WAREHOUSE AND INVENTORY MANAGEMENT Essay Example | Topics and Well Written Essays - 2500 words

WAREHOUSE AND INVENTORY MANAGEMENT - Essay Example It is that part of the firm’s logistics system that stores products at and between point of origin and point of consumption. It provides information to the management about the status, condition and disposition level. Warehousing provides the place utility and works as a balance between production and meeting customer needs. Warehouses also support manufacturing, mix products from multiple facilities for shipment to a single customer, break-bulk and are used as a ‘flow-thru’ point along with â€Å"hoarding† point. Warehousing functions include; material handling, customer services, information transfer, and storage. Other purpose is to identify goods, dispatch for storage, hold inventory, recall goods, dispatch the shipment and prepare records and advices. Warehouses also provide services like Co-packing kitting and repair to its customers. With advancement in information technology and changing needs of businesses, Warehouse Management Systems (WMS) have b een designed. These WMS are a key part of supply chain management and aim at controlling the movement and storage of materials within a  warehouse  and processing of associated transactions. Third-party Warehousing: Tompkins,A., Jerry, D (1998) wrote that third party logistics has gained considerable importance and recognition in today’s business world. ... A third-party, then, is a firm hired to do that which neither the first or second party desires to do. Third-part warehousing is defined as the warehousing services provided by a party other than the manufacturer, seller, buyer and receiver of the goods (Skjoett & Larson, 2007). A firm that provides outsourced logistic services to companies is called third-party logistics. These companies undertake all or a part of the supply chain management task of their client. Previously small warehouses were established in order to store the products mainly of food industry but with the passage of time manufacturing industry also started warehousing their material and products. Now warehousing is a vast area and short term contracts are now replaced with long term warehousing arrangements. Reasons: Drucker (1989) mentioned in an article that businesses today are outsourcing their warehousing function because of the following reasons: Now businesses are inclined towards having limited workforce i n order to reduce their cost and liabilities associated with these employees. Third-party warehousing reduces need of work force rather than employing people to manage personal warehouse. As warehouses are now operated with advanced information technology and warehouse management systems, it needs to have professional experts which ultimately raise work force and cost. Third-party warehousing help to maintain source of supply without breaking the chain of supply and provide goods in time to the customers. As the main focus of any business is on customer services, third-party warehouses support the policies designed by a business for customer services. As market conditions change rapidly in today’s