/ By Karan Mudliar / Blog • Uncategorized/ • / 2 Comments

The Difference Between Cross-docking and Warehousing

In any distribution and fulfilment chain, warehousing is a large component and a costly proposition. In a distribution process, typically there is an incoming transport, and from there the goods are received and stored in a warehouse, and then again picked up for loading on to the outgoing transport bound for the desired destination. You incur charges for warehousing, and the process chain is lengthy.

 

What if you could eliminate the warehousing bit entirely, and just manage things cleverly so that the incoming goods already have their clients or destinations marked, and the logistics provider could pick up the goods and load them directly to the appropriate outgoing transport? It would completely eliminate the warehousing step, wouldn’t it?

 

The answer is yes, it is possible, and it is called cross-docking.

 

How is cross-docking different from traditional warehousing?

 

Cross-docking involves direct offloading and re-loading. The warehouse part is eliminated. But how’s it different from a process perspective, with respect to traditional warehousing?

In cross-docking the client is required to be pre-mapped to the incoming goods. And you need the services of a Third Party Logistics (3PL) Provider to manage the process of identifying the correct outgoing transport, and moving the goods directly from incoming to outgoing transport. The distributor has to manage multiple relationships with different agencies for picking, warehousing, and transporting. In the case of cross-docking, there are third party logistics (3PL) providers who will handle everything for you. This marks the major difference between cross-docking and warehousing.

 

The advantages of Cross-Docking over Warehousing

 

Advantage 1:  Cost Reduction

 

As we mentioned at the beginning of this post, storing goods in a warehouse is costly. Warehouse rental costs can deliver an unpleasant shock, and should be minimized. In cross-docking you are eliminating or minimising the storing period, and therefore saving on the steep costs of warehousing.

 

Advantage 2: Improved Efficiency

 

In traditional warehousing, there are multiple parties involved in the process chain, like trucking partners, logistics partners, and parcel delivery. In cross-docking, you can do away with multiple partners and do with a single 3PL who can handle things end-to-end.

 

Advantage 3: Increased Reliability of Delivery

 

Since Cross-docking involves fewer human hands needed to handle the products, the risk of damage and human errors is minimized and this improves the prospects of receiving the products in good conditions and on time. Elimination of the warehousing step also improves the speed of delivery.

 

Advantage 4: Reduced Inventory

 

Since the stock is picked and directly shipped out to the clients, the inventory pileup in the warehouse is reduced, and this naturally translates to moving towards just in time inventory models which benefit everyone in the chain.

 

What’s right for me – cross-docking or warehousing?

 

Now we come to the all-important question: Should you adopt cross-docking? Is it suitable for your business? There are a few criteria which can be used, to answer this question very easily.

 

– Are you willing to invest the higher management attention and planning that cross-docking takes, as compared to warehousing?

 

– Do you have sufficiently large volumes that make cross-docking effective? Cross-docking is not efficient at low volume levels.

 

– Are you able to undergo the long lead time and capex needed to construct the cross-docking terminal structures?

 

– Are the products you are receiving, customer-ready? Or do they require further processing before they can be shipped to customers?

 

If your answer to the above questions is ‘yes’, then cross-docking is the way forward for you. Go right ahead!

 

 

Warehouse, Pick and Packing
/ By Karan Mudliar / Blog • Uncategorized/ • / 0 Comments

How is Pick and Pack Distribution Beneficial?

When you have to fulfil customer orders for products, often you might have to assemble a set of items together before shipping the complete package to your customer. Pick and Pack Distribution refers to the process where you receive the multiple components at a warehouse, and there they picked and assembled together by the warehouse staff, and then packaged and shipped to the relevant customers.

 

If you don’t use pick and pack distribution process, then the option for you is to set up your own assembly area, employ staff to receive, store and repackage the goods, and then send them out.

 

Both systems of working have their advantages and disadvantages, depending on various factors like the size of the business you are running, kind of products you are selling, what kinds of clients you serve, and so on.

 

Let us look at these aspects, in order to help you take a decision on what kind of distribution system you want to employ.

 

 

Pick and Pack: The Basics

Receiving the goods from different suppliers and storing them in a warehouse is an involved job that sorts and stores items in order to best utilize the warehouse space and logistics. Usually warehouses are shared between multiple businesses. There are different zones for storing items, according to their size classification – like full pallet, half pallet, case, individual item, etc.

 

A warehouse service provider receives goods meant for different businesses and stores them in the most efficient way possible. In the case of Pick and Pack Distribution, the warehouse staff receive the orders, then pick the items from the respective storage areas, assemble and package them, before sending them out.

 

Often, the orders are assembled by picking the goods belonging to different companies, as the final product to be shipped might be a composite one.

 

What are the Advantages of Pick and Pack?

 

  • Cost-effectiveness: Pick and Pack system is cost-effective because the warehouse space is shared and the overheads are distributed between multiple business; plus, the process involves no minimum order sizes and can be extremely flexible. Also, the business can avoid the cost and lead time of setting up their own assembly area and the corresponding staffing.

 

  • Efficiency: It is more efficient to store and assemble the orders from a single location as it reduces the transport and the different agencies involved in reshipping.

 

  • Agile and swift: Pick and Pack is a highly flexible and agile system, as we have seen, because of the elimination of redundant steps in the supply-chain, and is therefore quick and ensures shorter turnaround times for the end to end process.

 

So- what’s the recommendation for me, then?

 

Having understood the benefits offered by Pick and Pack, you need to evaluate whether your business will benefit from these efficiencies; and make a choice depending on the business model and processes that you employ. For example, if your final shipped packages are comprised of one or two items only, then it might be better for you to pack and dispatch them yourself. At the other extreme if your end package is extremely complex, requiring specialized knowledge to assemble it, then again it might be better for you to choose another method.

 

Another consideration for you to bear in mind is whether you enjoy the services of an efficient third-party logistics provider who can provide you these services. Because, Pick and Pack is great if done right, but can be horribly messy if it is in the wrong hands!

 

But if you need to harvest the benefits of efficient warehousing and outsourced product packaging and shipping, then Pick and Pack is the way forward for you. So, take your call, and be on your way to greater efficiencies!

 

 

 

 

 

 

 

 

Inventory Management
/ By Karan Mudliar / Blog • Uncategorized/ • • • / 0 Comments

The Basics of Inventory Management: Warehousing, Picking, Packing and Shipping

Small businesses need to understand a simple strategy that concerns establishing coherence between customer demands and the existing supplies. More often than not, startups and even medium-sized enterprises fall short of resources— which in turn sabotages their credibility. While manufacturing is never really an issue with technological innovations at the helm, it is the product distribution that takes a beating.

 

Major issues include inadequacies related to product picking, packing and shipping. In addition to that, certain businesses also find it hard to store their products in an efficient manner. However, if businesses continue worrying about these aspects of inventory management, it becomes hard for them to grow and even outrun the competition. Moreover, delayed shipments can easily kill off the customer satisfaction levels with companies failing to deliver products on time.

 

There are several firms which readily outsource the pick and pack services— in order to save time and even overhead costs. Pick and Pack warehousing is a comparatively newer aspect that combines the essentials of product storage with excellent shipping services. Companies that worry about storing their products in a secured environment are better off hiring 3PL service providers which emphasize on Pick and Pack warehousing. While it easily mitigates the storage constraints, a host of other benefits are also available for businesses to leverage.

 

Meeting Customer Demands

 

Having specialized warehousing services at the helm can help enterprises meet varied customer requirements. Once a business starts blossoming and growing rapidly, it becomes important to stay on track with the persistent user preferences. This is where outsourcing comes in handy, especially by offering excellent Pick and Pack storage and distribution services to the concerned organizations.

 

Fulfilling the Storage Requirements

 

Before we delve any deeper into the basics of Pick and Pack services, it is important to understand the influence of outsourcing in regards to handling the storage needs. Manufacturing industries usually need to ship extensively and having a restricted storage space can actually slow them down. While it is always possible to hire specialized warehousing services, most companies look for cohesive options that can cover multiple bases. Having one logistics company handle the basics of storage, picking, packing and shipping can be the best possible option when the manufacturer is looking to minimize the costs.

 

Efficient, off-site warehousing is one aspect of this cohesive program that allows an enterprise to manage inventory without opting for contract or distribution warehouses. Online warehouse management is also possible. Unlike other warehouses that solely offer storage options, facilities synonymous to the Pick and Pack management believe in dispatching the products, almost instantly. To be exact, enterprises can enjoy the benefits of a dynamic storage system where products aren’t dumped for an eternity but are expedited immediately.

 

Understanding Picking and Packing Better

 

Unlike conventional warehouses that offer storage facilities, managerial flexibilities and a host of other features, enterprises relying on Pick and Pack services are best served when it comes to the holistic catalogue of services. These include a variety of Inbound and Outbound services, dedicated towards amplifying the revenues and serving the customers better.

The best part about using Pick and Pack Distribution is that a shared warehouse can serve the purpose for multiple organizations. The products are then immediately packed and distributed to the concerned customer base. As we could already infer from the discussion, this form of inventory management is affordable and exceedingly cost-effective. With small businesses using Pick and Pack services rather extensively, the popularity seems to be validated.

 

In addition to that, outsourced pick and pack services also assist manufacturers with their inventory solutions. Firstly, the designed warehouses managed by these specialized 3PL service providers are organized and extremely efficient. Apart from that, they offer advanced inventory management solutions like stock replenishment and necessary intimations. As the part of a holistic cycle, these solutions also involve picking up manufactured products from the companies, storing them in bespoke warehouses, packing them accordingly and finally, shipping them across multiple channels.

 

Bottom-Line

 

An inventory-specific business model requires higher levels of cohesion between warehousing, packaging and distribution. While hiring a 3rd party fulfillment service for the specifics is a good option, pick and pack service providers are actually best suited for a retail-specific business. This form of inventory management works wonders for small to medium business owners, thereby helping them save additional costs and efforts.

 

 

Warehouse 3pl
/ By Karan Mudliar / Blog • Uncategorized/ • • / 0 Comments

How Outsourcing Impacts Warehousing, Distribution and Packaging Services?

Running a company is a time-consuming affair— regardless of the involved manpower and existing technologies. Despite the operations being tedious and stressful, it is important for the companies to abide by the federal guidelines when it comes to the quality of products. Manufacturers, therefore, are responsible when it comes to the quality standards and there are times when addressing the aspects of warehousing, packaging and distribution becomes nearly impossible. In this keenly contested arena, it is always advisable to outsource certain services by hiring experienced professionals. A good logistics company can therefore do the trick for the entrepreneurs, assisting them with some of the trickier aspects of retail.

Outsourcing Warehouse Services: Enumerating the Benefits

Maintaining a sizeable warehouse space is difficult, especially for companies that are already manufacturing the products. While constructing personalized storage facilities can incur massive costs, hiring specialized services from logistics companies of repute is always a better option. Needless to say, a startup or even a medium-sized firm cannot afford to spend recklessly on building and operating a bespoke warehouse. Therefore, outsourcing warehouse services is one of the most efficient techniques to grow bigger in this competitive market.

That said, an outsourced warehouse usually functions on a contractual basis which simplifies things further for the manufacturers. Shared storage facilities are quite common as the warehouse expenses are then distributed among select manufactures. A large warehouse offers a host of amenities and multiple small businesses can make the best use of the same without paying up exorbitant rates.

Why Packaging Services Need to be outsourced?

Ecommerce Warehouse

In the modern era, product packaging is more of a compulsion and less of a choice. The entire process is a highly regulated marketing charade that influences a product’s state of well-being. It is necessary that manufacturers opt for the most appropriate form of packaging based on the product and its longevity. Then again, it gets extremely hard for the manufacturers to plan out the packaging strategies, all by themselves. This is why companies need to hire specialized 3PL service providers for outsourcing their packaging requirements. One must understand that packaging is a highly technical process and should only be handled by specialists.

Is it Important to Outsource Distribution Services?

Warehouse Distribution , Logistics 3PL

Put simply, the answer to the question asked would definitely be a big ‘Yes’. For manufacturers to grow their business, it is important for them to cater to diverse customer bases. However, a lot of planning is involved when it comes to making the products available to the customers, via offline and online retail chains. Outsourcing distribution services can help as logistics companies maintain sizeable fleets of dispatchers and skilled drivers, helping the manufacturers with the outreach. While it is important to manufacture a quality product, making it available within a competitive marketplace is what solidifies the position of the concerned brand. Customers will keep purchasing only if the product is delivered to them with care. Proper packaging, as mentioned previously, is an important aspect, synonymous to distribution centers.

The Concept of Outsourcing

Entrepreneurs prefer maximizing revenues without having to invest a lot. For this to materialize, they should take strategic decisions involving qualified 3PL service providers. Product manufacturers already have their hands full and it is therefore necessary that they rely on 3rd party fulfillment services for handling warehousing, distribution and even packaging.

While packaging is essentially a technical aspect, most 3PL service providers basically concentrate on warehousing and distribution for serving the manufacturers better. For a business to grow, it needs to gain competitive advantage as a startup. Outsourcing can eventually simplify the entire process of growth by offering best-in-class benefits to the concerned organization. The good thing about hiring third party services is that the storage facilities and distribution warehouses offered by them are closer to the client base. As outsourcing is mostly a contractual process, it becomes all the more important for the logistics company to offer the best set of services for the existing price point. This approach makes the retail sector extremely scalable.

Bottom Line

Based on a reliable study i.e. The State of Logistics Outsourcing, 2007— at least 69 percent of companies across the globe rely on third party logistics for handling warehousing and distribution services and a majority could already measure the return on investment, synonymous to these services.

Outsourcing isn’t a complicated process when it comes to the implementation. However, the perfect service provider must be zeroed in, based on a company’s manufacturing and marketing requirements.

Warehouse Distribution , Logistics 3PL
/ By Karan Mudliar / Blog • Uncategorized/ • / 1 Comment

How Distribution Warehousing via 3PL Services Improve the Market Conditions?

Enterprises focusing solely on the retail sector usually have a lot of things to worry about. While direct sales can be initiated via contract and owned warehouses, certain companies prefer third party logistics companies for distributing their products, in an efficient manner. The concept of Distribution Warehouse takes us back to the time when product distribution used to happen via retail outlets. Manufacturers would first assemble or create a product and then send over the same to shops for retail purposes. However, with a massive increase in product volume and amplified online exposure, it became imperative for the manufacturers to opt for a second line of defense.

Distribution Warehouse signifies a facility that is dedicated towards storing manufacturer’s product before the same is packed and distributed to the retail customers. The concept of Distribution warehouse actually brings the distributor into the picture, in addition to the manufacturer and customer. Not just product distribution, these warehouses also assist companies with pick & pack and efficient order fulfillment.

How Holistic is a Distribution Warehouse?

Unlike a logistics company that offers warehouses for sale and even on lease, a distribution warehouse is the brainchild of product distributors who act as the connecting link between manufacturers and retail customers. However, when it comes to reaping the benefits, every section of the sales funnel is taken into account.

For the manufacturers, distribution warehouse is a blessing in disguise. While the profit share gets compromised to a certain extent with distributors taking their cut, the flexibility on offer certainly outweighs this minor pitfall. These warehouses have also improved the market condition for third party distributors as they are the ones who invest money, workforce and time in order to amplify the storage options for manufacturers.

The last cog in this retail-centric wheel happens to be the retail outlets. With distribution warehouses supplying products to the offline and online retail stores, the credibility quotient is always maintained. The retail stores directly place product requirements and requests to these warehouses and stocks are released upon the availability.

Therefore, a distribution warehouse impacts every part of the sales funnel and comes forth as an integral part of the overall, entrepreneurial logistics arrangement.

Advantages on Offer

Distribution warehouses actually cut the clutter and simply things for the manufacturers and customers alike. Put simply, a product goes straight into a warehouse after it’s manufactured. The workers, synonymous to the distribution warehouse, pack and expedite the products via reliable courier services. Not just the mentioned perk but a distribution warehouse usually has a host of functional advantages.

  1. Timeliness

It is the duty of distributors to pack and dispatch products to customers and even select offline retailers. Most of these facilities are equipped with warehouse storage systems which keep a track of products and their desired dispatch points. Overall, the distribution warehouse offers a cohesive outlook to how the products are stored and how they need to be dispatched. This organized approach saves a lot of effort and even time— especially when the workers are concerned.

  1. Budget Friendliness
Cost friendly Logistics
Forklift with cardboxes on calculator. Calculation of shipping delivery costs concept. 3d illustration

The best part of having a distribution warehouse is that products are stored in a secured environment. Be it inclement weather conditions or the influx of rodents, a properly managed distribution warehouse is probably the best possible solution for storing the manufactured goods. This eventually cuts additional costs and the retail chains get the products in the best possible condition. Specialized packing and management services within the warehouse help amplify the revenue generation process. Be it temperature-specific storage units or something on the lines of a cold storage system— a distribution warehouse is loaded with technological innovations, precisely for preserving the condition and quality of products. This approach minimizes product damages and therefore reduces additional overhead costs.

  1. Reliability

More than the sales figures, it is the peace of mind that excites a manufacturer. While sending out products for retail purposes is quite a taxing job, distribution warehouses simplify things for the manufacturers. Since the products are sheltered in an organized and secured place, manufacturers are well assured that their business will move forward.

Bottom-Line

A distribution warehouse is probably the most important link between demand and supply chain management. Moreover, with an increase in the number of manufactures and retail products, it literally becomes inevitable to have a storage facility solely dedicated towards distribution. However, warehouse safety and management standards must also be looked at before moving ahead with any 3PL service provider.