Trident University International
Module 3 CASE
LOG401 INTRODUCTION TO GLOBAL LOGISTICS MANAGEMENT
The functions of the warehouse of the past were to store goods that were being made. These goods were stored from the time of manufacturing to the time they were sold and the warehouse was used to protect the goods. These goods were protected from theft and from the elements of nature.
In the past when goods were stored in public warehouses the warehouse receipt was used as collateral for raising finance. One important function of warehouses in the past was to store the goods so that they could be bulked together and shipped as one consignment. Grading and branding of goods was also done in these old warehouses.
However, now the functions of the warehouses have changed. Today the focus is on the speed with which the warehouses can store the goods and how quickly they can be retrieved and delivered. The function now is to enable trucks with containers to delivery large quantities of goods to a warehouse and to respond fast to customers. The function of the warehouse is to reduce the cost of transportation, enable large purchases and reduce costs, and speed up deliveries. Modern warehouses are also made to reduce material handling costs. The modern warehouse enables immediate identification of products, which enables flexibility in storing, and helps reduce freight costs.
Currently, there are several value added services that are provided by warehouses. These include delaying the labeling and final assembly of products till customer orders are received or until store requirements are received. The main objective is to increase flexibility. Another value added service that is provided by warehouses is preparing kits and assortment preparation. In case of promotions, value added services provided by warehousing include shrink wrapping the promotions product with another product or poly-bagging. Breaking of pallets and repacking an assortment of products to suit store requirements or order supplies. Another important value added service provided at warehouses is printing of labels and affixing the right labels to packages.
Warehouses today increase flexibility by enabling cross-decking. The goods that are purchased for one store are sent to a different store because of unexpected changes in demand. This adds to the flexibility of the firm. One of the benefits that Kirkland gets from a large warehouse is that it provides exceptional ease of cross-decking. One of the greatest advantages of cross decking in a retail warehouse is that the warehouse has to carry a lower volume of inventory and this helps reduce costs.
The computerized warehouse management systems are an integral part of warehouse management today. In this context it is important to realize that algorithms that run the software help optimize the use of space in the warehouse, help retrieve products faster, and enable the correct identification of goods. The warehouse management system helps warehouses to move a larger quantity of inventory and have a close control over the goods that were received. Warehouse management makes an increasingly larger use of technology. There are RFID tags, automated storage, and widespread use of bar code scanners. Greater automation means more accurate storage and retrieval and lower percent of goods damaged because of storing or handling. Automatic sorters and checking stations are used by modern warehouses to verify the orders and reduce the need for manual checks.
Contemporary warehouse management systems automate the flow of goods throughout the entire warehouse. The state of art warehouse management systems automatically maximizes the use of space, in addition, it does location consolidation and cross decking. The modern warehouse management systems uses RFID tags and scanning stations to monitor the product flow. The current warehouse management systems enable real-time receiving, putting away, slotting, order management, shipping, packing and receiving returns. Modern warehouse management systems use voice recognition technology. This enables employees in a warehouse to communicate orally and receives instructions on warehouse operations including slotting.
Kirkland’s new system provides improved information to the management which provides full scale visibility and helps and provides flexibility. True, Kirkland is shipping more and has saved money on freight; however, its facilities are not cutting edge experience. Kirkland makes little use of RFID technology. The company does not seem to record automatically incoming packets, nor does it track the packages as they leave the manufacturers premises. The focus is not on automatic storage or automatic slotting. What Kirkland has done is to economize on the cost of transportation, economic use of space, and cross-decking to enable greater flexibility in responding to store requirements. Overall, Kirkland’s warehouse operations show an improvement over its previous operations but the Kirkland warehouse does not exemplify the operations of a modern warehousing system.
Forger, Gary (2005, Apr.) “Kirkland’s New Home,” Modern Materials Handling (Warehousing Management Edition), Boston Vol 60, Iss. 4: pg 22.
Napolitano, Maida, (2007, Dec.) “Value Turns Warehouse into DCs” Modern Material Handling (Warehousing Management Edition). Boston: Dec 2007, Vol. 62, Iss 13, pg.55