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My Introspective

by Laurus Nobilis
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Supply Chain

Supply Chain Management:

Warehousing (E)

Supply Chain Management


What was the evolution history of supply chain management? What are the main components of supply chain? How big is the importance of supply chain integration?


Posted: Aug 2011

The warehouse has the interlinking function within the supply chain. The raw materials are received from supplier and stored. Later, the raw material is issued for production. Once the raw material is transformed into finished product it is returned to warehouse again. Finally, after the order processing, the finished good is issued for delivery to the customer.

Supply Chain Management

There are three major functionalities in in warehouse:

  • Movement of goods is composed of following elements

    • Receiving is related to unloading of products or raw materials from transport carrier, updating warehouse inventory records, in order to reflect the arrived products, inspection for damage and quality issue, and verification of received material type and quantities versus shipping document.

    • Transfer and put away is related to movement of the product from unloading bay to final storage location.

    • Order picking/selection. Involves collecting different products from the warehouse bins and compiling them according the customer orders, and creating shipment document. Order picking is important since influences the delivery lead time. On the other side, accuracy is important as well, since inaccurately picked product can cause product rejection from the customer, sales loss, and additional transport/handling cost and customer dissatisfaction.

    • Shipping. Is related to the actual physical movement of assembled orders onto transportation equipment and the adjustment of inventory records. This function is very important, since efficiency reflect to the delivery lead time.

      Supply chain management plays a very important role within the company. The supply chain generate most of the costs of the company, due to the width and complexity of the function (manufacturing, warehouse, distribution). Any inefficiency can create tremendous negative impact to the company. On the other hand, good supply chain management can bring huge benefits and competitive advantage to the company.

  • Storage is related to housekeeping of the products. Storage can use different storing systems ( stacking, racking, automated racking, etc. )

  • Information transfer is important in order to keep other functions updated on the change of stock ( finance, planning, sales, etc. ). Examples of information collected and utilized include inventory levels, throughput levels, stock-keeping locations, inbound and outbound shipments, customer data, best before date, quarantine stock, space utilization, and personnel.

Frequently used initiative within warehousing is cross-docking. Cross-docking involves moving products from the supplier's distribution center through the secondary distribution center without putting it away to minimize storing.

Usually the product is shipped with larger transportation to the cross dock warehouse and than re loaded for smaller distribution vehicles. True cross-docking involves products being in the warehouse for less than 24 hours. Usually time of product keeping is only what requires for the product to be unloaded and loaded to other transportation.


Continue Reading:

Overview of Supply Chain Components
Historical Development of Supply Chain
Traditional and Modern View to Supply Chain
Supply Chain Activities
Order Processing
Demand and Supply Planning
Inventory Management
Customer Care
Integrated Supply Chain
Financial Resources
Integration vs. Non-Integration


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