WAREHOUSING WHY A NEED FOR THE WAREHOUSE? Improved Product availability –Reduced stockouts –Packaging can be broken into tailored assortments Improved.

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WAREHOUSING WHY A NEED FOR THE WAREHOUSE? Improved Product availability –Reduced stockouts –Packaging can be broken into tailored assortments Improved Return on Investment –Special buying opportunities –Efficient distribution, consolidation of orders of multiple stores Strategic Advantage –Usage of efficient SCM and Info management.

Model 1 Distribution center based Vendor 1 Vendor 2 Vendor 3 Distribution center /WH Stores

Model 1 Vendor Supply model/Direct Store Delivery Vendor 1 Vendor 2 Vendor 3 Stores

Functions performed by a DC Inbound transportation Receiving and Checking Storing and Crossdocking –Crossdocking : Vendor prepared stock for delivery to spc store. DC holds it as transit Floor ready –Ticketing Marking Outbound transportation Reverse logistics

Outsourced… Transportation Warehousing Freight Forwarders Integrated III party logistics provider

Direct store delivery suited for Perishables Fashion/Fad garments Limited number of stores

WAREHOUSING METHODOLOGY FOLLOWED IN A WAREHOUSE SKILL SETS REQUIRED PROBLEM AREAS TRAINING PRODUCT QUALITY AGING PROCESS

WAREHOUSING ROUTING LOADING & UNLOADING VEHICLE MANAGEMENT FLOW THROUGH COST CENTRE PILFERAGE SECURITY MEASURES

Inventory mismanagement Bull whip effect –Lack of coordination between retailers sales chain and vendor’s supply chain leads to build up of inventory in the system. Causes –Delayed ordering and receipt of stock –Overordering –Consolidated orders to reduce processing cost

Informed Inventory Using technology-EDI is not the only answer Vendor managed inventory Collaborative planning,forecasting,replenishment

Information Flows Buyer Vendor (P&G)Store Customer DC

Inventory and Information Based on data flow Inventory can be pulled from the system ->Demand based Or Inventory can be pushed into the distribution system-> Forecast based.

Discussion How do you think a product like colgate toothpaste would move from the factory to the consumer’s basket? Enlist the parties involved in the entire supply/Distribution chain. Where would EDI make a difference?