Warehousing is the storage of goods to be later distributed to retailers and consumers in the marketplace. It’s one of the most significant and oldest aspects of any economy’s entire value chain. In the current period of rapid globalization and an ever-changing economic climate, the industry has become extremely competitive, with different players, new technologies, and the need to understand the market dynamics.
Although changes in this industry are fraught with challenges, they’re also exciting. With the emphasis placed on time, convenience, experience, and above all, on personal contact and proximity, the digitalization of supply chains has led to new ways of warehousing.
Warehousing in the Global Marketplace
The globalization of the economy has been one of the major forces shaping modern business and the changes it brings with it. In the last decade, the rise of e-commerce has been a driver for the globalization of supply chains, which is why every company has either adapted or transformed. And for good reason: the efficiency of supply chains, the speed of their delivery, and the ability to maintain customer relationships all have a direct impact on the bottom line.
With physical distribution shifting towards e-commerce, and thanks to new technologies, the supply chain is now more transparent, and customer experiences are enhanced. In the past, warehouses required huge investments, and they took up valuable real estate that was often underutilized. Today, however, an emerging industry offers a whole host of new solutions, with far better economics and greater efficiency. You can learn more about solutions on a site like migway.
Main Warehousing Logistics Elements
Warehousing logistics is based on four major elements: warehouse management, warehouse operations, and warehouse management systems. These logistics functions are often separated, but in reality, they’re all integrated and complementary.
Warehouse Operations
The warehouse operations function deals with all activities in the warehouse. Here, it is possible to manage and coordinate material movements to make sure that a product or goods receive the proper support. This function can include warehouse order receiving, picking of material from and shipping of products (SKUs) to the vendors, packing, storage and put away. Below are some factors worth noting.
- Warehouse operations encompass the activities performed by warehouse operators, to fulfil orders effectively and efficiently. The warehouse facilities are places where products are stored, usually in anticipation of being distributed.
- Facilities include storage areas or storage sites; transportation means such as trucks, conveyor systems, and railroads; and means of protection such as access control, security, and surveillance.
- Warehouse efficiency is a function of two areas of operation: Internal operations, which deals with the performance of the warehouse staff and the operations of the warehouse itself; and external operations, which is the relationship between warehouse operators and the other members of the supply chain.
- In storage, the time to put products in storage and retrieve products from storage determines efficiency. The time to move products to the delivery dock and out of the warehouse also affects warehouse efficiency.
Some of the KPIs that can be used to measure the performance of warehouse operations:
- Turnover time
- Cost of goods sold
- Transportation costs
- Warehouse costs
- Total number of employees
- Operating days per year
If the performance of warehouse operations is poor, it will reflect in these indicators.
Warehouse Management
The warehouse management function deals with all the processes that are required to oversee a warehouse regularly. This function includes planning, budgeting, forecasting and replenishment, as well as the management of labour, warehouse space, supplies, and equipment.
Warehouse Management Systems
The warehouse management system (WMS) is an online-based solution that connects all the functions and areas involved in warehouse logistics. This function is the most important, as it ensures smooth and efficient operations in warehouses. The primary components of the function include:
- Warehouse tracking, inventory control, and monitoring
- Warehouse automation, including warehousing optimization, enterprise resource planning (ERP) solutions, bar-code readers and scanners, and autonomous mobile robots, e.g., Modula mobile robots.
The WMS replaces the manual process associated with warehousing thereby enhancing shipping, distribution, and inventory.
Synergizing Warehousing and Business Supply Chain
The purpose of warehousing in conjunction with the corporate supply chain is to deliver the correct goods, at the right time and in the appropriate location. For this purpose, it is important to understand that the business supply chain encompasses:
- The business supply chain is a dynamic process of all operations involving the product and business from the moment a customer places the order to the moment the customer takes possession of the product.
- It is a structured set of transactions and activities that moves an item from the original supplier to the end-user.
- For companies, supply chain management (SCM) helps coordinate and control the procurement of materials and services, in a manner that promotes cost-effectiveness, customer satisfaction, and business continuity. Warehousing and logistics have also become more about managing risk and uncertainty.
- The danger of damage or loss rises because the supply chain in retail is the network of people, inventory, information, and procedures involved in transporting items and information between suppliers, retailers, customers, and consumers. This is when warehousing enters the picture.
Warehousing ensures that these functions and the supply chain work well together in an integrated manner to meet customers’ needs and create a competitive advantage for the company. The logistics function in an integrated supply chain involves:
- Distribution network planning and management
- Inventory control and management
- Warehouse and storage planning and management
- Facilities and equipment planning and management
- Customer service management
- Supply chain management
When a company is working with a business supply chain, it is essential to ensure that the logistics function in the integrated supply chain has a smooth flow. If there are disruptions in the supply chain, the flow becomes disrupted.
Conclusion
In summary, warehousing is considered to be the backbone of logistics and supply chain management. Business owners who understand this fact harness this process to build successful businesses. The company can stay ahead of the competition by maintaining the smooth flow of business.
What’s more is the fact that warehousing has become the most cost-effective approach to handling, storing, and distributing goods. Those in search of solutions geared towards cost reduction and service delivery will discover that warehousing is the perfect answer.
