Warehouses and other similar facilities play an important role in the success of the supply chain process. There are many fundamentals that contribute both to the efficiency and effectiveness of supply chain and provide many solutions to current challenges in the industry.
With the continuing of globalization and changes to areas such as environmental sustainability, information technology, and shipping technology, warehouses are evolving to accommodate new integrations and digital systems. In fact, a better term would be “distribution center (DC)” now that a broad range of activities is now occurring in modern warehouses that go beyond filling orders.
The General Role Warehouse Plays
Warehouses provide double value and efficiency by consolidating products for shipments to customers, reducing transportation costs, and performing a wide range of services that add value to the products and supply chain process. These values are branding, labeling, assembly, packaging, kitting, and reverse logistics. Warehouses also make the entire supply chain process much more effective with strategic warehouse placements. The positioning of products and services closer to their intended markets and customers provide much more value and cuts down various costs like transportation and delivery fees.
Certain products have certain characteristics that often determine the needs and requirements of the warehouses. Characteristics of these products are:
- Seasonal goods in production or consumption
- Service requirements
- Marketing and promotional initiatives
- Transportation economics
- Manufacturing economics
Products that require extremely high service requirements present specific challenges since they affect efficiency, performance, and cost of consumers’ operations. As an example, companies that manufacture and distribute computer parts must be able to distribute these parts out within hours. Failure to do so affects the entire supply chain process and can be extremely costly.
However, there are products that when bought in bulk with little or no time sensitivity associated with their use provide no value with warehouse management. On top of that, products that are also insensitive to transportation costs are moved directly to consumers, requiring little to no warehouse management.
Click here to read about the Importance of Time-Sensitive Expedited Shipping
Role of Location in Warehouse Efficiency
The location of supply points and warehouses help in determining the volume of product moving to or from the warehouse to customers. These warehouses are built at certain locations to ensure that products are stored effectively in the intended environment, at a closer reach to consumers, transported with the lowest rate available, and to adhere to government and state policies. Local conditions also effect locations of warehouses, including the cost of labor, land and buildings, IT infrastructure, transportation infrastructure, and taxes.
With the introduction of drone delivery means that warehouse location is even more crucial today. In an age where technology and impatience of it rule the lives of many, having products and items shipped directly to consumers is required. Failure to do so affects consumers, therefore affecting the entire supply chain process.
Design and Operations of Warehousing
When determining the design and operations of warehouses, product requirements, nature of customer orders, service levels and transportation modes all contribute to the build. Each industry that requires warehouse management needs specific designs and functionality that contribute to their success. For example, pharmaceutical companies require warehouses that have temperature-controlled storages, where large manufacturing companies, like a manufacturer for airplane parts, require larger warehouses with systems and machines to transport their larger cargos.
What’s Next for Warehouse Management?
As the industry moves into the future, new technologies like automated trucking and robotics will be considered into the design and integrations of warehouses. The warehouses that integrate these new technologies sooner will have more success than those that do now, resulting in an overall successful supply chain process for all parties involved.
For more articles on the topic of the supply chain process, check out our other articles below:
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