Warehouse Management - General

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  • Topic: Pallet, Inventory, Warehouse
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  • Published : December 26, 2011
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Warehouse Management

Is it only a storage facility?
 A warehouse is typically viewed as a place to

store inventory.
 However, in many logistical system designs,

the role of the warehouse is more properly viewed as a switching facility as contrasted to a storage facility.


A Sample Warehouse



Benefits of Warehousing
Consolidation  Shipment consolidation is an economic benefit of warehousing.  With this arrangement, the consolidating warehouse receives and consolidates materials from a number of manufacturing plants destined to a specific customer on a single transportation shipment.  The benefits are the realization of the lowest possible transportation rate and reduced congestion at a customer's receiving dock.


Consolidation Warehouses


Consolidation Warehouses…
 The primary benefit of consolidation is that it

combines the logistical flow of several small shipments to a specific market area.

 Consolidation warehousing may be used by a single

firm, or a number of firms may join together and use a for-hire consolidation service.

 Through the use of such a program, each individua1

manufacturer or shipper can enjoy lower total distribution cost than could be realized on a direct shipment basis individually.


Break bulk warehouses
 Break bulk warehouse operations are similar to

consolidation except that no storage is performed.  A break bulk operation receives combined customer orders from manufacturers and ships them to individual customers.  The break bulk warehouse sorts or splits individual orders and arranges for local delivery.  Because the long-distance transportation movement is a large shipment, transport costs are lower and there is less difficulty in tracking.


Break bulk warehouses…


 Warehouses can also be used to postpone, or delay,

production by performing processing and light manufacturing activities.

 A warehouse with packaging or labeling capability

allows postponement of final production until actual demand is known.

 For example, vegetables can be processed and

canned in "brights" at the manufacturer.

 Brights are cans with no pre-attached labels.

 The use of brights for a private label product

means that the item does not have to be committed to a specific customer or package configuration at the manufacturer's plant.  Once a specific customer order is received,

the warehouse can complete final processing by adding the label and finalizing the packaging. 10

 Processing and postponement provide two economic

 First, risk is minimized because final packaging is not

completed until an order for a specific label and package has been received.  Second, the required level of total inventory can be

reduced by using the basic product (brights) for a variety of labeling and packaging configurations. 11

 The economic benefit of stockpiling comes from the    

need of seasonal storage. For example, lawn furniture and toys are produced year-round and primarily sold during a very short marketing period. In contrast, agricultural products are harvested at specific times with subsequent consumption occurring throughout the year. Both situations require warehouse stockpiling to support marketing efforts. Stockpiling provides an inventory buffer, which allows production efficiencies within the constraints imposed by material sources and the customer. 12

Voice Directed Distribution: Talkman from Vocollect



Service Benefits
 Five basic service benefits are achieved

through warehousing:
spot stock,  assortment,  mixing,  production support, and  market presence. 


Spot Stock
 Under spot stocking, a selected amount of a firm's

product line is placed or "spot stocked" in a warehouse to fill customer orders during...
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