As a Warehouse Manager, you will be faced with several challenges in attempting to deliver an acceptable service to your customers. Some of these challenges will be brought about by the following:
The requirement to execute more, smaller transactions
The requirement to handle and store more items
The need to provide more product and service customisation
The need to offer more value-added services
Receiving and shipping more international orders
The challenge is to achieve the above in an environment where:
Less time is available to process an order
Less margin of error is expected
Less young, skilled personnel available
And less WMS capabilities.
It would appear that as a Warehouse Manager, you are expected to deliver in an environment of restricted resources. This calls for organisation and planning skills if you are to survive.
Warehouse Logistics Strategy
Warehousing is possibly one of the oldest commercial activities. For example, the Ancient Egyptians used warehousing to prevent famine. In modern times Ackerman, (2004) describes warehousing as a means of achieving transportation economies, i.e. consolidation and distribution in order to reduce freight cost, and improve customer service.
One would have thought that with the advent of JIT and other techniques, organisations and their supply chain partners would not need warehouses. But the truth of the matter is that in spite of all these techniques, warehouses continue to play a pivotal role in business today. If anything the function of warehousing has evolved such that it gives supply chains further opportunities to add value in the supply and delivery of products and services. In this unit we will explore how warehouse management is an important aspect of supply chain management and how it can contribute towards the profitability of an organisation.
From the above Figure 1.1 you will observe the different functions warehousing performs within a supply chain. Your challenge as a Warehouse Manager is to minimise the time goods or materials spend in the pipeline or in your warehouse, whilst at the same time maximising availability of stocks at minimum costs.
Below is an outline of some of the functions:
Raw materials: warehouses should allow for a smooth flow for the production process to avoid disruptions.
Work in progress: (e.g. semi-finished goods, components) is held at various stages during the production process.
Stocks of finished goods: these are held before they are distributed for final consumption. The aim is to balance the variations between production/supply and demand or consumption.
Consolidation/sortation: the consolidation of goods from different manufacturing points or various suppliers with the aim of combining/sorting for transportation. These warehouses are normally referred to as distribution centres.
In addition to distribution centres, warehousing also offers another service referred to as a fulfilment centre. In this regard the function involves receiving, picking and shipping small orders for individual consumers.
New and innovative ways are being introduced to allow for cost savings and improved value-adding services to be offered to customers.