What is Warehousing?
Warehousing is an integral part of supply chain management as it encompasses activities related to the storage of goods and products that will be distributed to the customers. It helps in regulating the flow of goods by preventing them from various uncertainties. Therefore, businesses are largely dependent on efficient warehousing operations for the safekeeping of goods and commodities. The major objective of warehousing is to minimize the operation cost while maintaining the quality and usefulness of the goods which can fulfill the customer demands.
In the fast-paced world, warehousing in supply chain management is important for keeping everything organized starting from the picking process, storage, managing inventory, material handling, auditing, and so on. Warehouses are specially designed for storage as it can boost the company’s productivity and efficiently manage the operations. It is an essential element in the logistics management and supply chain industry as it tends to bridge the gap between the production and consumption time period.
There are six different types of warehouses:
- Distribution Centre
- Public Warehouses
- Private Warehouses
- Bonded Warehouses
- Cold Storage
- Smart Warehouses
10 Important Objectives of Warehousing
Warehousing is an important aspect of businesses that is dedicated to the place for storing goods and materials efficiently. Organizations invest in warehouse management systems that are related to import, export, transport, and manufacturing the goods. The purpose of warehouses is to coordinate the necessary activities for optimal functionality of the operations.
Here are the objectives of warehousing
1. Storage Facility
Warehouses provide the space for storing surplus goods and commodities of businesses. Efficiently managing the physical storage space is one of the key objectives of warehousing. It manages the goods that are not needed to be delivered immediately. Capacity planning and selecting the right warehouse according to your business needs is also essential to understanding the utilization of space as it involves the major activity like storing the goods till their use or consumption. It is always advisable to safely store and logically arrange the inventory to streamline the supply chain operations.
2. Easy Accessibility of Inventory
Warehouse and distribution facilities should be located in the right place as it can significantly enhance a company’s profitability. Determining a strategic location along your supply route can help the companies to fulfil the customer demands. Therefore, inventory should be easily accessible to serve your customers better.
The major objective of warehouse management is to ensure that the goods can be located from one point to another promptly. Companies should focus on optimal warehouse logistics management for coordinating complex processes.
3. Enhanced safety
Effective warehousing ensures that the goods or products should be in a good condition as it tends to prevent material spoilage and delays. The inventory should be safely kept according to its need for storage and preservation. Providing the right quantity of inventory when needed and ensuring that the quality is well-maintained can be beneficial for business growth.
Therefore, careful handling of goods can critically impact businesses. In addition, the companies are avoiding losses through theft or vandalism by enhancing the security system with cameras, yard patrols, real-time alerts, and so on. Safety is the foremost priority as it is an essential way to significantly cut down losses and operational costs.
4. Optimized Production Process
Good inventory management can improve the overall productivity and efficiency of the company. The objective of warehousing is to keep the inventory level optimized by maintaining the supply with demand. It helps the organizations to determine when to supply and restock. The layout of your warehouse tends to determine the efficient flow of the production process. It is always advisable to invest in a warehouse management system to reduce the production bottlenecks. Therefore, product supply in the market should be a seamless process without any interruption.
5. Smooth Movement of Goods
It involves the major process of transferring goods and products from one place to another. Warehousing facilitates various functions for delivering the goods to the customers. It involves the activities like receiving, putaway, storage, picking, packing, and shipping. Optimizing all these elements can help you to streamline your warehouse operations. Also, the infrastructure of the warehouse can ensure the optimal movement of goods to meet the demand in the market. Warehouses play an efficient role to store the products and help them to reach their destination safely.
6. Cost-Effectiveness
The management of your warehouse should be well-organized as it can secure the measurable success of a company. Optimization of the storage capability and inventory management is considered to be vital for an agile supply chain. The major objective of warehousing is to reduce the overall operational cost and boost the productivity of your business.
Embracing dedicated technology and secure facilities is the best way to eliminate errors and inaccuracies in warehousing operations. In addition, making regular inventory audits and determining the transportation of goods in an efficient way to speed up the next production process. These activities play a major role in the preservation of cash flow.
7. Enhanced Risk Management
In the functions of warehousing, risk management is a crucial technique for businesses to eliminate any kind of risk or mishappenings. It is necessary for companies to ensure that surplus goods are stored safely. Therefore, modern warehouses have efficient staff to take care of the products and goods as it is the responsibility of the warehouses to take all the preventive measures. If in case, the goods get stolen or lost then the warehouses had to provide compensation for the loss. Also, warehouses are constructed properly to prioritize the overall safety and security of the operations.
8. Reduced Human Error
The major objective of warehousing is to embrace automation through logistics and reduce human errors. Warehouse management systems tend to automate all the routine tasks as human errors are the most prevalent root cause of the vulnerability in the businesses. Get real-time updates on shipments and maintain correct inventory data by incorporating new-age technologies like Artificial Intelligence, Machine Learning, the Internet of Things, Big Data, and so on. Therefore, eliminating the major task of warehousing the workforce can lead to higher productivity.
9. Information Management
You can easily keep track of the warehousing and can comprehend which goods are stored and shipped out. Recording the activities of warehouse management can provide you with deep insights that can help businesses to analyze the stock processing and stock replenishment requirements. In addition to that, the next step of warehousing is to distribute the products or goods to the end customers.
Implementing new-age technology can evaluate the vehicle running path and operation method to provide the customers with informative data. Therefore, the information management system in warehousing plays a major role in the smooth functioning of businesses.
10. Value-added Operations
Modern warehouses tend to go beyond the conventional warehousing processes as it improves the utility value of goods and enhances the supply chain. The major objective of warehousing is to involve value-added services such as processes, cross-docking, order consolidation, product mixing, and so on.
Furthermore, warehouses also perform certain activities on the behalf of business owners as well. Optimizing the quality of the operations can be extremely beneficial to lower costs and add value to the entire supply chain process. Therefore, value-adding modern warehousing provides prompt and efficient services to the customers and dealers.
Conclusion
These are some of the major objectives of warehousing in supply chain management. Monitoring these functions and elements of warehouses is imperative for business owners to safeguard the goods or products. Nowadays, companies are investing in a high-tech warehouse management system for planning and developing an effective logistics strategy to simplify the operations. Therefore, warehousing plays a central role in managing the supply chain by ensuring that the product reaches the end customer without any delay.
