On-demand warehousing is becoming a buzzword for commercial real estate worldwide.
Care To Explain?
Picture how many companies have untapped warehousing space and distribution abilities within their own supply chain networks.
What if these are made available for firms in need?
Well, they do not have to commit towards maintaining and building warehouses for the long term, though handling and associated costs are sometimes higher. Nevertheless, warehousing space on demand makes sound business sense to entrepreneurs with a shortage of time.
🔼 Pros
📎 More dynamic and collaborative supply chain ecosystems, enabling quick adaptation to demand fluctuations.
📎 Helps companies/businesses of almost all sizes quickly launch products in the market.
📎 Helps companies initially bypass high-investment conventional warehousing/distribution centres, especially when foraying into newer global markets.
📎 Helps companies overcome common distribution outsourcing issues, i.e. minimum inventory stipulations, longer negotiations, etc.
🔽 Cons
📌 Temporarily high cost structures.
📌 Not always risk-free, hugely dependent on responsiveness, patterns of demand, etc.
📌 Not suitable for every distribution business model.
Take-Aways
On-demand warehousing can supplement conventional distribution, enabling better capacity utilization, benefiting businesses and aiding rapid global expansion.
In one sip, it's supply chain hybridization.