Within a grocer market, warehouse distribution management services or third party services can offer some distinct advantages. In a recent study, grocers using distribution fulfillment services indicated that the important business factors when choosing to utilize a warehousing company were: service requirements and subsequent response times, quality of management, and businesses that have integrity and solid ethics. Low costs and value-added services were also mentioned and cited for reasons that distinguish warehousing companies.
The benefits of using distribution fulfillment services as ranked by manufacturers, wholesalers, and retailers are as follows:
1. Response time and specific warehousing logistics needs as an ability of the service provider. Having more responsiveness for the individual marketplace can be attained through flexibility on the part of the warehousing services providers.
2. Management Quality: Being very familiar with the often changing logistics marketplace is a requirement for any distribution fulfillment services due to the nature of needing to be very specialized related to anything warehousing.
3. Companies also cited the excellent track record of ethical performance as an important criterion when choosing to use a distribution fulfillment services.
4. Kitting and light assembly as examples of value added warehouse services can be performed by the logistics services provider when arranged as a part of the services offering and can create some major advantages for both parties.
5. Costs of warehouse logistics is decreased by using a distribution fulfillment service. The absence of costs associated with capital expenditures for warehousing space and the procurement of real property is significant.
6. A specialized warehousing and logistics company, especially a regional one, is much more versed in the channels of transportation in the market area. Reducing the transportation costs for utilizing these regionally based warehouse providers can also be reduced through negotiation based on overall volume processed.
7. Streamlining the process for product flow to encourage efficiency and a smooth flow can be done using the market specific knowledge and specialization of logistics and warehousing.
8. The working relationships built with the warehousing and logistics service will add to the functional dynamic of the local business.
9. The warehouse company assumes some of the associated risk with the warehousing and shipping of perishable goods and the costs thereof.
10. State-of-the-art warehousing technologies should be a strong part of any distribution fulfillment services investment portfolio. The reduction in cost for the client is significant when leveraging this technology for procurement or costs associated with obtaining this technology independently.
Further responses to preferences of the size and scope of the distribution fulfillment service chosen reveal that while national warehousing providers are preferred when a client wants to consolidate services, the warehousing consultants and logistical service providers most often prefer the regional distribution fulfillment service. The research that has been mentioned so far includes these findings. To be closer to the mission of their clients, regional warehousing companies with a local reach can provide flexibility and added responsiveness to local considerations.
