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Warehousing Strategies

Darlene Ames

SNHU

08/05/2017

Warehousing Strategies

Warehousing is a complex task that entails very many variables. This, therefore, makes it a not so straightforward operation. Managers in charge of warehouses have to make sure that there is an efficient flow of goods inside and outside the facility, maximize the layout of the building, ensure fulfillment of orders, and products are in stock but not overstocked. In addition, they should also make sure that there is profitability and the maximization of the labor costs and other overhead costs. With these many factors to balance, warehouse managers and other personnel should put into consideration how they weigh every decision they make and the pressure they receive from each stakeholder (Guo, 2016). It is evident that the warehousing operations should always be more productive, less expensive, and maintain the smooth supply chain. In this case of Caterpillar which is located in South Korea, there are a number of strategies that the company can implement in its warehousing operations in order to ensure that they satisfy their customers and at the same time save on the operational costs. Below are some of the proposed strategies that can assist Caterpillar to achieve its warehousing goals and objectives.

Elimination of Unnecessary Steps

The warehouse managers should take the time and access all the steps that goods have to go through when they enter and leave the warehouse. After this, the managers should come up with a way in which they can eliminate unnecessary steps that consume resources in terms of money and time. For example, the workers can move the goods by using one large vehicle at once instead of using smaller vehicles that will consume plenty of time in loading and offloading (Donath., et al, 2002).

Use of Vertical Storage

Taylor (2007) suggests that using taller containers can make a very significant difference in how much goods one can store n a distribution center or a warehouse. To achieve this, the warehouse personnel can combine bins with shelving in order to maximize the storage space nearer to the floor. When the organization optimizes the storage space, it can keep more products without having to consider other expansion expenses.

Priorities Warehouse Safety

Warehouses are facilities prone to many accidents and therefore, Caterpillar should make a point of making safety in their warehousing facility a top priority. Many warehouses consider meeting the minimum safety requirements as the best option. However, both the managers and the subordinates of the warehouse should ensure that they create and implement a culture of safety. A safe warehouse fosters cost saving through increased productivity and higher employee satisfaction, reduced absenteeism, and lesser workplace disruptions because of accidents.

Establishment of Advanced Shipping Notifications

The warehouse should implement electronically transmitted advanced shipping notifications (ASN). Depending on the conventional receiving and shipping schedule can result in inefficiencies. Disruptions and delays may happen and therefore cause deviation from the regular schedule. Such issues begin from improper staffing in the receiving dock and then trickle down to the warehouse. However, the organization can plan labor more certainly by the use of advanced electronic shipping notifications. This method is bound to adjust transportation activities and order fulfillment to make sure that there are proper services that will please the customers (Bansal, 2009).

Cost Savings

Caterpillar can implement many standard methods to ensure that they operate their warehouses in cost effective and efficient ways. One such method is the implementation of a quality management system as a means of making sure that there is conformance to specific requirements when it comes to the handling, storing, and transporting of its products or materials. Once the system is in place, Caterpillar should strive at improving its warehousing effectiveness. This will allow the organization to reduce losses caused by mishandling or mismanagement of products and thus save the company a lot of money. In addition, the organization will be in a position of attracting and retaining its clients a factor that will make sure that they maximize on their labor as well as overhead costs. Caterpillar should also implement management responsibility as a standard in their warehouse operations. The top management who control or direct Caterpillar at the highest level should provide evidence of the company’s commitment to implementing the international storage and handling quality expectations. A member of the management team in charge of the warehouse should constantly ensure that the company observes the recommended standards. When the management becomes serious with compliance issues, it will reduce losses and lawsuits brought about by damages caused to products because of negligence.

Customer Needs

Typically, customers hire services and expect the providers to be effective. In this scenario, implementation of quality management systems will see to it that the customers get the value for the money. These systems will reduce levels of inefficiencies, as they will also motivate the workers to perform hence increasing their productivity. Sound quality management systems are bound to bring order to the Caterpillar’s warehouses, which will in turn increase efficiency and eventually met the needs of the customers. When the managers of the organization take full responsibility for the warehousing operations, they will make the point of training and supervising their subordinates in a manner that will make them produce desirable output that will consequently satiate the needs of the customers.

Benefits of a Centralized Warehouse

The first advantage that comes with having the warehouse in the same location as the manufacturing plant is that the organization will have its entire staff in one area and therefore monitoring the activities will be easier. This is also beneficial to the customers since they will be picking their products from a centralized location and in the case of complaints, they can be attended to instantly. In addition, the staff of the organization will concentrate more on the customer’s needs as opposed to the coordination of shipments. By having all its operations in one location will also help Caterpillar to reduce on overheads like leasing of extra office or warehouse space.

References

Bansal, S. (2009). Technology scorecards: Aligning IT investments with business performance. John Wiley & Sons. http://onlinelibrary.wiley.com/doi/10.1002/9781119203018.ch10/summary

Guo, X. (2016). Storage Policies and Maintenance Support Strategies in Warehousing Systems. Springer, https://link.springer.com/content/pdf/10.1007%2F978-981-10-1448-2_7.pdf

Donath, B., Mazel, J., Dubin, C., & Patterson, P. (2002). The IOMA handbook of logistics and inventory management. John Wiley & Sons, http://textarchive.ru/c-2545976-p2.html

Martin Diaz, L. (2006). Evaluation of cooperative planning in supply chains: an empirical approach of the European automotive industry (No. 25825). Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).

Taylor, G. D. (Ed.). (2007). Logistics engineering handbook. CRC press, https://www.crcpress.com/Logistics-Engineering-Handbook/Taylor/