Warehousing in Grocery Industry: Avoidance of Product Expiration and Handling of Product Traceable
Abstract
For every grocery industry, warehousing is an integral part of every logistic system. It plays a vital role in providing a desired level of customer service at the lowest possible total cost. The majority of grocery industry use warehousing in order to accomplish least total cost logistics at some prescribed level of customer service. Warehousing is a primary link between producers and customers.
This paper tackles the challenges of warehousing related to product traceable and product expiration. Basically, the report illustrates that proper use of technology and appropriate location of distribution centre/warehouse is needed in order to provide the better customer service. Through the analysis of location of warehouse, the lowest overall transportation cost, well-develop facilities, and better business environment contributes to avoidance of product expiration and maintain the product traceable.
A lot of aspects are relevant in relation to warehouses pace and layout, such as storage system, material handling system, space requirement planning, material flow design, government rules and regulation and so on.
With the consider the appropriateness of mechanization and full automation, some aspects are relevant in relation to warehouse operations management, for example, Warehouse Management System (WMS), warehouse workforce, material handling management and so on. This report also illustrates that Information Technology (IT) is now a very important aspect for warehouse operation.
Table of Contents
Page No.
Abstract~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ i
Table of Contents~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ii
Introduction~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1
The Body~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1
Warehousing~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1
Warehousing in Grocery Industry~~~~~~~~~~~~~~~~~~~~~ 3
Conclusions~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5
Recommendations~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6
Introduction
Warehousing was once considered as a liability to the organization as it would cost the companies much expense. Previously, in the time in which just-in time gain fame in industries, warehousing was considered a weak link in the supply chain and was thought to demise. However, currently the concept of warehousing is changing as it is now gaining an important part in the supply chain. Basically, with warehousing and the use of proper technology to quickly move products helps a certain business in grocery industry to save time, avoid food expiration, increasing productivity. The right technology enables the flow of information between the workers’ handled devices and the core business systems. In this regard, the challenge to be tackled in this paper related to warehouse management in grocery industry is the handling of product traceable and to avoid product expiration.
The Body
Warehousing
In the interview of Rick D. Blasgen, vice president of supply chain operations for Nabisco, he has observed after reflecting on the new role of warehousing that there are many companies finding that the concept of warehousing that has thought to be a liability move to a new thought of warehousing as a competitive weapon in the marketplace (2001).
In the past years, conventional wisdom held that if a company had a great internal supply chain, it could win the competitive battle. (2001) However, with the emergence of e-commerce and the tight pressures to squeeze costs out of the supply chain, it’s no longer enough to be efficient within your company’s four walls. Companies today particularly the companies in grocery industry need an efficient supply chain from end to end, that is, from the purchase of raw materials to the point where product reaches the consumer or end user. Any failure at any point along this supply chain process can cause to failure to the whole company.
However, warehousing has gain its prominence with the development of e-commerce as increasingly the supply chain are now relying more on warehousing. Consumers today are demanding 24-hour delivery and flocking to another company’s Web site if their orders are delivered late or damaged that companies are squarely pressured on the warehouse to deliver (2001).
Many warehouses are ramping up to meet e-commerce needs by installing new fulfilment equipment and investing in other technologies. Picking and shipping methods are being upgraded, too. Customer service has become of the utmost importance in today’s environment, and warehouses increasingly are being tasked to manage call centres. In addition, with the increased returns generated by the Internet, they are playing a lead role in developing and executing reverse-logistics programs.
In addition, warehousing is becoming prominent as more and more activities are occurring within them. , president of Princeton, NJ-based Boyd Company Inc., has also observed that many of the companies are not only performing traditional warehousing functions, but many of the companies he observed are bringing in functions that are traditionally located at corporate headquarters into the warehouse (2001). These activities includes back office operations, customer service, call centres, accounting departments and editorial functions like producing manuals that go into packaging for consumer electronics products.
Warehousing in Grocery Industry
Currently, Grocery Industry is now having problems in maintaining their products due to the challenges in warehouse such as product traceable and product expiration. In this regard, grocery industries should carefully evaluate the use of technology and position of their warehouse in order to provide the better customer service. The customer and supplier locations and the weight shipped should be observed.
Actually, the grocery industry can use the centre of gravity method that locates a warehouse at a point that minimizes transportation costs for products moving between a manufacturing plant to the market (customers). The Centre or Gravity Approach (Johnson, John R. 2001) locates facilities based on points that minimize transportation costs for products moving between a manufacturing plant and the market. It provides approximate locations of centralised facilities and makes use of distance to compute the ideal location. The answer from using this approach cannot be used as the final location for a warehouse or distribution centre. It must take into account other factors such as geographical location, natural resources (e.g. water is needed for cooling system), population (if source of labour is a requirement, skills), taxes and subsidies, customers, etc. Where possible, using random storage system rather than fixed location system. Randomised or floating slot, storage places items in the closest available slot, bin, or rack. Products are then retrieved on a first-in-first-out (FIFO) basis. This approach can maximize the space utilization in the warehouse. Randomized systems often employ a computerized automatic storage and retrieval system (AS/RS), which minimizes labour and handling costs.
First, grocery industries must know the types of material handling in the warehouse. For example if there are some types of heavy goods stored in the warehouse, must use the efficient material handling equipment, so for the warehouse layout must keep enough space for the equipment to move. For those light goods, the warehouse manager can use high rack narrow aisle racking or high bay, in order to make the full use of space.
Second, make use of Automated-guided vehicle (AGV). It can automatically routed and positioned at the destination without operator intervention, then save the walking space for the operators between pallets.
Last, the racking configuration is also very important. Radio frequency (RF), automatic data collection (ADC), and electronic data interchange (EDI). All these can make the warehouse operation more accurately and computerize; and save a lot of operation space in the warehouse.
Conclusions
Today, with these reasons, warehousing that was once thought as a liability to the company has become an important part of the companies. Warehousing has increasing prominent to the success of any company.
From the challenges in grocery industry, appropriate warehousing maybe used for the storage of inventories in order to maintain product traceable and avoidance of product expiration. Every product manufactured, grown, or caught is warehoused at least once during its lifetime (from creation to consumption). Warehousing functions can make important contribution to logistic systems and company operations.
Every business organisation in grocery industry is determined to know what kind of work they would and would not do for their customers and, in turn, they carefully learn how to fulfil the needs of each kind of customer in their target markets. Thus, they should emphasized the idea to take advantage of the competitive situation not just by being better in how that product gets sold, serviced, and marketed at the customer interface. It requires that the grocery industry creates breakthroughs in how they interact with customers, and design a way of interacting that makes an indelible impression on customers, one that so utterly distinguishes them from others that it becomes a brand in itself. In lieu, the use of technology and the Centre of Gravity method in order to identify the location or the warehouse, at the reference that will decrease transportation cost for products travelling from the manufacturing plant to the clients results to avoidance of product expiration and product traceable.
Recommendations
To avoid product expiration and maintain the product traceable, the use of proper technology and choices of locations for each approach should be considered. Therefore, it is very important to consider the following factors that influence the nature and importance of warehousing:
- Time is one of the most important ingredients in effective warehousing. The best warehouse operation should be designed to reduce the order cycle time.
- Quality of the service that the warehouse can provide is also very important, and users of the warehouse services now expect the best warehouse performance
- The emphasis in using warehouses is to improve asset productivity. Three critical functions are to reduce total cost, reuse and recycle.
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