Today, companies of all types and sizes are looking for new options in warehousing so that they are not limited to choosing from just a few massive mega-distribution centers. Some are thinking of switching to streamlined distribution networks that use a combination of regional facilities and smaller forward-stocking locales which are operated by 3rd party providers. Others are choosing to skip the distribution centers all together and are instead sending their goods out directly to their customers from the manufacturer’s plants. The face of warehousing in the 21st century is undergoing dramatic changes indeed. Let’s take a closer look at how warehousing got its start and what it has transformed into today.
How Warehousing Has Evolved
Warehouses have been in existence for centuries. It was early European explorers who began shipping goods between countries who established large warehouses located at shipping ports. These early facilities were used for the storage of goods before sending the items along shipping and trade routes to their final destinations in countries outside Europe. When railways were later built, cross-country travel ensued and rail warehouses were set up.
With time, warehouses were built in more convenient locations which were closer to the final destinations of the goods. At the turn of the 20th century in the United States, there was significant growth in commercial warehouses as the government placed restrictions on railroad operations. By mid-century, a great change took place in American warehousing due to mass production of goods as more and more products needed to be stored and inventoried in the most efficient manner possible.
Today’s high-tech warehouses are also called distribution centers and they are an integral part of the complete business to business supply chain. In addition to just storing goods, modern warehouses have other functions which includes acting as call centers and 3rd party logistics providers. Some warehouses use a unique mix of materials handling, information and automatic data collection technology so as to become one of the hybrids of the 21st century warehousing industry.
As Companies Grow, They Often Need to Outsource
A successful company under expansion that originally used a distributor and sub-distributers often finds that its distribution model no longer works. Instead of building their own warehouse, the company may opt to outsource to a 3rd party provider that can offer it a warehouse-to-door solution to move its merchandise. This type of 3rd party provider called a distribution center often handles all of a company’s logistic needs including transportation, custom warehousing, inventory control and distribution of its products.
The end goal of a modern-day distribution center is to meet all of its customer’s warehousing and logistics needs to improve its return-on-investment (ROI) by bundling services into responsive solutions. The face of warehousing has changed dramatically over the past few years and is most likely to undergo even more refinement in the decades to come.
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Peter Moore writes about business and technology.