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Same concept for production chains. Potatoes can be delivered directly to schnapps distillery with no warehouse in between. The warehouse would just be needed to deliver the schnapps to after its produced.
They don't need to be nearby, but it's a good idea to avoid overburdening warehouses
until you have electricity. At that point loading and unloading at a warehouse is much faster, so a warehouse can serve many more electrified factories. Instead of putting factories near related farms, the ideal becomes to concentrate factories within range of a power plant.