Your search results

What is a buffer storage warehouse and why do companies need it?

Posted by oleg on 05.01.2021
| 0
What is a buffer storage warehouse and why do companies need it?

The fall and winter are the most difficult periods for retailers, distributors, online stores to manage logistics operations. At the time, companies needed to prepare seasonal products, holiday assortments. Moreover, they should forecast sales demand by tracking warehousing stocks. A company loses profit and can’t deal with increased loads, when it doesn’t control market swings. 

Entrepreneurs should purchase products and move them to store in a warehouse in advance. That’s how a company can prepare itself to overcome peak loads. However, it often happens that there is no free warehouse space to store stocks. In this article, we explore what buffer storage is, analyze demand on temporary storage warehouses in Ukraine.

What is a buffer warehouse?

The logistics means not just transportation from point A to point B. It’s the art of managing material flows and demand forecasting. All of this meshes with the lean manufacturing philosophy, which first began to be used in Toyota’s factories. 

Lean manufacturing is the vision of how to manage an enterprise without any losses. When a company has no enough supplies to meet customer demand, it loses profit. 

In this way, buffer stocks are produced at the last manufacturing stage. Companies use additional supplies to meet customers’ requirements in case of rapidly growing demand. 

However, buffer stocks storage time can range from several weeks to several months. For example, large national retailers begin to purchase additional consignment stock for holiday sales early as the fall. All the time, they need to store stocks in warehouses. Commonly, there is not enough storage space for stocks, so companies rent additional pallet positions. Thus, a buffer warehouse is a premise to store stocks temporarily.

What is a buffer storage warehouse and why do companies need it? - 2

What companies need buffer storage services

Buffer storage is a service for companies, which are related to customer demand. Generally, they are: 

  • Manufacturers. 
  • Importers and exporters. 
  • Distributors. 
  • Retailers. 
  • eCommerce. 

COVID-19 pandemic has shown a lot of companies why it’s so important to keep buffer stocks. In the spring, 2020, before quarantine restrictions were provided, customer demand started to range in all countries. So, customers have buyed up food and essential goods. Retailers couldn’t purchase products so fast, and there was a deficit on store shelves. 

In the summer, 2020, epidemiologists started talking about a new wave of the lockdown. A lot of companies have begun to keep buffer stocks. For example, in August, the Polish edition Eurologistics reported that temporary storage warehouses demand was growing. Buffer storage was the most popular service among importers from China, manufacturers, cleaning materials distributors, and online stores. 

Deferred demand is one more great case of why companies need buffer warehouses. A lot of customers buy products as a reserve. For example, it may be seasonal vegetables or durable goods (household chemicals, hygiene items, etc). The demand for such goods beats up and down.

What is a buffer storage warehouse and why do companies need it? - 3

Buffer warehouses in Ukraine: how to seek and where to rent

Demand for buffer warehouses has been growing in Ukranian logistics market. However, there is a common issue when companies can’t find suitable premises. WareTeka platform gives a solution. It’s On-Demand service to select temporary storage warehouses. You can use intervention storage, provided by reliable 3PLs. So, you just pay for usable storage space. 

Usually, temporary storage warehouses are located in large Ukrainian cities, such as Kyiv, Kharkiv, Dnipro, Odessa, etc. Logistics providers offer premises to store different types of products. Dry storage warehouses are used to keep goods without strict temperature conditions, cold storage warehouses are for foodstuff. 

WareTeka collaborates with TOP logistics companies, such as Pakline Logistics, NP Logistic, Raben, Ekol, etc. Moreover, WareTeka’s experts can help you to select a premise in most of Ukranian cities. We collaborate with both large and small local logistics companies. 

What is a buffer storage warehouse and why do companies need it? - 4

Contact us to find out the buffer stock scheme that meets business needs. We dive into your requirements by analyzing quantities of goods, number of required pallet positions, calculating the price for storage and material handling among different 3PLs. 

Managing customers’ demand, providing goods at the right time, in the right place, in the right quantity are great skills to develop your business. Do you face the issue of how to find temporary storage warehouses? Just contact WareTeka for help.

Conclusions 

A buffer warehouse is a premise to store reserve stocks of goods. Such approach helps companies to quickly react to seasonal ranging in buyers’ behaviour and smooth customers’ demand, if needed. Generally, goods in buffer warehouses are stored for a short time. 

Keeping buffer stocks is an important part of lean manufacturing strategy. Such an approach helps companies to decrease expenses. 

Managing customers’ demand, providing goods at the right time, in the right place, in the right quantity are great skills to develop your business. Do you face the issue of how to find temporary storage warehouses? Just contact WareTeka for help.

Compare Listings
No listings to compare