Warehousing involves storing goods, while logistics plans how to transport and ship them to customers. Although they are clearly different concepts, they are equally important for a smooth supply chain operation.
This article highlights the differences between logistics and warehousing. Their comparison should clarify how two separate tasks must be interconnected to manage inventory and serve customers.
Differences Between Logistics and Warehousing
Here are the aspects that make logistics and warehousing operations distinct.
1. Function
The primary function of warehousing is to store raw materials and manufactured products in an enclosed, protected space before distribution. Warehouse staff is also responsible for receiving, picking, and packing items.
Logistics primarily involves transporting products from the warehouse to various locations. This process ensures that ordered items reach their final destination in the most efficient manner possible.
2. Handling
In warehousing, the handle is on the physical control and management of goods received. The staff is responsible for storing goods in the right place and checking their condition while in storage.
They are also in charge of picking and packing the goods properly and correctly. Handling product returns is their responsibility as well.
In logistics, drivers and delivery personnel ensure that packed goods stay safe and in good condition while on transport. Their focus is on the smooth flow of products and timely shipping to meet customer requirements.
3. Types
Warehousing and logistics have different categories to match specific business needs.
For example, warehouses can be:
- Public warehouse: stores goods in a shared facility to maximise space and profit.
- Private warehouse: stores goods of a single retailer or manufacturer, ensuring better control and security.
- Bonded warehouse: stores imported goods licensed by customs authorities.
- Refrigerated warehouse: stores perishable goods in a climate-controlled environment.
Similarly, logistics has several types, including:
- Inbound logistics: movement of goods from suppliers to businesses.
- Outbound logistics: movement of goods from businesses to customers.
- Reverse logistics: movement of goods from customers to businesses (i.e. items for repair, recycling, refurbishing).
- Third-party logistics (3PL): companies that manage inbound, outbound, and reverse logistics operations. Because of its wide operational scope, a 3PL company can provide multiple benefits to its clients.
4. Activities Involved
Warehousing activities include receiving, managing, storing, picking, and packing goods. Logistics deals with order fulfilment, carrier selection, information flow, inventory transportation and security, and distribution network management.
5. Equipment
The types of equipment or tools used are another difference between logistics and warehousing.
For instance, warehouses require racking or shelving systems, inventory management software, forklifts and pallet jacks, and labelling systems to fulfil their duties. Advanced technology, automated vehicles, and robotic picking systems may also be in massive facilities.
On the other hand, logistics relies on various transportation modes (e.g., trucking, shipping, air freight), route optimisation programs, and shipment tracking systems.
6. Cost Management
A warehouse operation maximises profits by managing storage, labour, picking, and packing costs. Logistic companies manage costs primarily by focusing on businesses that hire their services. They reduce expenses through centralised shipping, discounted transport fees, and lower fuel costs.
7. Benefits
Efficient logistics and warehousing offer several advantages to businesses and their customers. Good warehousing benefits clients through space optimisation, better inventory visibility and security, lower business risks, spot stocking, technological advantage, and cost reduction.
On the other hand, good logistics management leads to better inventory control, lower operational costs, risk mitigation, competitive advantage, enhanced supplier relations, and higher customer satisfaction.
Link Between Logistics and Warehousing
Logistics and warehousing are distinct concepts with unique supply chain functions. However, they share a symbiotic relationship, relying on each other for support to deliver results.
Here are the benefits of integrated warehousing and logistics operations.
Better Inventory Tracking and Replenishment
Real-time and accurate inventory tracking is crucial to warehousing and logistics departments. With integrated operations, logistics staff can instantly notify stock replenishment needs after creating transport schedules.
Warehouse personnel receive immediate updates on goods entering and leaving the facility, enabling them to reduce stockouts and optimise space.
Seamless Information Flow and Visibility
Maintaining real-time visibility and sharing data can be challenging when logistics and warehouses operate separately. A lack of coordination may result in inaccuracies and duplicated efforts, leading to wasted resources.
An established link between warehouse and logistic departments can avoid these problems. Their integration provides a comprehensive view of inventory levels and order fulfilment progress.
This transparency also allows warehouse and logistics managers to make quick and informed decisions should issues arise.
Faster Order Preparation and Delivery
Integrated warehousing and logistics operations streamline ordering and delivery processes. Staff can arrange and ship orders correctly and on time.
This synchronisation also improves productivity in both departments, minimises errors, and boosts customer satisfaction.
Efficient Resource Allocation
Aligning warehousing activities with logistics makes it easier to reduce operational costs. For example, staff can consolidate orders from multiple customers to maximise truck space and minimise the number of deliveries needed.
With fewer trucks on the road, fuel consumption and driver expenses become less, too. Synchronising transport schedules also reduces shipping costs and ensures timely delivery.
Look for a Reliable Logistics and Warehousing Partner
There are differences between logistics and warehousing, but they are also inseparable. Businesses with supply chain needs can expect the best results when these two entities work together.
So, if you’re looking for a warehousing and logistics solution, Effective Logistics is here to help. Our company offers storage and order fulfilment services, so you won’t have to communicate with multiple partners. Contact us to learn more.
