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Home Industry Opinions Warehousing: The crucial link in modern supply chains

Warehousing: The crucial link in modern supply chains

For any economy, it is imperative that the goods produced are managed optimally to avoid unnecessary losses during their journey from production to consumption. As part of the overall supply chain, warehousing and distribution plays a pivotal role to ensure that the goods reach the end consumer at the right time and in the right condition. In many economies, this important stage is often neglected due to lack of infrastructure, thus, effectively giving rise to inefficiencies. Corporations are now looking into this problem and trying to build capabilities to ensure that proper attention is given to the warehousing of their products.

Most organisations have their expertise in the production and sales of their goods but lack supply chain and warehousing competency. Warehousing infrastructures also require significant capital expenditure. To solve this and the bigger supply chain challenge, logistic companies come into play with thorough expertise in the field of warehousing and distribution and willingness to invest in infrastructure development.

A warehouse serves as a place where companies organise their goods and create a systematic supply chain, whether dispatching large-scale raw material or small-scale doorstep deliveries. At the warehouse, each dispatch must be in perfect shape so that the delivery is executed correctly. No matter how lean you make your supply chain, warehousing always remains an integral part of it. In fact, warehousing is such an important link in the overall supply chain, that without proper planning for warehousing capacities, companies could fail and incur heavy costs in terms of not being able to arrange raw material for production or inability to serve the end consumer market due to increased distance to market.

With an option to outsource warehousing to third-party logistics partners, companies can gain better control of their inventory through improved visibility and traceability across this leg of their supply chain. They know precisely which inventory units are about to face shortage due to inventory pressures and which segments have a closer expiry date. These indications can help them tweak their capabilities accordingly and make sure that any negative impact is mitigated promptly without sustaining any losses. Such decisions go a long way to produce and manage a sustainable business. The decision on warehousing not only impacts this leg of the supply chain but also other legs like distribution, transportation and production.

Monitoring demand and supply is extremely important in sectors such as FMCG, where clear visibility throughout the supply chain is necessary to ensure product availability for end consumers. Often, this visibility gets lost in a warehouse where multiple inbounds and outbounds are simultaneously happening on a daily basis. This situation can easily lead to chaos if left uncontrolled and unmonitored. By allowing logistics experts to provide warehousing services, companies can gain complete visibility across their products and inventories and make informed and instant business decisions based on data coming out of the warehouse.

This allows them to get the upper hand on supply and demand management, especially in current times of the Covid-19 pandemic when supply chains have suffered unforeseen losses due to sudden shifts in supply and demand cycles.

Warehousing solutions help the customers in planning and maintaining optimum inventory levels with high accuracy and ensure that each order is delivered in a timely and correct manner. For example, in the case of perishable goods, expiry and batch control is one of the key aspects that must be monitored and managed. With strategic locations and efficient operations of the warehouse, companies can increase their speed to market while reducing the cost to serve. This can help organisations gain an edge in today’s competitive world.

Author of the article: Syed Ammar Arshad, WnD Manager, Pakistan

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