Traditionally seen, a warehouse was a place to hold or store inventory. In contemporary logistical systems, an important functionality is mixing and modifying inventory to meet customer demands.

An important goal in warehousing is to maximize flexibility, facilitated by IT which created better ways to perform storage and handling. Being flexible also means quick responding to changing demands. Strategic warehousing serves to satisfy requirements related to local presence. Local warehouses can respond fast to customer needs. Benefits from strategic warehouses are classified in the following:
1. Economic benefits: Economic benefits of warehousing occur when overall logistics costs are reduced.
2. Service benefits: Warehouses can provide services that will cause sales improvements.

·Economies of scale (EOQ: ordering costs vs holding costs) -->produce a lot of items --> store it
·Product mixing --> 2 facilities producing --> to 1 facility (manufacture perspective)
·Consolidation (retail perspective)
·Distribution function: inhouse bulk of products
·Pay for warehouse --> save on transportation costs
·Difference between customer ordering and manufacturer producing it.
·Because of e – commerce warehousing has to deal with returns --> last 20 years is becoming more important
-In the future 3D printing --> demand customer then print