Business Case of Multiple Warehouses

Business Case of Multiple Warehouses

Adding extra warehouses to business provides many benefits such as reducing shipping costs, increasing storage capacity, and having warehouses for specific purposes to simplify overall warehouse management. Multiple warehouses allow you to organize your inventory in a way that helps your business be more effective.

Adding extra warehouses to business provides many benefits such as reducing shipping costs, increasing storage capacity, and having warehouses for specific purposes to simplify overall warehouse management. Multiple warehouses allow you to organize your inventory in a way that helps your business be more effective. You can provide specific products to certain customers in an area by placing a warehouse in that location, or spread out your inventory across the multiple channels to provide the same products to a larger region.

However, the more warehouses you have, the more challenges you may have to deal with. Since warehouses tend to be located far from each other, it becomes challenging to establish real-time collaboration. Messages can be lost or misunderstood, and the lack of direct collaborations can limit organic discussions around refining processes and reorganization.

Examples:

  1. Amazon operates more than 175 fulfillment centers throughout the world.
  2. Hamburger chain McDonald’s has more than 200 Distribution Centers worldwide to supply its more than 38,000 restaurants.
  3. Walmart has more than 150 Distribution Centers in USA, each of which supports 90 to 100 stores in a 150+ mile radius.

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