American Western Distribution

Defining Warehousing Logistics

Warehousing management is a key part of the supply chain and is primarily concerned with controlling the movement and storage of material within a warehouse.  Warehousing logistics and management includes processing associated transactions including shipping, receiving, and the storing and retrieving of items (put away and picking).

The prime objective warehousing management is to facilitate the movement of goods through the supply chain to the end customer. To that end holding inventory is just one of a variety of roles that a warehouse performs.   Most warehouses also have a cross-docking center, assembly facility, packaging facility, and a returned goods center. Warehouses are expensive so warehousing management and logistics management play a key roll in both customer service and maintaining reasonable costs.

Warehouses need to be designed and operated in line with the specific requirements of the supply chain as a whole. Warehouses are justified where they are part of the least-cost supply chain to service levels that need to be provided to customers.

Order picking represents a key objective of most warehouse management strategies.  Order picking involves the extraction from inventory of a particular good or series of goods required by a customer(s).  Then these goods are brought together to form a single shipment.  The shipment must be accurate, on time, and in good condition. This is a critical activity because it is both costly and it directly impacts customer service. Consequently the design and management of picking systems is a critical component of warehouse management.

Receiving is important as it forms the basis for all subsequent activities of the warehouse. Dispatch activity is critical as it is the customer facing aspect of the warehouse and therefore it must operate effectively to ensure that all goods are dispatched to the customers on time. Operational failures in either of these areas will quickly result in service level failures which may be damaging to the company and may be costly to rectify.

The receiving and dispatch areas of the warehouse represent the direct physical interfaces with the suppliers and customers and need to be designed as an integral part of both the upstream and the downstream elements of the supply chain.

Good warehouse management is key to the supply chain. It buffers uncertainties and breakdowns that may occur in the supply chain. When properly managed and appropriately stocked, a warehouse provides a consistent supply of material when it is needed.