Supply Chain Management Best Practices, 3rd Edition

CHAPTER 8Distribution and Warehousing: Going with the Flow

Flashpoints

• To satisfy the increasing demands of customers, particularly those purchasing products online, companies are adopting omni-channel strategies.
• Cross-docking offers a replenishment tactic aimed at moving products as quickly as possible.
• Knowing how much inventory you need is important, but equally important is knowing where that inventory is.
• Warehouse management isn't so much about space as it is how to effectively use that space.

Warehousing is one of the core functions of logistics, and yet more often than not it tends to be the forgotten stepchild in a company's supply chain. In the SCOR model of plan, source, make, deliver, return, and enable, warehousing is implicit in sourcing (after you've purchased the products, you have to store them somewhere), delivering (products loaded onto a truck had to have first been stored somewhere), and returns, which encompasses the reverse logistics process (see Chapter 10). And yet, according to the 2020 Third-Party Logistics Study, 73% of companies outsource at least some of their warehousing to a third party, a clear indication that they do not consider warehouse management to be one of their core competencies.¹

However, the biggest company in the world—retail giant Walmart—built its discount empire largely on the efficiency of its distribution network. By strategically locating regional distribution centers (DCs) in close proximity to its stores, Walmart ...