The Benefits And Challenges Of Multiple Warehouse Management

Avatar When your customers span several geographic regions, it makes sense to have more than a single warehouse. There are limits to what can be done with smart routing of shipments from a single warehouse. In the end, delivery times to remote locations will suffer and customers won't be happy.

The Benefits Of Multiple Warehouses

Multiple warehouses make sense because each can service customers in a specific region with faster delivery times. They also reduce transportation costs because shipments cover shorter distances. Reduced transportation costs translates to reduced prices for the customer which make your products more competitive.

Multiple warehouses also mean that all of your eggs aren't placed in one basket. Should a natural disaster or fire strike one warehouse, your entire inventory isn't wiped out in a single stroke. Coping with the loss of a single warehouse isn't easy, but at least your business can continue.

The Challenges Of Multiple Warehouses

Many of the challenges of managing a single warehouse are amplified when managing several warehouses. The classic problem of balancing the need to have enough inventory to avoid stockouts vs avoiding expensive inventory bloat becomes more difficult. The safety stock in each warehouse must be sized to meet the variable demand for the region that it services. This almost always means an increase in the total safety stock overall.

Another problem of multiple warehouse management is the "out of sight, out of mind" syndrome. This occurs when difficulties at one warehouse location causes you to focus too much attention there at the expense of the other warehouses. Sometimes the cause may be its close proximity. Managers tend to focus too much on the warehouse closest to them because they are more familiar with its day to day operations than they are with remote warehouses located hundreds of miles away.

When real time information flow of inventory status doesn't exist, there is a danger of selling products that don't exist. This can happen when records don't immediately update when inventory has been sold. This problem is common enough when management is limited to a single warehouse. However, it can be an even greater nightmare when managing several widely separated warehouses. Lack of real time information flow also limits the amount of coordination possible among several warehouses. Without coordination, the movement of inventory between warehouses becomes very difficult.

Managing multiple warehouses has its benefits and challenges. A good warehouse management system prevents the challenges from overwhelming the benefits. Make sure that servicing more regions means more profits rather than more problems by using the right warehouse management system. Contact us today for more information.

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