cycle times.

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