The logistics warehouse plays a fundamental role in the proper functioning of the supply chain. Nestled between the production and distribution processes, it allows adding value to our company’s logistics while optimizing costs and improving the service offered to the end customer.
The logistics warehouse is a space that must ensure a stable flow of goods and information. In addition, it must have as its fundamental objective the optimization, improvement and measurement of its processes. What are the fundamental tasks of these warehouses?
Functions of the logistics warehouse
From the arrival of the merchandise to its departure, the logistics warehouse performs numerous functions necessary for the supply chain.
Entry: the warehouse must not only receive the merchandise, but also plan its entry. It is your task to manage the flow of tickets, the allocation of docks, etc.
Merchandise verification: In addition to the physical unloading process, warehouse operators must verify that the expected merchandise is received, in type and quantity. Reflect possible discrepancies in the delivery notes.
Handling: it is frequent that the merchandise does not arrive as it should be stored. It may be necessary to open it to separate it, repalletize it, label it, prepare it in kits with other products, etc.
Location and storage: Again, we should not only think about the physical process of putting the merchandise on the shelves. Deciding where each piece of merchandise should go based on rotation reasons, proximity to the docks or other products to be handled, ease of access or type of product is essential to optimize processes.
Security: The storage of the merchandise must imply that it is protected, safe and controlled, both with human and technological means (video surveillance, presence control, etc.). In addition to carrying out routine checks on the facilities (cleanliness, pests, breaks or leaks that may affect nearby merchandise, etc.).
Order picking: With the merchandise located, on many occasions it will be necessary to place orders, either with full pallets of product or using only parts of them through picking. We will also have to attend mono-reference orders (a single type of product) or multi-reference (several types).
Departure: once again, merchandise operations must be accompanied by their documentary and informative record. Receive the departure request, prepare it, dispatch it and record the movements.
Merchandise consolidation tasks (joining merchandise for subsequent shipment), even without the materials being stored, are becoming more and more common. If we manage to execute them correctly we can avoid many trips and save a lot of time.
The logistics warehouse must also have designed the flow of materials and internal movements of the merchandise.
Reverse logistics is another of the functions that is gaining more and more weight and in which the logistics warehouse plays a leading role: reception, classification, possible repair work, return to the market, etc.
A good logistics warehouse tries to minimize actions that do not add value to the product
Objectives of the logistics warehouse
What do all these functions pursue? What is at the end of them? What should a good logistics warehouse provide us, whether it is managed internally or outsourced?
Fast delivery: reducing delivery time depends on reducing the time in each of the steps of the process. Being faster in the entries, in the movements, in the preparation of the orders or in the delivery of the merchandise will mean that we put the product in the hands of the recipient sooner.
Quality: Logistics is an exact science. A logistics warehouse must give us the assurance that we have exact control over our merchandise. How much of each product we have, how much we can store, how long it takes us to place orders and how much it costs us to do so, reduce inventory imbalances and losses due to expiration… up to the reliability in the preparation of shipments.
The implementation of software that monitors all these processes is essential in any modern warehouse and will have an impact on customer satisfaction.
Make the most of the available volume: the more rational use we make of our warehouse, the more goods we can house and move in it, even if the space remains the same. For this optimization we have to know the dimensions of our products, their weight, their turnover levels, the seasonality of each product, etc.
Minimize handling and transport: a good logistics warehouse tries to minimize actions that do not add value to the product. Moving the merchandise on more occasions or more meters means more expense and we must have a reason.
For this reason, it is essential to study where we are going to locate each product, taking into account its rotation, its handling needs, its proximity to preparation areas for special orders or labelling, etc.
Reduction of returns for wrong merchandise: every time we make a mistake in the warehouse we will be incurring additional costs and undermining the trust of our customers. If we increase the number of orders that are prepared correctly the first time, we will be improving one of the fundamental performance indicators of our logistics warehouse.
Cost reduction: in addition to improving the service through greater reliability and speed, cost savings is a challenge common to the rest of the objectives. Making the most of the space and human and technological resources available to us will give us a competitive advantage.
For example, according to a study, the 20% of the companies with the worst performance in their warehouse presented more than 0.5% of their products as unsaleable due to poor condition. By contrast, among the top 20% of companies this figure dropped to less than 0.06%. almost a tenth.
An external logistics warehouse makes it easier for us to manage our increases and decreases in volumes
Advantages of hiring an optimized logistics warehouse
If we are not sure that we can optimally manage our warehouse, the best solution is to hire an experienced external provider. Among the advantages are:
Outsourcing of fixed costs, transforming them into variables.
Possibility of optimizing the results with respect to those we achieve with our own resources.
We take advantage of economies of scale through our supplier, who may be better able to invest in innovation, specialized personnel and facilities.
Ability to work hours different from ours: perhaps our logistics needs different hours than the rest of the company and it is possible that an external provider can solve this section for us. Or your company may close in the summer but you must continue to function logistically.
Risk reduction: once we deposit the merchandise in the hands of our logistics partner, it is in charge of assuming the risks that may occur. A way to reduce the risk levels of our company.
Easier to scale. Our jumps in volume, whether up or down, will have to be digested by the provider and will not force us, for example, to have to increase our facilities or change the size of our workforce.
Principles to achieve a good logistics warehouse
exhaustive information; It is necessary to record all the entries, the exits, the internal movements of the merchandise, the technical characteristics of the stored products, the quantity for each batch, etc.
Create a flow so that the information from all these processes reaches the inventory management systems and the accounting department properly.
Identify each product uniquely to always know what we have in stock.
Design the warehouse taking into account our storage needs, in addition to the transits that the merchandise has to carry out, the space necessary for the movement of the machines and the ease of locating and removing merchandise.
The facilities must also facilitate the control of the merchandise as well as the periodic carrying out of physical inventories, to verify the accuracy of what appears computerized.
Synchronize our warehouse with the rest of the logistics and supply chain. Good information management will allow us, for example, to optimize outgoing vehicles -if we complete the preparation of the orders in the expected time and if we are able to find out what type of vehicle we will need due to its size and load capacity-.
Knowing the patterns of purchasing supplies will also allow us to improve the flow of merchandise in the warehouse. If we receive the same total volume of merchandise, but spaced out in more deliveries, and we make it similar to the number and volume of outputs, we will alleviate warehouse congestion.
In the opposite case, if we receive a lot of merchandise at once, we will need more space in the warehouse to locate the same amount of total merchandise. We will also suffer more traffic jams when it comes to receiving the tickets, checking the merchandise, locating it, etc.
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