Question

Centralised warehousing systems are preferred as they are more efficient than decentralised warehousing systems. Critically discuss this argument.

Answer 1

A centralized warehousing system is a centralized system that serves all the warehousing facilities across the territory from a single warehouse. The centralized system is generally used to organize receipts of products from a wide range of suppliers and delivers products to multiple branches. Deliveries are transported from a centralized location.

It is entirely different. And more effective than the decentralized warehousing concepts. A centralized idea exaggerates the power and authority of one single warehouse that controls all the activities. It is a transparent way that there is almost no possibility of data misleading or data misinterpretation. On the contrary, the decentralization of warehousing has different branches. Different people from various departments handle the activities utterly different from the working style of a centralized way.

Benefits of centralized warehousing systems are as follows:

• The centralized system has better control than a decentralized system
• Inventory management is more reliable that a decentralized version.
• It reduces costs from the distribution chain.

Thus, the centralized system is more adaptable than a decentralized network.