When it comes to warehousing and distribution, there are two primary strategies that businesses employ: separate and integrated. When they are managed separately, the business either utilizes another company or a separate facility to store their stock and another to handle distribution. When they are integrated, the business either handles their own warehousing and distribution out of a single location or contracts with a 3rd-party logistics provider (3PL) to handle both services.
Integrating your warehousing and distribution services can lead to greater efficiency, cost savings and many other benefits for your business.
Increased efficiency & lead times
Integrated warehousing and distribution services are simply more efficient and streamlined than when they are managed separately. Integrated operations communicate with one another more quickly. When an order comes in to a warehouse, the employees who oversee the fulfilling and shipping of that order are ready and prepared to pick, pack and ship it. When the services are kept separate, the process is much more convoluted and time-consuming.
In an industry where timely deliveries are a must, an integrated service is a must for shippers. Lead times are reduced because there are fewer links in the supply chain. There is less back and forth and more streamlined communication.
The efficiency itself brought by integrated solutions leads to a reduction in operating costs, but there are also other ways in which integrated services can decrease storage and fulfillment costs. When warehousing and distribution are integrated, there are fewer resources utilized to fulfill the services. Shippers devote less resources (property, manpower, etc.) to managing these processes.
When the services are managed separately, there are two points of contact (one at the warehouse and one at the distributor), resulting in more time required to manage the external services. These administrative costs can build up over time. If the shipper is using two companies — one to manage each service — there are also two entities to maintain contact with, two invoices to process, etc. It is simply more cost-effective to integrate the two services and use a single company to manage them.
When a business works with multiple companies who only specialize in a single service (warehousing, distribution, etc.), there is little to no potential for customizable solutions. The warehousing provider and the distribution provider are typically not going to coordinate with one another to deliver complex services that are customized to the shipper’s needs. When you work with a single integrated logistics solutions provider, the company can take a more holistic approach to your supply chain. This allows them to customize a solution that better serves your needs and those of your customers. This all-in-one service simplifies, rather than complicates the supply chain.
Customized solutions can even include offerings like cGMP-compliant temperature sensitive warehousing and distribution, a requirement for some commodities and companies. Ideally shippers would not need to search out different providers who offer standard warehousing, temperature-sensitive warehousing, distribution of standard products and distribution of temperature-sensitive products. When it is all handled by a single provider, the supply chain becomes more efficient and cost-effective.
The easy choice: integrating with the right partner
Integrating your warehousing and distribution services has many benefits for your business, but so does choosing the right logistics partner. At King Solutions, we provide all-encompassing, best-in-class logistics services that are specially tailored to your shipping, warehousing and fulfillment needs. Ready to talk logistics solutions for your business? So are we. Contact me today.