Warehousing in supply chain management successfully bridges the gap between the point of production and point of consumption. It aims to effectively manage the dynamic and complex supply and demand network. With this service, companies can improve their business processes by pooling vendors, human resources, knowledge, technology, transportation and retail systems; Thus, making the process of purchasing, storing, transporting and distributing products conveniently. While warehousing in supply chain management includes all these services, logistics management is concerned with moving the resources until their distribution.
In fact, the supply chain dates back to the days when a “barter system” was first introduced in the history of commerce. The predominance of unorganized services in those times cannot make it as popular as it is these days. Nowadays, management experts have applied their expertise about the logistics system in this sector, improving the infrastructure by applying the latest technologies to simplify the flow of services and accelerate the transportation speed with a variety of modern vehicles with many facilities including space and storage. Better transportation, better technologies, and better management services these days have influenced the course of the system. It cannot be denied that systematic, integrated and strategically coordinated management made this possible.
Despite its wide popularity, the supply chain is often confused with the term management when added to it. Without management, it refers to how producers, wholesalers, distributors, retailers and consumers are connected in one way or another through product flows. On the other hand, its administrative services link it with transporting or shipping supplies to order points, storing, distributing and keeping them properly so that they are not damaged or decomposed. Sometimes, products are moved from one point to another by crossing one or two points in the supply chain. But this rarely happens as this leads to disturbances in the chain system.
The aim of the introduction of supply chain management: It is constantly striving to reduce costs and responsibilities. Consider the business image as the producers transfer their products directly to the end-users. Now, imagine the advantages these producers might gain and the disadvantages they might have to face. They may acquire an enhanced, direct relationship with the end-users at the cost of additional expenses. But businesses aren’t built on the mantra of building a relationship at the expense of any additional expenses. Lower expenses for a business can ensure the higher profits it can make. This management service helped business links reduce expenses by ensuring smooth and speedy purchasing, transportation, storage and distribution of products.
Cost Reduction Process: Industry experts analyze current production and distribution methods to formulate cost-effective methods. They try to devise technologies that help them buy products at the lowest prices. These executives share expertise and logistical information with workers in the field to ensure that all colleagues understand the benefits. Transporting products directly to consumers involves many risks including damage and product decomposition along with high costs. However, while transporting these products through a managed logistics service through various points of networks; The safety of products can be guaranteed against damage and degradation, and the cost is reduced. This is used for long-distance trucks with refrigeration system, enclosed flat vehicles and various kinds of freight services. With them, the transportation of products or consumables becomes smooth, safe and fast.
In a nutshell, supply chain management includes purchasing, transportation, warehousing and distribution services. By purchasing, it means purchasing products from their point of origin; By transportation, it means taking them to desired locations; By warehousing, means storing products in warehouse or warehousing; By distribution, it means the delivery of products, raw or ready for sale, to the order points.