Warehousing and Fulfillment

Warehousing involves the physical storage of goods for a period of time so they can be used at a later date for some other purpose. Items are received at the warehouse and held there until ready for the next link in the supply chain. Security systems, loss prevention procedures and climate control are key considerations when evaluating a warehouse facility.

The key difference between a warehouse and a fulfillment center is the manner in which orders are processed. While stored items can be shipped from both a warehouse and fulfillment center, fulfillment centers also process and prepare other types of orders for delivery to the customer. This can include custom packaging, product kitting, print on demand and other services.

Third-party logistics is the name given to companies that provide outsourced logistics services for their clients. There are many types of third-party logistics companies but the common theme is that they all provide some form of outsourced logistics services to their clients. Whether they provide the service themselves and/or outsource those services from another provider on behalf of their client.

The key to 3PL providers — and what sets them apart from 2PL providers — is integration. A third-party logistics partner is integrated into their client’s business and functions as a seamless extension of the client’s own operations. A second-party logistics provider is typically involved in moving goods from Point A to Point B. Thus, a 2PL is someone you hire situationally to move an item while a 3PL is someone you form a close and long-term working relationship with to turn warehousing and fulfillment operations into a competitive advantage.

While order fulfillment centers provide both kitting and packing services, they are two distinct processes.

Product kitting is the gathering of individual items or components and grouping them together as a single product - this is what’s referred to as a “kit.” The main purpose of kitting is to create bundled products to be sold. The kitting process is also used to streamline product assembly after the sale for the customer and simplifies inventory management for the vendor.

Packing is the process of putting items into packaging materials (such as boxes, cartons, bags or containers) for shipment and storage. The main goal of packing is to ensure items are protected during transit, that they are stored safely and ready for delivery when ordered. Packing can include single products or multiple orders placed into a single shipment.

Cold chain warehousing and distribution encompasses all phases and the management of the cold supply chain, including the shipping, storage and distribution of temperature-sensitive products. Temperature-sensitive products that require cold chain management solutions include pharmaceuticals, vaccines, lab samples, diagnostic materials, chemicals, and certain foods and beverages. Cold chain management is crucial for product safety and adhering to regulatory requirements.

Cold chain logistics requires a cold chain fulfillment partner with knowledge and control of temperature-controlled storage and shipping environments, temperature-sensitive packaging design, transportation modes, delivery intervals and other critical control points.