B2B e-commerce logistics: benefits of multiple warehouses

Has your B2B e-commerce, as it has grown, begun to struggle with problems such as extended delivery times, logistics delays or high transport costs? If so, then you should most likely start thinking about implementing multi-warehouse supported by an appropriate system. We write about how harmony in logistics becomes a key element of competitive advantage, helps in optimizing B2B deliveries and improves other key processes in the following article.

How does multi-warehousing work and how can it be used to improve B2B logistics?

Many B2B e-commerce companies follow the same pattern. At first, they have one warehouse that fully meets the company's needs. As the number of customers and partners grows (often from increasingly remote regions), the distribution center also grows, and the number of warehouses increases, which brings with it new challenges such as:

• increasingly longer order fulfillment times;
• increase in transportation and storage costs;
• downtime and delays occurring in the event of breakdowns or stock shortages;
• decline in customer satisfaction.

Businesses facing these challenges are looking for effective ways to restore optimal efficiency. One of the solutions they are increasingly considering is implementing multi-warehouse operations.

But what exactly is multi-warehousing and how does it work? It is a strategy that involves storing the goods offered in more than one logistics center. Companies operating under this model often decide to place warehouses in different cities (e.g. near customers or production plants), which allows for the optimization of deliveries in e-commerce. Additionally, such organizations usually use a professional B2B system to manage their warehouses, which allows them to achieve other important benefits.

B2B Delivery Optimization and Other Benefits of Multi-Warehouse Business

What specific benefits can companies count on that decide to use multiple warehouses in their business? If the implementation is done correctly, the profits from this undertaking will be really significant. The most important benefits of multiple warehouses are discussed below. Reduction of transportation and storage costs The first important issue worth looking at is the relationship between multiple warehouses and transportation and storage costs. Although it may seem that opening new logistics centers is just an additional financial burden for the company, in reality such an investment contributes to reducing expenses in the long run. How is this possible?

Savings will result, among other things, from the fact that if a company has an extensive network of warehouses located in different locations, it will not have to transport goods over such long distances. It will be possible to send an order from the logistics center located closest to the customer, which will help avoid high delivery costs.

Additionally, multiple warehouses will reduce the costs of storing goods. Thanks to access to several logistics centers, it will be possible to arrange goods more optimally (e.g. by creating warehouses where only one type of product is stored), which will have a positive impact on the cost efficiency of the organization.

How to improve customer service with multiple warehouses?

Ensure fast deliveries Many store owners are currently wondering how to shorten delivery times in B2B e-commerce and avoid unexpected delays.

The speed of order fulfillment has a significant impact on customer satisfaction and future purchasing decisions. According to data published by Voxware, 69 percent of respondents are less likely or much less likely to shop with a retailer in the future if the item they purchased is not delivered within two days of the promised date.

Creating a more extensive warehouse network will be one of the best ways to shorten delivery times. Because logistics centers will be located closer to the customer's location, the transport of goods will not only be cheaper, but also faster.

This in turn will translate into improved customer service levels and will make it easier to build long-term business relationships. It is worth regularly monitoring sales results to make sure that the choice of warehouse location is the right one.

Risk diversification through multi-warehouse business

Another undeniable benefit of implementing multiple warehouses in business is risk diversification. Failures, warehouse shortages, downtimes and other unexpected situations occur even in the best-organized logistics centers. If a company has only one warehouse, such events can prevent the shipment of orders and completely paralyze the organization.

For B2B companies, reliable deliveries are essential. Even minor downtime and delays can cause serious consequences, such as loss of trust from contractors or even complete termination of the business relationship. The problems mentioned will not cause such serious consequences if the company has several warehouses.

In a situation where a failure or an unforeseen shortage of stock occurs in one of the logistics centers, the goods can be shipped from another location. This will help avoid serious delays that would negatively affect customer satisfaction.

Inventory optimization and better control over stock levels

Another important advantage of having an extensive network of warehouses is the ability to optimize inventory and adapt it to specific market conditions. Some organizations may, for example, have situations where demand for specific goods is higher in certain regions. By having several distribution centers, such companies will be able to optimally allocate inventory so that orders can be fulfilled quickly and cheaply.

The Challenges of Managing Multiple Warehouses

The above-mentioned benefits, among others, encourage companies to expand their warehouse network. Organizations that want to implement multiple warehouses must be aware, however, that this solution can also contribute to the emergence of certain challenges. If the currently used system is not adapted to the management of an extensive network of logistics centers, problems such as:

• difficulties with synchronizing inventory levels;
• lack of automation of logistics processes;
• more frequent occurrence of errors and mistakes.

To achieve all the benefits of multi-warehouse management while avoiding the challenges described, it will be necessary to implement the appropriate software. Let's take a look at what a good B2B warehouse management system should have.

B2B warehouse management system – how to adapt it to the needs of multi-warehouse operations?

B2B platforms are tools that support the functioning of online stores on many levels. The facilities they provide in terms of placing and renewing orders, making offers, managing pricing policy or tracking shipments make it difficult to imagine the operation of modern e-commerce without a professional system.

A B2B e-commerce platform should be designed with scale in mind – it’s not just about automating orders, but also about the ability to dynamically manage inventory based on seasonality and demand forecasts.

The tools available on the market support multi-warehouse operations in business to a different extent and provide various possibilities for integrating B2B systems with logistics. In order for a company to be able to operate new warehouses without losing efficiency, the platform it uses must be part of a harmonized ecosystem, which also includes external tools (such as a WMS system or an ERP system for B2B logistics).

It is therefore necessary to implement a tool that will enable the connection of individual systems as different elements of one puzzle and will allow avoiding the most common challenges related to B2B integration.

Companies with several warehouses cannot afford to have resource management, flow control, and other key processes performed manually. These activities must be automated to the greatest extent possible – only this will ensure the balance of all activities, protect against loss of efficiency, and enable further business scaling.

How to shorten delivery times in B2B e-commerce with tools supporting multi-warehouse operations?

When we look at examples of companies with more than one logistics center, we can see that implementing the right B2B platform, as well as integrating the store with ERP and other systems, significantly improved their delivery speed and reduced costs. In some cases, it is also possible to use additional tools and improvements to optimize processes.

One example of such a solution is our implementation for Kronospan. The algorithm we designed facilitated the harmonious management of deliveries, which are partly handled by DB Schenker and partly delivered by the company's own transport.

Logistics optimization in B2B means not only greater efficiency, but also smoother processes – when warehouses, transport and the ERP system work together, orders arrive on time and customers feel confident.

Effective ERP system for multi-warehouse management

Multi-warehouse is, on the one hand, a logistics issue, but on the other hand, it is a strategic action that increases competitiveness on the market. As we can see, the emergence of the need to use additional warehouses is a natural stage in the development of the company.

However, in order to fully use the potential provided by additional logistics centers, it is also necessary to implement an appropriate system for companies.

Do you want to implement multi-warehouse in your business, and at the same time speed up deliveries and reduce their costs? Or maybe you already use several warehouses, but you are struggling with various challenges related to handling B2B orders? Then we invite you to contact Ideo.

Our specialists will present you with all the possibilities of our B2B system offering multi-warehouse service and help you choose the solutions best suited to the needs of your organization. Find out today how we can support your company and provide it with the possibility of further development.