It allows you to load a cache file on disk in the Data Flow.
The Cache Transform can be used to populate a cache file in the Data Flow as a transform, and then immediately used, or it can be used as a destination and then used by another package or Data Flow in the same package.
This cache file allows you to perform lookups against large datasets.
It allows you to share the same lookup cache across many Data Flows.
Advantages:
As the data to be looked up is cached in a file, the SSIS engine does not need to connect to the database for each incoming row. So the lookups are faster.
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