Issues Warehouse Managers Must Look Out For

The presence of warehousing in the logistics system is of paramount interest for businesses to ensure smooth functioning of all the operations and maintaining consistency. There are several factors that influence the functioning of warehousing in India such as ever-changing customer needs, on-time delivery, infrastructure, capacity, inefficient communication and security.

A proper arrangement of warehouses to bridge the gap between supply and demand is essential to ensure its smooth functioning.

Some problems that a warehousing system can address are:

Storage: One of the major functions of a warehouse is storing goods after production. Once goods are manufactured, they are to be stored until necessary arrangements are made for the distribution. It is important that the goods are appropriately taken care of to avoid damages and in the case of perishable products, spoilage. Raw materials too need to be stored to enable mass production to be carried on uninterruptedly. Often, warehouses store goods in anticipation of price rise or a spike in demand too.

Risk Minimization: Manufactured goods are subjected to other forms of risks like pilferage, shrinkage, deterioration, damages, etc. which warehouses take responsibility of as they are built in a way that ensures proper nurture and security of the stored goods. It is a good idea to build the warehouse keeping in mind the requirements to be fulfilled or rent it accordingly.

Information Flow: Warehouses contain a great deal of information that is very important in making business decisions. A variety of information flows through warehouses during operations such as order status, shipment status, the volume of goods stored, category of goods, the average time taken to complete an order, the average cost per order, number and frequency of inbound and outbound shipments, routing, invoices, etc.

Price Stabilization: A small change in the supply or demand of goods can have a drastic impact on the prices. Warehouses provide the time utility by storing the goods long enough to ensure nothing is out of stock when there is excess demand or when the supply from manufacturing facilities is high.

Spatial Convenience: Without the warehouses it would be impossible for customers to buy the desired products within their neighborhood which will reduce the availability of products thereby leading to lower profits. Warehouses ensure an even distribution of products throughout the markets. For example, if you have Warehouse Space in Delhi, it would be useful in serving the customers throughout Delhi but is not good for serving farther markets.

Along with addressing the most pressing concern of the logistic system, warehouses have some other added benefits:

Economic Benefits

Economies of scale refers to the practice of reducing the average cost of production over the long run achieved through better equipment handling, efficiency in management practices, improved relationship with suppliers and learning.  Warehouses provide economies of scale through efficient operations, augmented storage capacity and a central location. Economic benefits are realized through the accumulation of operations and consolidation. Outbound delivery costs can be reduced using consolidation operations for both the business and its customers.

Service Benefits

Warehouses serve as part of a backup plan to make sure that outbound orders are fulfilled on time. In order to maintain a minimum volume of inventory ,warehouses indulge in a practice called safety stocking. It has two perspectives inbound view – where safety stocking means that an unexpected event like a transportation delay or a case of damaged goods won’t delay filling and shipping customers order, and the outbound view- where safety stocking is insurance against out-of-stock scenario.