The Importance of Warehousing in a Logistics System
Warehousing and warehouse management are part of a logistics management system, which is itself a component in supply chain management. Although viewed by some as simply a place to store finished goods, inbound functions that prepare items for storage and outbound functions that consolidate, pack and ship orders provide important economic and service benefits to both the business and its customers
A warehouse provides a central location for receiving, storing and distributing products. As each inbound shipment arrives, responsibility for the goods transfers to warehouse personnel, products are identified, sorted and dispatched to their temporary storage location. Storage isn’t a static “thing” but rather a process that includes security measures and maintaining an environment that preserves the integrity and usefulness of the items. Once it’s time to move items, each order is retrieved, grouped, packaged and checked for completeness before being dispatched to their new destination.
The objective of a logistics system is to reduce cycle times and overall inventories, lower costs and most importantly, improve customer service. Warehousing increases the utility value of goods by providing a means to have the right products available at the right place in the right time. Operations such as order consolidation, order assembly, product mixing and cross-docking that take place within the warehouse structure also add value to the overall logistics system.
Warehouses provide a economies of scale through efficient operations, storage capacity and a central location. Economic benefits are realized, for example, through consolidation and accumulation operations. Consolidation operations cut outbound delivery costs for both the business and its customers. Instead of shipping items individually from multiple sources, items are delivered to a central warehouse, packaged together and shipped back out as a complete order. Accumulation operations allow a warehouse to act as a buffer, balancing supply and demand for seasonal and long-term storage. This can be vital to business profitability when demand for a product is year-round but the product may only be available at certain times of the year.
Warehouses can serve as part of a contingency plan to ensure outbound orders are filled in full and on time. A practice called safety stocking allows businesses to maintain a predetermined number of inventory items at its warehouse. On the inbound side, safety stocking means that an emergency such as a transportation delay or a shipment containing defective or damaged goods won’t delay filling and shipping customers order. On the outbound side, safety stocking is insurance against out-of-stock items.
INO Bulk Warehouse Management Solution is designed by CEL Consulting to truly deliver on these very important issues by ensuring that every event is captured whilst significantly optimizing the efficiency of the warehouse. INO is suitable for a wide range of commodities including grains, oilseeds, dairy, live stock, feed ingredients, biofuels, raw material, fertilizers... INO Bulk Warehouse Management offers companies a competitive advantage when dealing with today’s volatile markets. Significant gains in operational efficiency are always achieved once INO Bulk Warehouse Management Solution. An operational cost reduction of up to 35% can be expected.
For Demo and further information:
INO Bulk Warehouse Management Solution
+84 (08) 22 494 241