Retail Logistics: The advantages of a central distribution center
Central Distribution Center
Imagine having all of your products in four or five separate locations. Now imagine trying to get a product from each of those distribution centers to one location. In theory, operating multiple distribution centers doesn’t sound so bad. However, the logistics of running multiple distribution centers or origins for products can become a nightmare. For many, this has always been the way distribution has been, but distribution certainly does not need to stay that way.
One of the best ways to alleviate the logistic nightmares of operating multiple distribution centers is to create a central distribution center. From a single distribution center, you will be able to access all of your products and still be able to ship them where they need to go in a timely manner. A centrally located distribution center allows you to focus more on the important aspects of business, like retail, rather than trying to figure out how to get your products to customers.
Here are a few of the big retail logistics advantages to housing your products in a central distribution center, rather than multiple warehouses.
Accessibility: One of the biggest advantages of having all of your products in one central location means you have easy access whenever you need it. Instead of trying to keep track of which products are where, you know, at all times, where your products are and how to access them.
Transportation: While you might see a slight rise in your inbound transportation costs, the fact that all of your products are in one central location will make shipping your products much more efficient. Yes, sometimes your products will have to travel a little further than they would if you had multiple distribution centers. However, spreading your products throughout multiple distribution centers could mean delays in the shipping of some products over others, potentially leading to customer dissatisfaction. Multiple distribution centers also means there are multiple delivery routes, which can make the logistics of distribution even more congested.
Reporting: Depending on what sort of business you’re in or what sorts of products you offer customers, you need to keep a close eye on what you have in stock. With a central distribution center, creating these types of reports becomes incredibly easy. You only have to go to one source rather than track down multiple reports from multiple distribution centers.
Costs: You’ll save money in the long run since you won’t operate multiple distribution centers. You will also be able to cut down on employee costs because it does not take as much manpower to operate a single facility when compared to multiple centers.
Having a centralized distribution center may not make sense for every company out there. For some, having multiple distribution centers makes sense. However, if you are moving a lot of products and are in a large area, the advantages of having a centralized distribution center could make it the right choice for you and your products.
Interested in learning more? Just give us a call or shoot us an email.