Ware Housing And Distribution
A warehouse can simply be defined as a planned space usually a large commercial building for handling and storage of goods. Therefore warehousing refers to all the processes involved in the storage and handling of goods in such a planned space. The goods commonly found in warehouses include; machinery spare parts, building materials, finished agricultural goods, furniture and electronics. Some of the activities that take place in a warehouse include receiving goods, offloading goods, forklifting goods and stacking the goods. The coordination of all the activities is what warehousing entails. Distribution on the other hand is the process of making the goods available for consumption by business users and final consumers. A combination of warehousing involves the acquisition of goods from manufactures, storage of the goods and availing the goods to the consumers.
Potential warehousing issues
Some of the potential issues likely to arise in warehousing can be;
Cases of both internal and external theft can occur. To curb this vice, CCTVs can be strategically set up along with other security measures such as armed guards and inspection of all those leaving the warehouse premise. Barcode or RFID tracking can be a smaller step that will help curb loss.
The manner in which goods are handled especially those that are fragile can cause damages. Employee training and coming up with better handling procedures can help reduce these damages. FIFO allocation can ensure each case is in the warehouse for the shortest time possible, and least prone to damage.
Accidents can also occur in the warehouse, both minor and fatal. The facility has to meet the safety standards and the staff motivated to prevent accidents in the warehouse. Making sure heavy items are low and easy for picking can minimize the most frequent injuries due to product movement.
Receiving low quantities of goods than the order can cause stock outage which affects sales negatively. On the other hand, too much stock increases storage costs. Systems should be in place to ensure accurate quantities are received at the warehouse and alert management when running low.
Distribution business model
A business model is the plan that is formally made to ensure a business is steered towards profitability. In the distribution business, it is also important to come up with a business plan that will clearly list out the range of costs and the expected revenues. This will create a sense of direction for the business. There are four major steps that can be followed in coming up with a distribution business model;
The first involves establishing the market needs which will determine the types of distribution services to offer. Also to be determined are the modes of distribution; such as the choice of transport for example using railway transport for bulky goods or air transport for perishable goods and specialized services such as transport of hazardous goods and wide loads using appropriate vehicles.
The second step is researching and understanding the cost structure. This should come from all the costs involved such as the equipment, licensing and staff expenses. A full understanding of the cost structure is essential in setting the right prices that will bring profits.
The third step involves setting pricing structures and establishing appropriate payment methods for the consumers. It is advisable to offer a variety of payment methods for the consumers such as cash, checks, and credit card for their convenience. Terms of payment should also be determined such as the incentives for prompt payments, grace period for early buyers and penalties for late payments.
The fourth step will involve gaining economies of scale in the market to keep up with competition and increase profitability. Economies of scale are an integral part of any distribution business mode. This will involve increasing the magnitude of your services, geographical cover and assets such as distribution vehicles. Such growth of the business creates reliability within the services and gives you power to steadily increase prices which improve the profitability of the distribution.
Distribution business model
The warehousing and distribution business environment is very demanding and the stiff competition gives no room for mistakes. It is therefore important to come up with aim for goals that will propel the business forward. Such goals can include;