There are many different theories and techniques when it comes to retail logistics and distribution. Companies can choose between operating one centrally located distribution center and operating multiple distribution centers throughout a region or country. There is plenty of debate regarding which is most efficient and effective. Ultimately, it all comes down to how much product you are shipping and where you are shipping. Depending on these factors, one of the two models is probably more appropriate for you and your business than the other.
Imagine trying to get your product to the middle of Texas when your single distribution center is located in New York. While the product would eventually get there, would you lose anything by having it take so long? When you have multiple distribution centers, there are clear advantages that will help your business in the long run. From saving on transportation costs to making customers happy, the use of multiple distribution centers just makes sense.
Here are a few of the advantages you will find by using multiple distribution centers.
- Quick Delivery: With multiple points of distribution, delivery time can be cut down pretty dramatically, which means you can move more product at a quicker pace. Instead of customers waiting for products to arrive from one central distribution center, orders will be shipped quickly from various centers to nearby addresses, meaning products arrive quickly.
- Low Transportation Costs: Because products will be spread out over a larger area when you use multiple distribution centers, the cost of delivering an order can significantly decrease.
- Easy Access: Instead of having your products only in one place, they will be in multiple places, which means if you need something for display, in a retail center, or need to get it to a customer, the entire process becomes much easier. Having your products spread out means having easy access at multiple points rather than one location.
- Multiple Inventories: When you have just one distribution center, even if it is centrally located, you only have one inventory. By spreading your inventory out over multiple distribution centers, it seems as if you actually have multiple inventories, which will serve as a sort of back-up system for when one location runs out of a particular product that you need to ship.
The advantages of having multiple distribution centers go well beyond what is listed above. With the right shipping methods and logistics, having multiple distribution centers can save you money, time, and allow you and your business to function much more efficiently.
Of course, other companies may find more advantages to a central distribution center.