Warehouse storage is common when you have enough product volume that you need to put the products somewhere. However, when demand is high, the last thing you want is to leave products stuck in a warehouse. Some smaller companies have found a few reasonable solutions that make these issues work themselves out.
Cross-Docking
Even though this shipping process sounds like moving product over several docks before either storing it or shipping it out, it actually means that the product is leaving the manufacturing plant and going directly to the consumer. It "crosses the dock" for the moment between being made and the moment it is sent to the consumer or merchant (if ordered in mass quantities). In short, it becomes a "made on demand" product and shipping process. Many small companies, including popular cosmetics manufacturers, are only shipping what is ordered and what is made when ordered. Not only does this reduce the amount of product that ends up stored in a warehouse unused, but it also creates higher demand for product because of the way in which it is made and shipped to order.
Warehouse Storage
Warehouse storage is still the best option for those times when your company needs to boost production but not have the products taking up valuable real estate. You can, however, make a fairly accurate prediction on how much product might be in demand for a specific time of year, such as Christmas, and then make and store extra products in a warehouse. These products should be the first ones tapped when orders begin flooding in for the holiday season. Then your employees can continue to produce product that goes to the warehouse and is immediately shipped out as soon as more orders come in. When orders start to slow down again, you can shift back to the cross-docking shipping practices to reduce the amount of product still in the warehouse and avoid having excess in storage.
Of course, there are products that just naturally need to be made ahead all year long. There is no telling how much or how many will be ordered at any one time, so it is important to fill a warehouse and pull products as needed. One such example is automobiles. There is no way of knowing how many of this or that make and model will be in demand. A company makes thousands and then stores the excess inventory in a warehouse until a dealership places an order.
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