Warehouses should aim to provide value-adding services as well as minimizing operating costs. Taking this into...
Warehouses should aim to provide value-adding services as well as minimizing operating costs. Taking this into consideration, your company has decided to build a new warehouse to cater to your customers in Johannesburg. The logistics manager has requested you to provide them with recommendations on the strategic issues that they need to consider when designing the warehouse.
Homework Answers
The major strategic issues related to the designing of warehouse are
- Availability of space :- Johannesburg is a costly area abd availability of space would be a constraint based on the price.
- Customer service level agreement:- This determines the delivery or turn around time for the fulfillment of customers. Especially during the peak period or seasonality it has to be maintained properly.
- Availability of skilled labors :- Labor pooling is difficult when the requirement is high.
- Distance metrics :- Based on the distance to be served according to centre of gravity of location and orders.
- Inventory management:- Throughput analysis could be difficult and classification of inventory requires estimate future demand more accurately especially from the top Customers.
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