Report on Strategic Warehouse Management

Introduction

The development of a strategic plan of managing and designing is a vital process that plays a very important role in the supply chain of goods of a certain company. This aspect is viable since it enables the distribution, sorting, storage, and all processes that ensure the logistics of goods is a continuum process. As a warehouse is indebted with logistics overhead, a well-designed warehouse should cut costs and improve the quality of services entailed in goods transport. Thus, a good warehouse should be implemented with the need of meeting a huge demand for goods in the growing market by ensuring the circulation of quality goods at cheaper costs and suitable conditions (Emmet, 2005). Though opening up a warehouse that is involved in several businesses proves to be a complex business; The current report is indebted with the role of delineating a report on the most effective measures that will be put into consideration in setting up a multi-business warehouse in Melbourne, Australia.

Requirements of the warehouse design and the organization structure.

The main purpose of warehouse design is to ensure the ease of movement of goods, ambient storage of goods, and the security of goods (Hompel and Schmidt, 2008).

Firstly, a warehouse should ensure goods are stored easily and in a well-ventilated place that will ensure even the perishable goods can sustain the conditions until the anticipated time. To effectuate all these presuppositions, the structure of which the warehouse is built should be inconsiderate to allow for dry and coo conditions of goods. For instance, the use of wood is irrelevant due to its water-absorbing capacity and also durability issue. For a good warehouse design, concrete floors are efficient and not prone to dampness. Sequentially, the cooling system is mandatory to lower the temperature of the room.

Secondly, a warehouse design should cater for ease of packing and movement of goods. This aspect will be available by setting the warehouse with a good infrastructure system that will ensure trucks access the warehouse easily and faster. For the warehouse to deliver its operational anticipations, it should be situated near a tarmacked road or located within an accessible all-weather road. Being near such carriages will reduce the seasonal problems of bad roads which reduce trucks accessing warehouses for delivery and distribution of goods. Sequentially, during designing, the warehouse should accommodate a wide space for goods movement and haulage equipment. The wide space is meant for forklifts that usually lift and lower huge cartons packed at the highest shelves. The floor surface of the warehouse should also consider the loading sessions where trucks will be packing while being loaded. The loading bays should also be situated near entrances and goods storage positions to reduce the time and burdens of lifting goods from far positions. Besides the primary design features of a warehouse, other features like good shelve development, several pallets, good lighting and air conditioning system, and proper waste disposal should be considered

Thirdly, the warehouse should be designed with and equipped with a good security system. Security of goods entails two aspects, i.e. human interference and accidental interference (accidental fires). While curbing the human security issues of theft and robbery, all workers should be frisked while leaving the warehouse, certain rooms should be given access control to reduce personnel accessing top priority places which have sensitive goods. Also, for robbery prevention Blamah, Adewumi, and Olusanya (2013) delineate the use of motion detectors and CCTVs monitoring systems, high perimeter electrified fences, and alarm systems all for the safety of goods stored. In the control of accidental calamities like fire, smoke detectors, fire alarms, and automatic water sprinklers should be installed to reduce the extent of goods losses and even prior preparation procedures before the ordeals worsen.

In the administration sector, the leadership structured ought to be defined to initiate order and develop a responsibility system where every individual knows their role and hence eliminating the susceptibility of blames and undone jobs (Krauth et al, 2005). A logistics manager will be in charge of the whole warehouse, then assisted by the supervisors of various departments that will be overseeing certain sections, e.g. transport supervisor, workforce supervisor, materials supervisor, distribution supervisor’s e.t.c.Lastly, the supervisors will have assistants who will be aiding them in case of absentia and reducing work overloads.

 Present considerations for workforce management

Considering the workforce in the viability of a warehouse plan is very crucial since it’s them who ensure the receiving, sorting, and dispatch of goods, for the anticipated warehouse development in Melbourne, shelter for employees and well-being should be given priority. The basic needs of the workforce are the determining factor that will allow normal operations of reporting to work is not postponed on even a single day since this will affect the warehouse daily affairs. Secondly, the employees too are to work in the warehouse should have prior knowledge of what they are indebted to do. Therefore, to ensure all of them are exposed to what they are supposed to do, they will be subjected to a three-week workshop to gain essential skills of working in the warehouse. Moreover, they will be educated on good workmanship skills which will allow corporations as a society rather than only salaried workers.

Upon special skills like computer literacy, machine operations, and management skills, before employment, interviews will be organized to discern the most competent personals and in the case of less efficient skilled personnel, training will be organized to familiarize them with the work skills for ease of operation of the warehouse. On the management factor, supervisors will be responsible for departmental roles to ensure every sector delivers what they are tasked with. Also, employees should be motivated for hard work which is reflected in the company’s profit.

Key regulations in warehouse management

As per Foreign Investment Review Board (FIRB), the Australian government has set up various regulations that guide and control the operations that are being undertaken by foreign corporations. Firstly, as per the FIRB, the Australian government practices an open border policy (Australian customs, 2005) that allows many investors into the country. During the award and tendering of the investor’s proposals applications have to be made before the development phase of the enterprise. For the strategic warehouse management Inc, the committee shall be required to present an application to the foreign review headquarters which is under the Corporations act of 2001 in the FIRB. As per the FIRB foreign warehouse facilities, Warehouse management Inc shall be required to provide safe and clean working conditions for employees (Australian Customs service, 2005). This implies the safety of all goods and personnel at the warehouse and the surrounding.

According to Australian Industry Standards ( (AIS, 2020) ), also the strategic warehouse management will be indebted to abide by the labor market customary laws that delineate employee and employer relationships. Since a warehouse is a major hazard facility, Warehouse management Inc will be required to set a safety management system for the entire workplace to mitigate the susceptibility of unwanted disasters like fire. The safety management system entails a proper delineation of control measures in case of disasters.

Export procedure and Import Procedures

By the Australia-United States (Thornton, 2008), foreign companies importing their goods are not subjected to mandatory import licenses which allow them to operate without such permits. However, to maintain a lawful market environment importers must abide by the following regulations. Firstly, they have to obtain clearance for every good worthy $250 shipped via air or water. Additionally, those using postal services, are charged $1000.Marketers operating under the described limits are required to obtain a clearance form from the Australian Informal Clearance Documents (AICD) offices. Also, with the signing of the Australi-Us’s free trade agreement (AUSFTA) in 2005( ), goods can be transported freely within the two countries thus favoring Warehouse Strategic warehouse management Inc.

For Export procedures from the Australian warehouse, they are still guides per the AUSFTA which dictates the following procedures. Exports services are under the Department of Immigration and Border Protection which implies that all corporations or personnel planning to export goods notify the customs office for a prior arrangement of logistics services. Afterward, a warehouse permit is given to the company which describes the destined depot in the United States and the contact details of the receiver. Sequentially, through the RFID technology(Zhu et al,2012)goods can be tracked in case of losses.

Supply Chain risks and remedies

There are several risks to a supply company which is irrespective of the warehouse situation, personnel, or even size of the enterprise. However, successful enterprises, have all undergone the risks and sought the most probable solutions in mitigating the risks and developing a safe business environment. Some of the risks that Warehouse management inc can succumb to include Supply chain risks, demand risks, internal and external risks( Hariharan et al,2018).

External risks entail the surrounding risks where the warehouse will be established. These risks are attributed to the government policies of the country of business, revenues and tax systems and regulations, economic fluctuations and inflations, macro-economic strategies, and tariffs developed by the parent nation as described by Emmet (2005).

Internal risk involves the broad company arrangement and procedures that facilitate a swift movement of goods and services. The risks involve workforce quality, the marketing plan of the warehouse in reaching out to many customers, meeting technological requirements in the amid era, and meeting the warehouse targets and ambitions.

Supply risks include all the developed solutions of ensuring goods are delivered to the anticipated customers and the incoming ones. They are broadly categorized into logistics issues of goods delivery, pricing of raw materials for the company, maintaining a swift flow of goods, maintaining quality at large, encountering counterfeit goods, etc.

Demand risks to be encountered include distribution of goods to the desired customers, meeting consumers interests and expectations, maintaining a position in the competitive market, proper planning for demand meets, maintaining a quality product in the market, developing new products, and lastly the brand maintenance(Minis et al,2010).

In the urge of eliminating or mitigating the risks above, Strategic warehouse management Inc can incorporate the following strategies. According to the Supply Chain Risk Management (SCRM), the risk can be managed through two means, “proactive and reactive17, 18. The proactive as preventive that is before the risk occurs take appropriate action, Whereas reactive is defined as the action taken after the event occurred that is after the risky events take a step to recovery from the uncertain situation1”(Wieland and Wallenburg,2012, p. 28).proactive measures will be viable in setting demand and supply risks through maintaining a safe working environment, defining the company’s ability and the targets to be achieved(Hariharan et al,2018). Supply and mitigation through proactive measures can take employ proper planning by analyzing market ‘climate’ to determine the most prevalent goods and prices for the market. In mitigating external and internal risks, reactive measures can be implemented. This is through setting incentive measures for luring customers. Market shifts can also be studied subsequently to determine exchange rates fluctuations and rises.

Operations to be outsourced and operations to be managed directly by Strategic Warehouse management Inc

Outsource operations

Security will be outsourced to obtain the most effective and efficient security corporation that will ensure the safety of goods within the warehouse. Direct management by the company will not be reliable due to guarantee issues that are well catered when a third party is employed to undertake the role solely (Emmet, 2005). Contracting also eliminates the susceptibility of ‘loose ends since terms will be laid down during contracting.

The logistics department will also be outsourced to a third party. The delivery of goods is also a function of consumer prevalence since transport and safety of goods encourage customers to liaise with a certain company. Thus, the employment of a transport and delivery third party will eliminate risks of transport and goods since the contractor will be liable for the operations just after the dispatched period.

Direct management operations

Marketing strategy and plans will be undertaken by Strategic warehouse management Inc themselves. This is viable since they are the ones who know their customers ‘ interests and the desired brand to be set for Warehouse development. Sequentially, the company can trade marketing strategies as intangible assets for a competitive market(Wieland and Wallenburg,2012)

The movement of goods will be the sole company exercise. The management of exports and imports is the primary raw material for warehouse operations and hence proper management by minimizing costs and increasing the flow and quality of goods being received is a core ‘asset’ to SWM Inc. The employment of a third party will be irrelevant since they are another business entity seeking profits which will render SWM operations fewer efficient in growing.

Budget lines to be considered

The key budget line to be considered is the Inventory management of costs. This is because “inventory management is vital to any e-commerce business. If you don’t establish an effective inventory management approach, you risk frustrating customers, losing vital sales or investing in inventory that doesn’t sell.”( (management, 2019) the inventory management costs will be effectuated with the development of a control system that mandates costs within the warehouse. The costs to be managed include:1)ordering costs-purchasing, purchasing orders and invoices, labor, and transportation and processing costs.2)carrying costs-taxes imposed on goods, insurance costs, storage issues, and warehouse space capability.3)Stock out costs-entail all costs brought about due to run out of stock for a certain product(Management,2019). With the consideration of the above management costs, the warehouse will ensure proper goods relaying mechanisms like RFID technology, automated forklifts, and carrier vehicles to curb transport costs. Also, the warehouse will be designed per the required goods of business in the urge of determining the most effective space layout to curb storage costs. Lastly, to cushion the whole cost issue, the inventory management control system will be developed to reduce all costs involved in the delivery and supply of goods to and from the warehouse.

Metrics of measuring Success

Sales indicators-This will provide the date on the volume and frequency of the goods sold per unit time which will then illustrate if there is progress or not. This will be broken down to describe if it’s new customers, current customers, or return customers to the warehouse market.

Customer satisfaction – this will provide an ambient means of the warehouse understanding their progress in customer retention through getting a clear overview of their warehouse brand among their customers. This will also present open forums for meeting customers’ interests.

Net income ratio-this implies calculating the profit the warehouse gains from its all operations either on a daily or weekly basis which are entailed in discerning the susceptibility of business booming or failing ((TimTyler, 2019).

Conclusively, proper analysis has to be undertaken during the setting up of any business enterprise. The viability of success is largely dependent on the planning team as a proper plan of describing the anticipated risks and opportunities provides a platform for setting cushion measures in future operations (Lauffer and Brassell-Cicchini, 2013). For the case of SWM Inc warehouse development, design, operations, and personnel contribute to the success of the supply chain operations. The design of the warehouse should cater for the safety of goods to be stored in a long period as possible. This entails large storage space, the safety of goods, and workman force. Sequentially, efficient inventory management of costs will be viable in the mitigation of carrying costs, space cost, and stock run-out costs that are usually entailed in any supply chain business entity

References

AIS. (2020, September 25). Australian Industry Standards. Retrieved from Transport and Industry: https://www.australianindustrystandards.org.au/industries/transport-and-logistics/

Australian Customs Service, (2005). Australia – United States Free Trade Agreement: Claiming a Preferential Rate of Customs Duty. Retrieved from: https://www.border.gov.au/Customsnotices/Documents/acn0554.pdf

Australian National Audit Office, Cass, B., Lockyer, V., & White, P. F. (2003). Fraud Control Arrangements in the Australian Customs Service. Australian National Audit Office.

Emmett, S. (2005). Excellence in warehouse management: how to minimise costs and maximise value. John Wiley & Sons.

Hariharan, G., Suresh, P., & Nagarajan, S. (2018). Supply chain risk mitigation strategies and its performance of SMEs. International Journal of Pure and Applied Mathematics, 119(15), 3545-3553.

Laufer, C., & Brassell-Cicchini, L. (2013). Worst-case planning: ten steps to effective crisis response: with the rise of social media, a crisis can cause irreparable damage to a company’s reputation. Without proper planning–for a natural disaster, workplace shooting or recall–the fallout may be inevitable. Risk Management, 60(4), 38-43.

Management, I. (2019, January 2). Types of Inventory Management Costs [+9 Myths & Mistakes To Avoid]. Retrieved from Inventory management : https://www.skubana.com/blog/inventory-management-costs-and-myths

Minis, I., Zeimpekis, V., Dounias, G., & Ampazis, N. (Eds.). (2010). Supply Chain Optimization, Design, and Management: Advances and Intelligent Methods: Advances and Intelligent Methods. IGI Global.

TimTyler. (2019, January 19). 7 Metrics to Help You Measure Success and ROI in a Fleet Business. Retrieved from Verizon Connect: https://www.verizonconnect.com/resources/article/how-to-measure-business-success/

Thornton, G. (2008). An innovative, flexible and workable business continuity plan: Case study of the Australian Customs Service Cargo BCP. Journal of Business Continuity & Emergency Planning, 3(1), 47-54.

Wieland, A., & Wallenburg, C. M. (2012). Dealing with supply chain risks: Linking risk management practices and strategies to performance. International journal of physical distribution & logistics management.

Zhu, X., Mukhopadhyay, S. K., & Kurata, H. (2012). A review of RFID technology and its managerial applications in different industries. Journal of Engineering and Technology Management, 29(1), 152-167