Logistics Management and Warehouse - Coursework Example

Logistics management and warehouse Logistics management and warehouse Logistic management is a component of a supply chain management that plans enhance efficiency, effectiveness, implementation, and forwarding. Most importantly keeps flow and storage of goods and services in an organization. It also monitors vital information as well between the point of origin and the market in order to meet customer specification and requirements (Bowersox 2013 pg 34). Facing off with tight competition in the local and global market is difficult and each manufacturer has to develop a strong competitive edge to outdo their competitors. This is true in industries ranging from manufacturers of heavy machinery to food processing plants. Efficiency and low operating costs is feasible with a guide to develop a competitive edge in the local and global markets. In another twist, lowering the storage cost is a way that organizations use to improve their logistical efficiency and focus on their suppliers’ optimally. Before decisions of lowering storage costs are reached, there is a need to understand the basic concept of warehouse ownership arrangement. Warehouses in the production industries are classified based on their type of ownership. Private owned warehouses These warehouses are owned by organizations producing the products that are stored in it. These organizations can be wholesalers, factories, or trading companies. The construction of these warehouses by an organization depends on its capital base or leasing ability. Many challenges surface during the leasing process for an organization because say for example, an appropriate warehouse may not be available for their products. For instance, in a case of an interlining supplier, the racks and other physical infrastructure required for the storage of products such as woven interlining, fusible interlining and non- interlining may not be present in a leased warehouse. Therefore, they have to put more emphasis on the design and arrangement of needs in consideration in the building of a private warehouse. It is also important to note that on the logistical part, an organization may find it difficult to locate a warehouse that they can acquire its full ownership ( Bowersox 2013 pg 84). The merits of having a private warehouse are cost effectiveness, flexibility control and some intangible attributes. In a business perspective, private warehouse policies are flexible and changeable to suit the needs of the organization in a more easy way than a public warehouse. In addition, suitable methodologies and actions are definite requirements for logistic purposes. Private warehouses offer a control system that is stable because the organization has sole ownership of the warehouse. They are therefore in a position to control the activities in the warehouse to optimize their operations. For example, in an organization dealing with interlining products are in a better position to integrate logistic operation and methods of their supplier. In dealing with a private warehouse, the cost of storage of finished products and raw materials are generally low and the main reason is that the warehouse is built within the vicinity of the organization; this eliminates overhead costs brought about by transport cost and those incurred in damaged goods during transportation to the warehouse. As a result, the fixed and variable costs of a private warehouse remain low compared to a public warehouse. The facility is also not profitable to its owners. A private warehouse has also marketing advantage for example a warehouse bearing the name of a company dealing with non- woven interlining and woven interlining has a positive impact on the marketing strategy of the company. Customers in this case have a perception that the supply chain is stable because of the warehouse having direct connections with the producer hence the customers also develop a reliability culture towards the supplier. Public warehouse A public warehouse is where the ownership of a warehouse is separated from the organization using that facility for storage of its products. The operation of the warehouse is independent from the management of the organization hiring the warehouse. These types of warehouses are common characteristics in logistics systems because they reduce the cost incurred in the supply chain. Public warehouses can be acquired by an organization for a long or short period; this can be determined by looking at the policies of the facility and customers’ needs. In financial consideration, it is much cheaper for an organization to deal with a public warehouse than a private warehouse. There is the element of sharing of resources and economies of scale in a public structured warehouse. Another important aspect of this ownership is that the customers do not need to put in heavy initial investments while renting or hiring the facilities. Furthermore, going public in warehouse allows an organization to expand the space they need depending on market forces. Organizations or firms that are customers to a public warehouse share the operating cost by leveraging the requirements among themselves. Such sharing of costs range from fixed cost to operating costs. It is also possible under this system to leverage the cost of transport and other logistical costs. For example, the public warehouse management can arrange for a consolidated transport system to deliver their products to respective suppliers. The warehouse system is characterized by scalability, flexibility, and variable costs, which makes them the best option to many firms. Public warehouses as a classification of warehouse ownership is designed to perform special demands from customers. Contract warehouse A contract warehouse has both characteristics of a public and private warehouse structures. It is understandable as a customized extension of a public warehouse system. Its elements are characterized by long-term agreements hence it can give room for customization of the facility to accommodate the specific logistics required by a company or organization. This system appears to be a business process outsourcing in a logistical viewpoint. In this kind of strategy, the customer and the service provider share the risks that are involved in the operation of a warehouse (Saxena 2009 pg56). Various managers tend to utilize a combination of public, private, and contracted warehouses. Basic knowledge about the warehouses and their ownership arrangement acts as a guide for managers to deploy appropriate strategies in warehouse management. Managers of such warehouses focus on two things; the number of warehouses that are needed to meet their demand and the warehouse ownership type in a market. This focus brings out clear segmentation for the markets involved and for this reason enables organizations to come up with a more customer specific warehouse design and appropriate logistic capabilities to customers. Network Deployment Warehouse staffs are unable to achieve maximum operational performances and cost efficiency that is needed to add up to the overall good of the manufacturing organization. Hence, there is need to have a proper considerable level of automation .This is important especially in the material handling industries due to the fact that these industries are highly sensitive in that the slightest delay in material handling can lead to operational delay across the industry and other related business ventures. This can further cause reputational damage with the customers and business partners. Through network deployment in the warehouse, business computers are used as operation tools. The computer systems are integrated with the physical and control methodologies of a warehouse. The computers acting as the human brain, enables the warehouse system to always be online and be able to communicate, retrieve, and provide necessary information on demand. The records are also updated automatically with the help of automated software that enable interconnection among various points of the warehouse. These activities are performed in real time without any delays as in the case of updating the information manually. For example when an order is placed, the inventory can be identified and allocated as soon as the client request is received. During the shipment of the orders, the inventory is deducted automatically and is ready for presentation for a new order ( Jawadekar 2004 pg89). The mechanical and electrical equipments in a warehouse using network deployment are integrated in order to coordinate effectively and efficiently through a computer. This strategy helps to reduce burden on the personnel and reduce the cost of labour in the warehouse. The network deployed can also be used to identify and locate goods within the warehouse. In addition, they can also optimize solutions for utilizing the floor space of the warehouse effectively. This is done using special software installed in a computer. In the modern business world, all warehouses that are aiming to remaining relevant in the dynamic business environment are putting all their resources into action in a bid to attain ideal warehouse operation parameters. All the equipment in this type of warehouses has to be automated and integrated using a computer network. Deployment of network minimizes human labour used in running manual duties in the warehouse and at the same time cut down the cost of operation in the warehouse. In a highly networked warehouse, materials are received in loads or cases and are then converted into unit loads and a database is then created that will support the storage and retrieval procedure using different users within the warehouse. Adopting mobility within a warehouse is able to boost the number of packages and orders processed on a daily basis. The whole warehouse activities ranging from labeling, picking, and packaging cross docking, and receiving. In a receiving area warehouse for example, the management is in a position to scan the area and identify incoming goods, inspect, redirect or label the shipment. In a similar way, they are also in a position to inspect out going shipment to ensure accuracy in the delivery of the orders placed. Conclusion Warehouses and logistics provide dynamic elements in the services that they offer to distance themselves with their competitor in the market. Good strategic warehouse managers are also striving through innovation and creativity through network deployments to meet the vigorous customer demands in the market ( Bidgoli 2010 pg67). As they struggle to take on the responsibilities, they are also faced with many risks that they have to assume. This also applies to firms that engage in contracts with warehouse especially those which are not owned publicly or by the organization. They modify the facilities and technology within the warehouse to meet the needs of the customers. References Bidgoli, H. (2010). The handbook of technology management. Hoboken, N.J: John Wiley & Sons. Jawadekar. (2004). Management Information Systems. Gardners Books. Saxena, R. S. (2009). Inventory management: Controlling in a fluctuating demand environment. New Delhi: Global India Publications. American Production and Inventory Control Society. (1981). Annual International Conference proceedings. Falls Church, VA: The Society. Bowersox, D. J. (2013). Supply chain logistics management. New York: McGraw-Hill. Read More