The importance of warehouses in business are:
(i) Central Location for Storage: Location must be prioritised while choosing a warehouse for your company because the production gap and movement of goods from one place to another is reduced significantly. Also distributing the goods to warehouses, warehouses to customers becomes easy when the location is favourable to all the departments. For example, a warehouse which is located in the centre of the city is very advantageous to the shipper in moving the goods from one place to another and helps in delivery of goods to the customer in time.
(ii) Improved Order Processing: Timely delivery of the goods to customers is the basic goal of any company in the world. To achieve this, warehouses play an important role. Availability of a warehouse gives you the upper hand in storing the goods and products, ready and safe and also available to move at any time. This allows the shipper to deliver the goods to the customer immediately when he places an order. This reduces the movement time more and the order is made in time. Loss of customers and business due to late delivery is avoided by the help of warehouses.
(iii) Extra Space: Even though you have your own warehouse, to match up the demand and when you increase your production, you will need an extra space. Thus, warehouses provide you an advantage during busy times. You can store your goods by giving a storage fee to the warehouse until your customer starts ordering your goods.
(iv) Improved Production Quality: Basically, the quantity of goods is monitored by warehouses. Adding a point extra, by an effective tracking system, working along with suppliers and other participants, you can regulate and monitor the quality of raw materials and finished goods. This can be possible by identifying and isolating the defective ones during storage and production and making necessary adjustments, which helps in improving the standard of the final product.
(v) Risk Management: Rise in prices or price fluctuations are common in any type of business. This mainly happens when the supply is more than the required demand which incurs huge losses to the company. Warehouses can be efficient and helpful during these times, where you can store your goods when there is less demand and sell it in the market when the demand arises, thus improving the profit margin of the company. Not only for normal goods, you can also perishable goods thus avoiding damage and wastage of products.
(vi) Task Delegation: You can manage the company by making production, sales and marketing, inventory, transportation and customer satisfaction on your own. With the warehouse option available you can divide your work and responsibilities among your company staff which saves you from spending too much money and time and each one the employees can look into their work effectively.
(vii) Faster Shipping and Delivery: Customers expect delivery on time irrespective of any factors. To achieve this, warehouses help in making the deliveries on time by providing a list of goods available to ship and goods to be kept in stock.
(viii) Safety for Products: Warehouses have highly specified security measures and close monitoring of goods stored, which ensures the safety of your products from theft, damage and also from natural calamities as warehouses are built effectively to withstand all those disasters, fire accidents and other man-made disasters included.
