What are the Service Benefits in Logistics?

Service Benefits
These benefits are mainly intended to improve the service of the logistics and may or may not reduce cost. The service benefits are as follows:
Reducing delivery time: Warehouses, can be located near the key market areas when the demand is high in order to reduce the time required to deliver to the market. Thus the goods that are manufactured can be warehoused at a location close to the market where the demand is identified in advance. This is especially true for seasonal industries as it helps them to cater to the market when the season arrives.

Assortment: Here the warehouse stores Various goods in anticipation of customer demands. It supplies to the customer the mixture of goods required by him. This allows larger shipment quantities to the customer thus reducing transportation cost. It also reduces the number of suppliers the customer has to deal with. This is true with distributors, who store goods from different suppliers which are supplied to the retailer when required. Thus the retailer does not have to interact with each and every supplier and can deal with the distributor for a number of goods.

In transit mixing: The various bulk materials are broken down and then mixed so that goods can be taken to the customer as per his requirement. For example there are lots of retail outlets in the city who may require different quantities of coca cola, fanta, thums-up, etc. Coca Cola as a company has a central warehouse where truckloads of various products (coke, fanta, thumbs-up, etc.) arrive. Here the goods are broken down to crates and are supplied to different retail outlet as per the requirement. This saves on the transportation cost and also caters to the exact requirements of the customer.

Manufacturing support: In order to get economies of scale in production, a continuous flow of raw materials is required. If there is a disruption in the supply of raw materials for any reason, it may cause the production to stop. In order to maintain continuous production and have economies of scale, the raw materials are stored in a warehouse.

Market Presence: By having a warehouse close to the market, the company can cater to the market well and thus avoid any stock outs. The company can thus be more responsive towards customer needs.