When goods are manufactured, they have to be moved from the point of origin to various destinations for distribution. This involves a network of strategically placed warehouses used for timely delivery of products to the customer. The whole distribution process involves warehousing, inventory management, packaging and transportation. In a decentralized supply chain, management at local warehouses plays a significant role in ensuring goods are delivered to the customer.
Staff at a warehouse understand local factors and upcoming business events. If there is a promotion, for instance, staff are well positioned to play an effective role that is local in nature and ensure success. They can make decisions based on the needs of customers. And the processing of orders is simplified because it is local staff who are in direct contact with customers.
A decentralized warehouse is closely linked to marketing functions in the supply management system. If members of a staff at a regional warehouse are well-trained in inventory management, they can make quick decisions without waiting for decisions from the central management that benefit the business as a whole. It is they who are closer to the problem and actions in a warehouse. So, they understand customers better.
A warehouse characterized by a high throughput must respond quickly to demand. To accomplish that, inventory must be placed closer to the customers. Local managers must be given the powers to control and manage inventory based on local market conditions and distribution needs that are strictly unique to the warehouse.
Local warehouses can reduce the time required to deliver the goods to the customer. When local managers are independent, they can make decisions that result in customer satisfaction. A customer dealing with a warehouse doesn't have to wait for the local staff to contact central management before receiving an answer. Decision and answers to queries are local and instant.