All You Need to Know About Warehousing Logistics.

Obikoya Jeremiah

Last updated: 1st July, 2024

Understanding Warehousing Logistics
Key Component of Warehousing Logistics
Risks in Warehousing Logistics and How to Handle Them
Warehousing Logistics with SARA

With the increase in demand for products comes the need for warehousing logistics. Effectively handling this part of your supply chain can lead to better customer satisfaction even at a lesser supply chain cost.

In this article, we discuss how we have managed warehousing logistics for the past 20 years for our business and what we think are the key components you should care about.

Looking for a Warehouse to store your goods or a logistics company to handle your deliveries? We can help you with that at SARA. Contact us today.

Understanding Warehousing Logistics.

Warehousing Logistics refers to the comprehensive process of managing the flow of goods in and out of a warehouse. This includes the storage, handling, and movement of goods from the manufacturer or supplier through the warehouse to the customers.

With an effective warehousing logistics management strategy, products are stored efficiently and can be easily retrieved and shipped as needed. This system plays a pivotal role in meeting customer demands, minimising operational costs, and maintaining the smooth flow of goods from production to end-users.

But what are the essential focus areas for optimising your warehouse logistics to achieve peak performance?

Key Component of Warehousing Logistics.

1. Warehouse:

A warehouse is the cornerstone of warehousing logistics, serving as the central hub where goods are stored, managed, and distributed.

As the centre of the flow of goods in your supply chain, the location of the warehouse and how things are operated in the warehouse matter a lot.

How To Manage Your Warehouse Effectively.

Maximise the use of vertical space with high shelving.
Design the layout to facilitate a smooth flow of goods, minimising unnecessary movement and reducing handling time.
Create specific zones for different types of products (e.g., bulk storage, pick zones, packing areas) to streamline processes and improve organisation.
Ensure your warehouse is close to a place of high demand for your products.

2. Inventory:

Inventory refers to the goods or products which are in your warehouse. These are goods that are packaged and prepared for shipping or delivery at the request of a customer.

Warehousing logistics focuses on the flow of these inventories hence for a better customer experience, you have to ensure that your inventory is managed well.

How To Manage Your Inventory Effectively.

Use a Warehouse Management System (WMS) to track inventory levels and locations in real-time, ensuring accuracy and visibility.
Conduct regular cycle counts to maintain inventory accuracy and identify discrepancies promptly.
Use data analytics to forecast demand and adjust inventory levels, avoiding overstocking and stockouts.

3. Order Fulfilment:

Another key component in warehousing logistics is the fulfilment of orders when they are placed. It involves the picking, packing, and shipping of goods to customers.

Among all components of warehousing logistics, this is the point of interaction with customers and should be handled in a correct and timely manner ensuring that customers receive their orders promptly and as expected.

How To Manage Order Fulfilment Effectively.

Implement technologies like barcode scanners, RFID systems, and automated picking solutions to increase speed and accuracy.
Optimise workflows to reduce the time spent on picking, packing, and shipping.
Establish strict quality control measures to ensure orders are accurate and products are in good condition before shipment.

4. Handling and Transportation:

The handling and transportation side of warehousing logistics comprises the movement of inventories to the warehouse, within the warehouse and out of the warehouse in order fulfilment.

Activities like loading, unloading, space optimisation, internal transportation, external transportation and returns handling should be managed effectively to get good supply chain performance.

How To Manage Handling and Transportation Effectively.

Design efficient pathways for smooth internal transportation.
Develop and enforce standardised procedures for lifting, moving, and storing goods.
Schedule dock appointments to prevent congestion.
Plan and optimise delivery routes to minimise travel time and costs.

Risks in Warehousing Logistics and How to Handle Them.

1. Inventory Shrinkage:

Inventory shrinkage refers to the loss of products between the point of manufacture or purchase from a supplier and the point of sale to a customer. This usually occurs as a result of theft, damage, administrative errors, or supplier fraud.

Actionable Steps to Mitigate Inventory Shrinkage.

Restrict access to inventory areas to authorized personnel only.
Conduct frequent inventory audits and cycle counts to ensure accuracy.
Regularly audit suppliers to ensure they meet quality and quantity standards.
Implement thorough receiving procedures, including counting and inspecting goods upon arrival.

2. Equipment Failures:

Equipment failure is a warehousing logistics risk that occurs unexpectedly due to various reasons such as mechanical issues, lack of maintenance, or age-related wear and tear in equipment for handling and transportation. These failures are capable of disrupting operations, causing delays, and impacting overall efficiency.

You need to ensure that occurrences like this are prevented or addressed proactively to minimise downtime, reduce costs, and maintain smooth warehouse operations.

Actionable Steps to Mitigate Equipment Failures.

Schedule routine inspections of equipment to identify potential issues early.
Provide comprehensive training for warehouse staff on the safe operation and maintenance of equipment.
Stock essential spare parts and components onsite to facilitate quick repairs and minimise downtime.
Consider upgrading to newer technologies or equipment with enhanced reliability, efficiency, and support.
Maintain optimal environmental conditions in storage and operational areas to prevent equipment damage from temperature fluctuations, humidity, or corrosive elements.

3. Inventory Obsolescence:

When goods are stored in the warehouse, there is a tendency to end up with goods that become outdated or obsolete before they can be sold or used if the warehousing operation is not done optimally.

This is referred to as inventory obsolescence and it results in financial losses due to depreciation, storage costs, and potential write-offs.

Actionable Steps to Mitigate Inventory Obsolescence.

Maintain lean inventory levels to minimize the risk of excess stock becoming obsolete.
Monitor inventory turnover ratios and adjust ordering quantities based on sales velocity and demand fluctuations.
Regularly review inventory levels and identify items that are nearing obsolescence or have become obsolete.
Partner with liquidation companies or online platforms to sell excess or obsolete inventory at reduced prices if possible.
Offer flexible return and exchange policies to facilitate the return of slow-moving or obsolete inventory.
Adjust inventory strategies and product offerings based on market dynamics to minimize the risk of obsolescence.

4. Supply Chain Disruptions:

Supply chain disruptions could occur in businesses as a result of natural disasters, supplier issues, geopolitical events, or unexpected demand fluctuations, impacting the flow of goods, operational efficiency, and customer satisfaction.

Although most of the causes of these disruptions are beyond your control, there are steps you can take to ensure the effect on your supply chain is minimal.

Actionable Steps to Mitigate Supply Chain Disruptions.

Evaluate suppliers based on reliability, financial stability, and geographical diversification.
Foster strong communication and collaboration with suppliers, logistics partners, and stakeholders to quickly address disruptions and find solutions.
Conduct risk assessments to identify potential disruptions and their impact on warehouse operations.
Maintain safety stocks of critical inventory to buffer against unexpected demand spikes or delays in supply.
Identify alternative transportation routes and modes to bypass congested or disrupted areas.

5. Pest Infestation:

The presence of pests in a warehouse is a potential risk which can lead to damage to goods, contamination of inventory, and regulatory compliance issues. This is usually critical when dealing with products like food, pharmaceuticals, textiles and other vulnerable items.

Infestations can occur due to various factors such as poor sanitation practices, structural vulnerabilities, or external environmental conditions.

Actionable Steps to Mitigate Pest Infestation.

Conduct routine inspections of the warehouse interior and exterior for signs of pest activity.
Establish regular cleaning schedules for floors, shelves, and storage areas to remove food residues and debris.
Seal entry points, cracks, and gaps in walls, floors, doors, and windows using durable materials.
Maintain optimal temperature and humidity levels to discourage pest activity.
Inspect incoming shipments for signs of pests or damage before acceptance.
Schedule regular pest control treatments by licensed professionals using safe and effective methods.

Warehousing Logistics with SARA.

Effectively managing warehousing logistics is crucial for businesses aiming to optimise supply chain efficiency and enhance customer satisfaction while controlling costs.

With the help of our experts at SARA, you can have a streamlined supply chain and have your warehousing logistics taken care of with our secured warehousing solutions or reliable logistics services.