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Definition and Objectives of Warehousing Management

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Definition and Objectives of Warehousing Management

Definition of Warehousing Management

Warehouse or warehousing serves to store raw materials for the production process or a place to store goods produced in a certain amount and time span which are then distributed to the intended location on request.

That is, the warehouse is a place where goods obtain or undergo the process of receiving, storing and releasing goods.

The objectives of warehousing management are as follows:

1. Cost reduction

2. Reduction of capital or goods

3. Efficiency of time to the next process

4. Guarantee the quality of goods

5. Improve service to customers

There are several reasons why companies store their goods in warehouses, among others :

1. Reducing transportation activities and production costs

Moving goods by means of transportation always has a minimum volume value that makes it cheaper or more expensive. By minimizing the transfer of goods from the factory to the warehouse, it will save and speed up the next production process.

2. Assist the production department in providing goods.

To produce an item, the factory must do so with a minimum of a certain SKU or production unit which causes lower production costs. 

If the use of production machines is used every time different types of goods are needed, it will create high costs and short preparation time.

3. Assisting the marketing department in providing services to consumers.

The added value expected by consumers is the speed of delivery of goods when a request is made by consumers. To ensure this can be done, one way is to ensure that the stock of goods is stored properly in the warehouse.

Maintain the quality and safety of goods. The more often goods are moved, the higher the chance of damage and a decrease in the quality of the goods. 

By storing in the warehouse, the goods will be protected and the quality will remain the same because they do not move from place to place.

Requirements to be a Modern Warehouse

1. Professional Human Resources

One of the important requirements to become a modern warehouse is to have professional resources. To achieve this, continuous skills training is needed. 

Only modern companies have the spirit of skills training for their employees, and not just work and get paid. With this training, employees will automatically be given the latest knowledge related to modern warehouse methods and equipment. 

Therefore, if it is true that your company has conducted this skill training for all employees, then you should be proud because you are already living in warehousing management that has a modern reputation.

2. KPI

Key Performance Indicator (KPI) or also known as Achievement Figure Indicator (IAP) is the main characteristic of modern warehousing management. 

The warehouse seems to be very large, but when the General Manager was asked how much the daily picking capacity is in the warehouse and answered "There are a lot of them", it can be concluded that the warehouse is a traditional warehouse and not a modern warehouse.

3. Safety and Security

Modern humans always prioritize safety and security at work. To achieve maximum results, these two elements are the basic requirements that must be met by modern warehouses. 

This means that modern warehouses always prioritize the elements of safety and security above other goals. 

If your warehouse, which may only be 1400 m2 in size, but since its establishment 12 years ago, there has been no “time loss” caused by an integrated accident and safety factor, which is marked by the loss of goods that are below standard (even tends to be 0%), then that is actually what is happening. referred to as a modern warehouse. 

The problem is, how the warehouse strives to achieve such a high level of safety of course requires hard work and high operational standards. 

Workers and staff must always wear safety shoes, pallets are placed in a special place, are not allowed to eat in the warehouse and always register themselves when entering or leaving are some of the businesses that reflect the modernity of a warehouse.

5 Main Warehousing Activities

There are 5 activities that are carried out in a warehouse and are grouped into 3 major activity groups. This applies to all warehouses, regardless of the type of warehouse, whether FMCG, Pharmacy, Oil and so on.

3 groups and 5 main activities of warehousing are as follows:

  • Receipt of goods
  • Put away, Storage of goods
  • Picking, Pack & Sorting, Delivery of goods

Thus a brief review of the Functions and Purposes of Warehousing. Hopefully this information is useful and can add to your insight.

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