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Supply Chain Management

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Discuss And Illustrate The Economic Justification For Establishing A Warehouse Storage has always been an important aspect of economic development. For manufacturers, strategic warehousing offered a way to reduce holding or dwell time of materials and parts. On the outbound side of manufacturing, warehouses can be used to create product assortments for customer shipment. An important charge in warehousing is maximum flexibility. Ideally a warehouse will simultaneously provide economic and service benefits. Warehouses offer many economic benefits for companies. One economic benefit of a warehouse is derived from the ability to consolidate products from a number of production plants into large, consolidated shipments delivered to …show more content…

This operation is used by retailers for the fast moving store inventories. The distributor cross dock process consolidates inbound products from different vendor into mixed product pallet, which is delivered to the customer when the final item is received. The transportation cross dock process combines shipments from a number of different carriers in the less-than-truckload ( LTL ) and small package industries to gain economy of scale. The retail cross dock process involves the receipt of products from multiple vendors and sorting onto outbound trucks for a number of retail stores. The benefits of cross docking is to reduction in cost, as the product no longer requires picking and put away in the warehouse. The reduction in time from production to customer, which helps improve customer satisfaction. The reduction in the need for warehouse space, as there is no requirement to storage of products. The objective of supply mixing is to support manufacturing operations. Products and components are supplied to a mixing warehouse located in close proximity to the manufacturing plant, when requested by the plant, necessary sortation will be carried out and ship to the plant directly. It is a popular strategy to support manufacturing firms with JIT (Just-In-Time) and MRP ( Materials Requirement Planning) system. Mixing is performed at an intermediate location between shipment origin and destination. In this process the inbound

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