Logistics: Modern Warehousing

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Table of Contents

Logistics
Modern Warehousing building Flexibility in Operations
The trade-off between Present and Future Investment
Conclusion
References

Logistics

This paper discusses how new technologies and new techniques are changing the fundamental ways in which warehousing is carried out. Increasing competition coupled with higher demands from the consumers for value addition drives the need to significantly cut costs and find new ways to add value all along the supply chain. The key is to cut costs by doing away with redundant activities, and focusing on making the organization leaner, so it can react faster to changes in the market. Efficient supply chain management has become critical in adding flexibility in the organization, so new systems are being developed to not only automate activities but efficiently coordinate and control them in such a way that maximum value is delivered to the end consumer.

Modern Warehousing building Flexibility in Operations

New technologies and modern software are reshaping the way warehousing take place. For example, Warehouse Management Software started to flourish in the 1980s, but now, by integrating with other modern software, it is building much more flexibility in the companys operations.

The Warehouse Management System gives more control to the supervisor by keeping a track of inventory and on the people dealing with the inventory. The software uses statistics and demand trends to forecast weekly activities and inventory requirements. It has helped to significantly cut down costs, reduce delivery time, and the number of workers required. With lower delivery time and lower costs, the end beneficiary is the consumer, who enjoys higher quality products at lower costs.

This system, integrated with other software yields even more benefits for the company. WMS coupled with Warehouse Control System (WCS) enables the supervisor to see the status of the inventory in real-time, with updated information, enabling spontaneous, on-the-spot decision making (Cutler, 2009). Thus, the WMS keeps track of inventory and people, and WMC helps maintain control over operations by enabling the supervisor to access real-time updates.

Similarly, future systems will be such that the WMS will interact directly with the material handling equipment, thus enhancing the speed and building more efficiency into the system. By integrating systems in such a way, the supervisor gets consolidated, up-to-date information, and he is thus in a position to make spontaneous changes as far as inventory management and delivery are concerned. Such consolidation of systems also paves the way for just-in-time systems, where the order amount is smaller, thus inventory levels are lower. The result is a cleaner way of working by pruning down excessive amounts of inventory and workers required to handle that inventory. When operations are leaner, the company automatically becomes more flexible and reactive to change. (Graham, 2003)

Another technological advancement that is fast revolutionizing warehouse management is Radio Frequency Identification (RFID). This technology goes one step further from bar-coding, as this form of identification can carry a lot more information than bar codes, and this information can be modified or updated. Moreover, RFID also allows inventory to be accurately tracked. Again, this allows the warehouse supervisor to get updated information with regards to the status of the inventory and puts him in a position where he can make on the spur, informed decisions, thus making operations more flexible and adaptable. (Graham, 2003)

The best part about RFID is that its developing technology and only in its early phase is showing enormous potential for a huge success especially in a logistical business where tracking of products is required. This technology puts a company closer to its dream of efficiently manage its supply chain where inventory losses are minimized, holding costs are diminished and ordering takes an optimal accuracy thereby reducing this cost as well.

In the future, there will not only be integration of various software and systems, but also the integration of software with personnel. Workers would be continuously logged into the system and remain connected through touch screen or voice-activated technology. Not only this, but suppliers would also have access to the networks. Thus, there would be more transparency in the entire supply chain and effective communication and coordination would pave the way for a more efficient and cost-effective way of managing the supply chain. More communication and real-time coordinated activities would again build more flexibility into the system, whereby all relevant parties would be able to respond to each others needs and demands in a fast, cost-effective way. (Graham, 2003)

In order to successfully use the latest technologies available to cut costs, reduce redundancies, and build more flexibility in the supply chain, it is, therefore, necessary to integrate different systems available so as to maximize their efficacy. At the same time, personnel also need to be integrated with the system, and the system should be such that it allows for all relevant parties to be networked together so they can constantly coordinate and communicate with each other. Supervisors and workers need to be trained as to how to effectively utilize the technology available so they know how to fully exploit it.

The trade-off between Present and Future Investment

The management of the company can either allocate its resources to cut current warehousing costs, or it can plan for the future by making investments, and carrying out research about the upcoming technologies which will make warehousing more efficient in the future. The trade-off here is that investing in the future will result in long-term profitability, but might raise current costs incurred to conduct research, training, and investments in the latest technology. (Tompkins, 1998)

Incurring this trade-off, however, is necessary in order to maintain sustainable competitiveness. Unless warehouse design is updated and kept in line with the latest technology, processes will not be streamlined to the extent that is needed to cut costs and deliver maximum value to the customers. In such a case, there would be no return on investment and thus contribute as a loss to the company.

Conclusion

This paper has discussed various technologies that are being developed which will revolutionize modern warehousing. Some of the technologies named here include integrated Warehouse Management and Warehouse Control systems, Radio Frequency Identification systems, and networked supply chains. All these are geared towards pruning down redundant activities, making the organization leaner and more cost-effective, and in doing so, making the supply chain more flexible.

However, it is advised that organizations should not rush into any technological shifts before carrying out an adequate cost-benefit analysis. Every organization and every industry is different; therefore, each company must do its own research to see whether the benefits gained from technological shifts justify the costs incurred. Also, research needs to be done on what technology is best suited for the organizations particular nature of business. (Rafla, 2006)

References

Cutler, T. R. (2009). Warehouse Management Systems vs. Warehouse Control Systems. Web.

Graham, D.D. (2003), Warehouse of the Future, Frontline Solutions; Duluth;2003.

Rafla, R. (2006). The Analyst Corner: Warehouse Management. Web.

Tompkins, J. A. (1998). The Warehouse management handbook. Tompkins Press.

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Logistics: Modern Warehousing

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