Warehouse management involves investigation and implementation of best practice warehouse operations that support firms in meeting their organizational objectives. This is because the warehouse holds the role of coordinating the entire supply chain and affects the success of a firm (Richards, 2017). Strategic Warehouse Management which is based in U.S is interested in opening a warehouse in Australia, which will provide services to several firms. As a foreign organization, the firm plans to open a warehouse with services that will include the management of the movement of goods across two countries. In this quest, Strategic Warehouse Management understands that successful operation of a warehouse is dependent on the location, management, risk mitigation, proper budgeting and financial management as well as proper planning of the warehouse design.
Warehouse Design and Structure
SWM will be serving multiple businesses with the warehouse, there are several requirements for the construction of an efficient warehouse. The first requirement is a proper understanding of the type of products that will be stored in the warehouse. Identifying the features of the products that will be under storage will mainly address the purpose of the storage. Hence, a proper assessment of characteristics such as the number of units that will be in storage, unit weights, and unit dimensions (Richards, 2017). The second requirement will be the space and physical dimensions of the warehouse infrastructure, which have a significant role in determining the layout framework within the warehouse. Establishing the physical characteristics that the warehouse should possess will affect the design of shelves, the capacity of installation, and the way in which goods will be distributed in the warehouse. Various limitations have to be placed into consideration within this requirement. Some of these limitations include access, floors, windows, and boxes.
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The third requirement is the equipment that will be utilized in the warehouse. In a large number of cases, basic warehouse design includes vacant space as well as other elements such as racks, lifts, and transport equipment. As these components affect the warehouse design, they have to be considered when identifying the warehouse design to ensure that it properly adapts to existing project needs. Circulation of goods is also an essential requirement in warehouse design. This refers to the flow that occurs in logistical activities such as receiving products and preparing goods for issuing. Moving products around a warehouse incur costs that require firms to minimize the movement around the warehouse. The detection of this flow is significant as it contributes to deciding what is design is most efficient for the warehouse. Lastly, the personnel is an essential requirement in warehouse design. The employees that work in the warehouse are one of the most considerable assets for any firm. Their organization in shifts and other factors associated with employee requirements are essential to refine the identified warehouse design (De Koster et al., 2017).
The organizational structure refers to the planning and running techniques utilized in the warehouse. A warehouse manager should be employed for the supervision of warehouse activities within the warehouse. The organization structure can be divided into three processes. The first step involves receiving and inspection of goods from suppliers and freight forwarders. The second step will involve inventory and inventory management, which will involve activities such as adjustment reports (Mccrea, 2019). The last step in the organizational structure is the packaging and issuing of goods in storage to supply pickups towards headed to America. Once the supply is issued out, then goods can be appropriately sold.
Considerations of Workforce Management
Due to the wide range of activities that employees will be expected to accomplish in the warehouse, several considerations for workforce management will have to be put in place to ensure that a safe working environment is established. The first consideration is the scheduling of employees so that each member of the staff has an appropriate working team session (De Koster et al., 2017). Employee scheduling needs to be under review and proper time allocated to ensure the completion of each task. This is to prevent the overworking of members of the warehouse staff.
Another consideration is the strategies to be used for employee motivation and training. For optimum performance, the recruited employees should undergo proper training to be well-informed of the skills and capabilities they are expected to possess. This includes the nature of the tasks they will be expected to conduct and existing performance expectations that SWM has as concerning the new warehouse. This ensures that employees are well aware of how they should conduct their tasks and have accountability for their actions. Employee motivation is essential as it will help in attracting potential employees and helping in retaining talented members of staff within the organization. Hence, appropriate motivation strategies for the warehouse's employees have to be identified to ensure a productive workforce.
Key Regulations for Warehouse Management
Setting up a warehouse in Australia requires knowledge of specific concerns and issues which will affect warehouse management. For example, under Nature 20 warehouse declaration, once stock is taken into the warehouse, it can be under indefinite storage without the need for the payment of taxes until they are transferred to another country. The entity under whose name the license of the warehouse is established has the responsibility of ensuring the safety of the goods. Failure to engage in proper warehouse and storage practices will result in actions by the Customs and Border protection authority as the warehouse is under a ‘non-resident’ company. The owner of the warehouse would also have to make payments of specific revenues to the authority. The number of activities conducted within the warehouse should also be minimized to ensure the safety of goods is ensured. Hence, the activities to take part in the warehouse should only revolve around warehouse functions such as breaking bulk.
The importation of all commodities processed o manufactured within the county will have to pay excise duty when being exported and then stored in excise equivalent goods (EEG) warehouses. Moreover, SWM will have to obtain an EEG license if the new warehouse will include the storage of any of these goods. However, businesses that do not have duty charges are not required to hold an EEG license. Based on the type of Australian businesses that have shown an interest in using SWM for the exportation of commodities., the organization will have to identify whether it requires an EEG license or not. Under the Occupation Health and Safety Act, SWM will be expected to provide its employees with a safe working environment. This law requires the protection of the warehouse staff from any hazardous conditions that may affect their health.
Export and Import Procedures in the U.S.
Export and import activities in the U.S. are controlled by the Customs and Border Protection (CBP) authority. This is a body with the legal authority to control and monitor all imports and exports that arrive in and are moved out of the country. This involves the collection of any taxes and duties associated with these processes. Hence, when importing or exporting goods out of the U.S., firms have to seek the approval of the CBP. Moreover, the CBP is responsible for identifying and mitigating any corruption or illegal transactions that may take place within these procedures.
Agencies involved in importation and exportation of goods are expected to obtain the appropriate licenses from the CBP. The requirement for a license may vary based on the product being transported and is decided by the guidelines from the CBP. The firm is then expected to identify a local port of entry that will be used for the importation of goods into the country. If the goods do not require an import license, firms are expected to fill out CBP entry forms within two weeks before their shipment arrives in the country. Most items exported to foreign buyers will not require an export license. On the other hand, all items are under the export control laws and regulations stipulated by the CBP.
Supply Chain Risks
Four major supply chain risks may affect the performance of a business. The first risk is the strategy risk, which is associated with the choice of a specific supply chain strategy. While some firms may overlook the details of the supply chain strategy, it essential to ensure the strategy chosen is appropriate for the business (Olson, 2011). Hence, to mitigate these risks, supply chain managers have to engage in the evaluation of the benefits and limitations of each strategy for the specific supply chain. The manager can then chose the most appropriate alternative.
The second supply chain risk is market risk. Most supply chains have to make decisions as to whether to source materials and supply locally or outsource them from foreign suppliers. Each of these options presents varying costs and levels of quality based on the firm. Using the wrong supply source can result in the receipt of low-quality goods while incurring very high costs. Hence, for the mitigation of these risks, business owners should engage in in-depth market research to ensure that a reliable and supplier with an established positive reputation is chosen.
The third risk is performance risk. A supply chain and its suppliers are exposed to a variety of changes, such as labor strikes and changes in ownership. This can adversely affect the smooth flow of activities within the supply chain resulting in elevated costs. Hence, managers have to constantly review the conditions that surround the supply chain and its supplier and have contingencies in place. By remaining alert to the dynamic environment, supply chain managers can engage in proactive steps to minimize the damage that any changes may have.
The last supply chain risk to be identified is the demand risk. This means consumer demand may exceed the existing supply. This is an extensive financial risk and causes a major disruption in the supply chain (Olson, 2011). Hence, constant monitoring of demand and conducting demand forecasting is essential to ensure that the existing supply of goods in the supply chain matches the existing demand.
Outsourcing and Direct Management
Due to the large extent of operations to be conducted in the new warehouse, SWM should consider outsourcing some operations and engaging in the direct management of others. One of the operations that SWM should outsource is the coordination operations between different shippers, carriers, and other carrier providers. This way, the responsibility and accountability of handling policies and schedules, regulations, and logistics will be taken care of by a third party with expert knowledge (Silva et al., 2019). This third party will have extensive information about existing guidelines and policies concerned with import and export procedures in the U.S. and Australia hence ensuring that there is proper compliance. SWM will also be able to ensure that its importation and exportation operations benefit from the latest technology guidelines. As SWM is a firm that focused on the provision of warehouse solutions to its customers, the firm should engage in the direct management of warehouse activities. This way, SWM will be able to focus entirely on its core activities and utilize existing insights and business intelligence for activities such as inventory management and fulfillment (Silva et al., 2019). Hence, through the direct management of its warehouse operations, SWM will be able to ensure that it upholds the quality of services it provides without the distraction of handling carrier services.
Budget Items
There are several cost categories to be placed under consideration when opening a new warehouse. One of these costs is the license fees that will be required to carry out the necessary warehouse activities to be conducted. Another essential budget item is the implementation of an appropriate warehouse management system, which will be necessary to increase the efficiency of the warehouse. This budget item will include considerations such as the costs of optional modules and the server hardware that will be required to run and monitor activities within the warehouse (Andelkovic et al., 2018). This budget item will be dependent on the types of WMS that the firm is interested in purchasing.
Another considerable budget item is employee and staff wages. As the running of the warehouse will require staff and various strategies centered on workforce management, employee wages act as a necessary budget item for the running of the warehouse. Consequently, warehouse equipment will also have to be included in the budget. For steps such as the movement of bulky items by employees across specific parts in the warehouse, employees will require the use of equipment and machinery. Hence, based on the types of products that will be handled, the proper equipment will have to be purchased.
Success Metrics
Several metrics can be used to identify the success of the warehouse and its activities. One of these measures is the inventory turnover involved. Inventory turnover is essential as it evaluates the frequency at which inventory moves through the warehouse (Mccrea, 2019). It is vital to identifying whether the stocked items have become obsolete or are still in demand. Hence, a high inventory turnover acts as a success indicator for the supply chain and warehouse as it reduces the costs of holding inventory while also indicating high demand for the products being held.
Another important metric is the rate of order picking and packing in the warehouse. Order picking is one of the most expensive processes within a warehouse as it is labor-intensive and requires the complicated handling of goods (Andelkovic et al., 2018). Hence, it can be used to measure whether a warehouse is actually efficient. The performance indicators that can be used within this metric include the number of orders being picked every hour, the costs associated with picking labor, and the order cycle times. A high rate of order picking can be used as an indicator of increased accuracy and speed within the warehouse hence, representing efficient labor.
Conclusion
Proper warehouse management is considerably dependent on the location of the warehouse and whether the warehouse can be adequately applied to meet the existing needs. As already identified, SWM requires a new warehouse that would not only serve multiple businesses but also facilitate the flow of goods across the identified locations. Based on the existing regulations, Australia acts as the proper location for the new warehouse. Moreover, if the correct requirements for the design are applied, and appropriate strategies for workforce management are utilized, then effective warehouse management can be conducted.
References
Anđelković, A., & Radosavljević, M. (2018). Improving order-picking process through implementation of warehouse management system. Strategic Management , 23 (1), 3-10.
De Koster, R. B., Johnson, A. L., & Roy, D. (2017). Warehouse design and management.
Mccrea B. (2019). Six warehouse management trends to watch in 2019. Logistics management
Olson, D. L. (2011). Supply chain risk management: tools for analysis . Business Expert Press.
Richards, G. (2017). Warehouse management: a complete guide to improving efficiency and minimizing costs in the modern warehouse . Kogan Page Publishers.
Silva, L. E. D., Doratiotto, K., & Vieira, J. G. V. (2019). Outsourcing or insourcing logistics activities: a Brazilian case study. International Journal of Integrated Supply Management , 12 (3), 167-192.
