Strategic Warehouse Management, Essay Example
Possessing a reliable warehousing and distribution strategy is crucial for an organization’s success in today’s global environment (Ackerman, 2007). Strategic warehouse management, Inc. company seeks to design, develop, manage, and implement a preliminary plan for a non-resident company. The company has identified marketing opportunities in Australia; consequently, the company needs to exploit the new market through the non-resident company. This paper explores the logistic needs of establishing a non-resident company before the commencement of operations. The paper explores management issues related with setting up of new warehouses (Inmon, Strauss, & Neushloss, 2008)
The paper provides a preliminary development plan which entails submitting warehouse operations in any city situated in Australia. The report also strives to explore key strategic warehouse management implications like design of the management structure of the warehouse, workforce implications, analyze fundamental regulations and other management implications, amongst other strategic warehouse management issues.
Ackerman (2007) argues that strategic warehouse management present practices aimed at maintaining a healthy inventory level as well as lowering logistics costs. Strategic warehouse management presents a management tool designed to protect an organization against conventional changes in warehouse requirements. Strategic warehouse management commences with an effective supply chain design (Ackerman, 2007). A supply chain refers to a network established amongst distinct companies producing, managing, and/ or distributing a specific product. This report is interested in presenting the steps required to get a service or good from the supplier to the customers (from USA to Australia and vice versa). Supply chains are a crucial strategy for many organizations, as such, this report strives to design the most optimized supply chain with the aim of managing operational costs. The Chief Executive Officer (CEO) of Strategic Warehouse Management, Inc. (SWM) is determined to extend their operations in Australia. The company’s marketing team has identified untapped marketing opportunities in Australia and seeks to maximize on the opportunity (Inmon, Strauss, & Neushloss, 2008)
The proposed new branch is a non-resident Company and can be opened in any city in Australia. The new business will offer warehouse services for a variety of businesses situated in Australia. Firstly, this report proposes that any organization or dealers interested in contacting the services of Strategic Warehouse Management, Inc. should be incorporated into the supply chain (Ackerman, 2007). The supply chain should be deployed in ways that augment shareholder value and profitability. The marketing team of Strategic Marketing, Inc. should consider sourcing techniques result to the best financial performance. The preliminary plan should specify the optimal number of plants, distribution centers, and available warehouses to maximize long-term gains (Prabhu, 2011).
Warehouse Design Requirements
Prabhu (2011) continues by stating that data warehousing is one of the powerful tools available to sustain a business enterprise. In present day most of businesses employ warehouse based programs in the designing and executing of data in warehouse database. The process of designing a good warehouse is exhaustive and detail laden. A good design process is one that focuses on location and design. An ample preliminary warehouse design should be managed and sustained by specialized individuals who are also team members. Selecting a location presents the initial step of designing a warehouse. The selection process should realize that the facility’s location performs the function of getting a company close to its clients (Prabhu, 2011). The main performance issue for a warehouse is lead time. This is because the society is marred by high levels of impatience, as such; warehouses should strive to eliminate delay constraints. Strategic Warehouse Management, Inc. should decide whether they require that the non-resident company should be a stand-alone warehouse to cater for nationwide demands. Alternatively, the organization should also consider whether the non-resident company will complement an existing association with another facility or an alternative for another facility (Prabhu, 2011).
Hawkins and Humphries (2009) suggest that the course of designing the warehouse, Strategic Warehouse Management should understand the culture and preferences of Australia clients. Moreover, the multiple enterprise implications call for an extended research into the nature and form of each business that require the warehouse service. A crucial consideration is whether the clients require high availability needs or short lead times. The distance of the warehouse to the clients is also an essential consideration, as it determines consumer choice (Ackerman, 2007).
Before implementing a warehouse design, it is crucial to define the structure of the warehouse and depict it in the management system for successful establishment. The initial step involves definition of individual warehouses, for instance high rank storage, picking area, block storage, and sundry (Prabhu, 2011). Classification of the various storage types is important, as well as grouping. The warehouse number is essential as it helps define various storage locations for a particular plant.
An organization structure illustrates the scope of business operations performance measurements. It also offers the platform for measuring, analyzing, and controlling activities in a warehouse. The operations in a warehouse entail receiving input from suppliers and extending the same to its clients. As such achieving excellence in a warehouse is an ongoing process and is achieved through continuous improvements (Ackerman, 2007). Management implications in a warehouse should be concerned with inventory accuracy, productivity, storage occupancy, and customer service.
Superior service is often the distinguishing element in market growth and customer retention. The business venture that has opened up for Strategic Warehouse Management, Inc. is complex as it involves numerous business enterprises. Consequently the warehouse in question ought to be extremely huge and requires a big workforce. The complexity of the nature of business service required also calls for high specialization and division of labor with respect to the workforce. The employees contracted should be competitive enough to contribute effectively and efficiently to the organization’s financial and service goals. The organizations’ executive should also aim at developing a workforce that undertakes performance reporting and optimize labor planning with the aim of driving revenues higher.
Mobility is another critical consideration for workforce requirements while constructing a warehouse design. Designing a convenient solution for the workforce can be a daunting task. A portable workforce has the right experience and sufficient knowledge on the industry. Moreover, management of the workforce should be swift and efficient and should aim at reducing workloads and employee inefficiencies (Ackerman, 2007).
A non-resident company implies that Strategic Warehouse Management, Inc. Company seeks to maintain the control of the warehouse (located in Australia) in the United States. As such, the company should develop strategic plans aimed at promoting efficiency in collaborative ventures with the entire supply chain of the company based in Australia. The company should also strive to ensure that their Australian clients; with interests in exploring the United States markets, are assisted in their quest. The company can achieve this through maintaining a constant supply chain cost, and offering their clients an analytic paradigm for the improvement and success of their ventures (Ackerman, 2007). The company should develop a strategy that will sustain efficiency in operations and see to it that products get to the distributors and customers at a minimal cost. Strategic warehousing should strive to offer their Australian clients a business foundation for their stock and inventory so that they, in part, focus on sales and marketing.
The United States import and export procedures are stringent but business friendly. Import and export rules and regulations are designed to protect consumers against exploitation and harmful products. Under the provisions of the United States law included in the United States Federal Food, Drug and Cosmetic Act, importers of various products are obligated to ensure that the products are sanitary, safe, and labeled with respect to United States requirements.
Products imported into the United States; especially, food substances, are considered to be interstate commerce. However food importers are highly advised that Food and Drug Administration (FDA) is not authorized by law to approve, license, certify, or otherwise sanction single food importers. The importers are allowed to import food substances into the United States without prior consent by Food and Drug Administration. This holds as long as the facilities, which produce, store, or handle food products are registered with the body. A prior indication of incoming shipment is offered to Food and Drug Administration.
Companies and individuals with interests in bringing their goods and services into the United States for sale should employ the services of Strategic Warehouse Management, Inc. Company. The company specializes in the construction, as well as the integration of all functions and services across the supply chain. In addition, the physical location of the company will aid in monitoring clients’ products across the United States market. The company will also assist the Australian import class acquire worldwide logistics for novel solutions that aid in planning business strategies, accelerate order times, enhance customer service, as well as tighten the control of the supply chain .
This report established that all importers are required to adhere to United States import procedures and the requirements of Prior Notice. Companies shipping products to the United States, at some instances, may find their shipments subject to “Detention Without Physical Examination” by United States import authorities. Importers are strongly advised to maintain their patience as the products are held at the port of entry. This gives import authorities ample time to carry out additional scrutiny, analysis, and testing. The delays arising from detention without physical scrutiny could be lengthy to businesses suffering the loss of time. Furthermore, the delays could lead to poor delivery schedules. In such instances, importers are strongly advised to always seek assistance from import authorities to prevent further loss of business opportunities.
Exporters from the United States should contact the customs and Border Protection Organization (CBP). The body addresses all export concerns of business people and offer export guidance. Export rules vary with country of trade (Prabhu, 2011). For instance, there is no general licensing for exporting to the United Kingdom or some European Union countries. Exported food products should; however, bear general requirements which include special invoice declarations, special labeling requirements, and Certificate of Origin. The Certificate of Origin is mostly required for products containing animal byproducts.
Supply Chain Risks
Risks are a fraction of life and are evident in every business activity. Warehouse owners indulge in risks because of the potential reward associated with the risky venture. Most of the decisions in supply chain management are highly risky (Hawkins and Humphries, 2009). Nevertheless, strategic warehouse management companies always strive to ensure that they adopt effective strategies meant to prevent, reduce, or even eliminate the risk. Uncontrolled risk can be detrimental to the success of the supply chain of Strategic Warehouse management, Inc. company. Supply chain risk management is about identifying risks and mitigating operations against natural disasters and other events.
Some of the major risks associated with supply chain management include routine fluctuations in demand and supply (Hawkins and Humphries, 2009). In addition, mishandling daily fluctuations could present severe implications to the warehouse as the changes accumulate (Prabhu, 2011). Consequently, the phenomenon could result to obsolete and excess inventory, as well as poor customer service if fluctuations are not professionally managed. Other risk implications include rapid growth of the inventory, counterfeit and contaminated goods, changes to IT systems, and changes to the supplier base.
The initial step in mitigating risks to chain supplies is the determination of the most hazardous risks to the business. This report recommends that Strategic Warehouse Management should, in their risk mitigation exercise, identify their most reliable suppliers, as well as major clients. This exercise ensures that the most lucrative revenue source is identified for possible risk mitigation procedures (Hawkins and Humphries, 2009). After prioritization of the supply base with respect to revenue contribution, risk elements which apply to every supplier should be analyzed. The order of assessment should reflect the importance in terms of revenue contribution to the warehouse.
Strategic Warehouse Management, Inc. should outsource the services of actuaries for possible risk identification and mitigation exercises (Hawkins and Humphries, 2009). The company should consult the services of actuarial scientists to help them manage possible risk scenarios likely to be encountered by the non-resident company in Australia. The research experts will help the company handle supply chain risks which come in many forms. The research experts will mostly come in handy in helping the company deal with external risk factors like regulatory, political, environmental, and others. The initial stages of a venture are crucial as they determine future growth and development implications of the venture. Contracting actuaries situated in Australia will work a great deal in putting up a successful start for Strategic Warehouse Management, Inc.
As time moves on, risk factors will change, as well as mitigation strategies. As such, the management of Strategic Warehouse Management, Inc. should align themselves to the recommendations forwarded by the Australian actuaries (Hawkins and Humphries, 2009). An Australian actuarial firm is highly recommended as the firm is located in SWM’s domain of interest. The management of the firm should maintain the strategic plan developed during the initial stages of the non-resident company. The management should strive to manage the warehouse alongside the organization’s principles. A transformational leadership is prerequisite to establish a good organizational culture for the company. Adhering to import, export, and non-resident company rules and regulations should form top priority in the organization’s agenda.
Budget Line Items
Budget line items that need to be considered in Strategic Warehouse Management’s preliminary plan include fixed and variable cost items (Hawkins and Humphries, 2009). Most of the items in the budget line represent operational tools designed to enhance the efficiency of the warehouse. These include salaries of employees, benefits, taxes, and allowances, expenses for space and utilities (rent), communication and postage expenses, consultant/ contractual expenses, and sundry.
This report recommends that the sales levels attained and the trends in inventory should form as the basis for measuring the success of the non-resident company in Australia. An effective warehouse is determined by the flow of goods in and out of the warehouse during operations (Prabhu, 2011). The magnitude of operations per given time should be determined, for consecutive periods. The general trend in the operations (sales and inventory) should be used to dictate the success of the non-resident warehouse located in Australia.
Hawkins and Humphries (2009) recommend that Australian business people should set an effective collaborative venture with Strategic Warehouse Management, Inc. Company. Collaboration will help them realize high sales volume in the United States market, as well as cement their economic influence in the region (Prabhu, 2011). On the other hand, Strategic Warehouse Management Company should adhere to tax and registration requirements of Australia for a successful take-off (Prabhu, 2011).
The company will facilitate the order of supplies across the supply chain, thereby facilitating the development of Australian brands in the United States.
Prabhu, S., & Venkatecan, N. (2007). Data mining and warehousing. New Delhi: New Age International (P) Ltd., Publishers.
Ackerman, K. B. (2007). Practical Handbook of Warehousing. Boston: Kluwer.
Prabhu, C. S. R. (2011). Data warehousing: Concepts, techniques, products and applications. New Delhi: PHI Learning.
Inmon, W. H., Strauss, D., & Neushloss, G. (2008). DW 2.0: The Architecture for the Next Generation of Data Warehousing. Burlington: Elsevier. Data Warehousing Fundamentals for It Professionals. (2011). S.l.: John Wiley & Sons.
Humphries, M., & Hawkins M. C. (2009). Data warehousing: Architecture and implementation. Upper Saddle River, NJ: Prentice Hall PTR.
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