Benefits of consolidating distribution centers


Is Coca Cola USA planning to consolidate the Coca Cola Refreshment business and other Atlanta locations in a new office location as reported in the Atlanta Business Chronicle.

Wholesale grocers and retail chains, in turn, store product in their own warehouses until it is ordered by stores, at which time it is handled again in almost exactly the same manner as it was handled in the manufacturer's distribution center.

We find that this shortfall is proportional to the standard deviation of demand.

As we show, this implies that consolidating retailer units – which leads to a lower standard deviation for the aggregate demand – can increase sales.

Even our Federal Government, not always known as a model of reducing expenses, is saving money through consolidation.

The Internal Revenue Service is expected to save .6 million dollars in reduced rental expenses in FY 2012 through 83 office space consolidation projects.

For years, warehousing, distribution and manufacturing were largely invisible to the corporate enterprise.

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