Warehousing: "Sourcing Is the New Era Commodity, Yet with Continuous Evolution

E mer gi ng Ma na ge rs

Mr. Mahesh H Sohanda MBA Batch 2020 -2022 ICFAI Business School, Hyderabad

W a reh o usi n g: "S o urci n g I s th e Ne w E ra Co mmo d i t y, Y et W i t h Co n t i nu o us E vo l u ti o n ” E EE vo l u ti o n”

Warehousing and warehouse management is a In the ABC warehousing inventory management part of the logistics management system, which model, all items within the warehouse are classified in itself is a component of the availability chain. by their volume into three categories; A, B, and C Warehousing plays an important role in the type items. This segmentation allows the inventory supply chain process. A warehouse is a large, controller to separate the foremost important spacious place that is used for the storage or inventory items from the not so important items and accumulation of goods. allows the controller to focus more on better Although this is often viewed simply to store including the proper amount of Safety stock to goods, warehousing plays a fundamental role avoid stock-outs. within the logistics system. Inbound functions assist to prepare for storage as well as outbound This inventory system is usually used when functions pack and ship orders, resulting in inventory management resources are scarce and/or benefits for both the business and customers. there is a scarcity of an accurate inventory

Some benefits of warehousing can be:

 Storage Facility

managing the upper inventory value items management system present.

Steps to be taken in ABC warehousing:

 Additional Revenue  Conduct inventory survey in warehouse.  Distribution  Compile demand and production data.  Price stabilization  Create a list of the volume of stock and their  Production support value.  What is ABC Warehousing?  Classify the inventory in three types (A, B & C) based on the above list created.

How Covid-19 has affected the Warehousing warehousing capacity located within the incorrect Industry. markets.

This highlights how the warehousing market is  Increase in E-commerce facility. close to change. A variety of those changes are getting to be driven specifically by Coronavirus; approaching years from a health and safety consistent. However, if the market ‘new normal’ is wild variability then such a model will leave companies others are getting to be trends that pre-existed the Coronavirus has helped to accelerate e-commerce pandemic but which may be accelerated by the sales. the requirements of e-commerce social and economic changes which it wrought. warehousing are quite different from those of facilities serving grocery retailing, main street  In House to Third-party Logistics shops, or department stores. they have to be Following the crisis, manufacturers and retailers are getting to be more likely to require large numbers of warehousing staff on their payroll as a risk the utmost amount as an asset, especially with the ever-present possibility that Coronavirus may return at some point. Many could even be tempted to believe that this is often a challenge it'd be better for a third-party logistics provider to affect. One of the key strengths of third-party logistics is their often delivered by a selection of trucks and vans to the end-user. this is often in contrast to the more infrequent delivery of consolidated items to at least one store by truck and trailer. this means that warehouses are getting bigger as more room is required for the physical handling of various smaller packages. Also, e-retail facilities are generally functional round the clock, picking and packing shipments for next day delivery. ability to manage large workforces and these challenges will only increase within the  Increase in Automation designed for the fast flow of small, individual items perspective. The threat of Coronavirus – or for that matter, any disease – might motivate and encourage warehouse  Long term to short term logistics contract operators to increase levels of automation within There will be a move from long term to short term for the installation of automation and government contract lengths. One of the challenges of a highly incentives for capital purchases can be taken into volatile market is that warehouse capacity is consideration. Running contrary to this, within the typically secured by manufacturers and retailers on short-term unemployment levels and thus the a medium-term basis (3-5 years). Some contracts migration of workers from the most street retail are longer which can extend up to 10 years. This sector to logistics will make labor abundant and could be satisfactory during a stable economy, cheap. However, at the end of the day, the sector’s especially in sectors like a commodity, where adoption of automated handling equipment and demand year-on-year for logistics services is robotics is inevitable. their operations. The low cost of borrowing money  More Greener Warehousing exposed to the danger of getting an excessive Following the crisis, there will be renewed to amount of (or too little) inventory also as specialize in sustainability. The drop-in carbon

emissions during ‘lockdowns’ will encourage challenged. It certainly won’t end in a whole environmental lobby groups and governments to reversal of industry regulations, as it specializes in put in place policies that prevent (or a minimum of low inventory. Technology supporters will little slow) pollution levels from returning to their question maintain that visibility will play a crucial previous highs. These policies are getting to be role in allowing inventory levels to be constrained mostly aimed toward the transport element of whilst ensuring customers’ demands for ‘instant’ logistics but warehousing also is going to be fulfillment are met, especially within the e-retail expected to contribute. This might mean that new sector. On the other hand, contract lengths could buildings will get to conform with increasingly even be pushed down, as clients become wary of prescriptive energy standards and good practices the danger posed, and thus the trend is often shifted like LED lighting. to 3rd party logistics company. Additionally, to chain trends of the past three decades being this, investment in automation will increase in Conclusion: warehouse companies. The event of modern Coronavirus will cause many of the key supply become more sustainable. warehousing is to satisfy these new needs and

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