In a previous post, we discussed the Practitioners of Lean Manufacturing often cite Warehousing, Fulfillment and Distribution as a form waste or muda, as spelled-out in the Toyota 7 Wastes. In fact, half jokingly, lean proponents have called a critical piece of internal supply chain technology – the Warehouse Management System as “Waste Management System”. But, that position is often more dogmatic than practical – Indeed, even Toyota has warehouses – several in fact – that provide replenishment of parts to their auto manufacturing plants.
There are at least 3 critical items that allow you to reduce costs and increase service level in warehousing regardless if your warehouse operations is onshore or offshore:
- Tight and Necessary Warehousing Processes, including the right tools such as good Barcode Solutions.
- What Warehouse Metrics do you have in place to help you determine if your processes are going well or not.
- You warehouse location is optimal in the first place to meet service level commitments.
- These together will help you reduce costs in your warehouse.
Until there is pure pull up and down the supply chain, we’re going to continue to need buffer stock along the way to account for supply shocks. As a practical matter, we need Warehouses and they continue to play a critical role in Fulfillment and Distribution and in the larger Supply Chain.
Still, the goal of any Fulfillment and Distribution center is to enable quick response to the customer and highly-accelerated inventory flow, in order to cut the lead time from company to customer – a Lean Fulfillment Operation. To make sure this is accomplished, internal Fulfillment Center processes are necessary. To make sure this works optimally, you also have to make sure you have determined where your warehouse should be located.
In general, below are the processes you’ll find in any Warehouse, Fulfillment Center, or Distribution Center:
In general, the above major Processes Paths such as Purchasing, Order Management or Order Fulfillment, Receiving, Inventory Management, and Shipping and their respective internal processes are core to any Fulfillment Operation.
Other ancillary but very important pieces of any Fulfillment Operation is Safety, Human Resources, Facilities Management, Process Engineering and Software Engineering, and Transportation Management.
In an upcoming post, we’ll discuss the metrics associate with these core Fulfillment Operation processes, entitle Fulfillment Services Metrics.
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Order Fulfillment says
Funny how Toyota and other learn manufacturers regard fulfillment as waste. This stock isn’t going to transport and store itself.
Ted says
From a production perspective, warehousing storage is often the by product of poor demand management. There is alwasys the necessity to retian working stockpiles but many companies over stock simply because they do not forecast their supply chain effectively, see it time and again. Logistics stockpiling is another ballgame, typically stock accumulates to afford cheaper transportation and movement of goods. The dockyards of Dubai are a good example, hundreds of thousands of cars gathering dust while they wait to be forward supplied.
Raj Sharma says
I like the image that you have shared with us in this article. It illustrates all the important warehouse management processes effectively. This is really a very informative article that I have come across today. I will definitely share this article with my family and friends for their reference. Thank you.