The Role of the Warehouse in the Supply Chain

The warehouse is not just a logistical middleman or storage facility anymore. The advancement of the warehouse as an independent, valuable asset has escalated in recent years as the role of the warehouse expands and evolves. Driving this change is a combination of advancing technology and the desire by many companies to eliminate links in the supply chain, thereby ensuring costs are optimised without compromising on customer service.

The Supply Chain

The supply chain refers to a wide range of functional areas, including inbound and outbound transportation, warehousing, and inventory control. Production, order processing, and customer service also fall under the supply-chain system. The latter three areas are greatly affected by the efficiency of the warehouse. However to understand the role of the warehouse in the supply chain, we need to understand that there are two main types of warehouses—production and distribution. Both are critical links in the supply chain network, with various sub-roles covering:
• Raw materials
• Work-in-progress
• Finished goods
• Distribution
• Direct to customer demand

The Warehouse

The warehouse plays a vital role in the product flow between the supplier and the consumer. With the rapid growth of computers over the past few years, warehouses have been going through various challenges, such as globalisation, heightened customer expectations, and product diversification. In order to cope the warehousing industry is taking the challenges and using them to their advantage. With warehouses implementing innovative approaches, including shared knowledge through global partnerships; direct delivery to customers from Internet orders; and incorporating mezzanine floors to store safety stock supplies. The way warehouses collect, transmit, and utilise information in the modern age, has actually allowed better control for businesses over their warehouse operations.

Understanding the System

Understanding how products move through the supply chain can help you identify areas of waste, as well as potential. Then you are better able to make informed decisions about how to make your warehouse work for you in the supply-chain system. Can you incorporate value-added services such as branding, labelling, assembly, and packaging? Value-added services increase customer satisfaction and reduce costs of finished goods. Are you able to centralise operations and place your head office at your Melbourne warehouse? Mezzanine floors can be installed to utilise vertical space for an office suite. Can goods be manufactured in the same warehouse as distribution? This allows for shipping directly to customers and affords the opportunity to streamline operations. Do you need to stock pile safety supplies, so that goods are available when your customer needs them? This boosts customer response time and in turn, customer satisfaction.

If your warehouse isn’t keeping up with the pace of your business, you might need to step back and take a look at the bigger picture. Taking the time to understand supply chains will allow you to generate additional value from your supply networks as well as your warehouse. The role of the warehouse in the supply chain is ever evolving and if you can evolve along with it, you will get a competitive edge that will ensure the longevity of your Melbourne warehouse.


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