Warehousing logistics: The basics you should know

Warehousing logistics: The basics you should know

The interrelation between logistics and storage is an undeniable issue, and, indeed, it is of the utmost importance to learn it. The three fundamental pillars of this relationship are, on the one hand, the elimination and recycling of unnecessary materials (one of Kaizen’s keys,) on the other hand, the planning, design, supply, and production of materials, and maintenance and production support.

Besides these objectives, as well as the mission of managing each of these activities and transport, and manipulation of materials, there are two crucial aspects any commercial and industrial activity. The first one is storage, and the second is distribution.

One of the purposes of logistics is the development and management of the flow of materials, starting with the initial supply of raw materials, production, and storage, to the distribution of products destined for consumption. For this reason, it is said that logistics is considered as an integrated whole so that any activity involved in the flow of materials and consumables in any field (commercial or industrial) requires complex and coordinated systems of development, production, and distribution.

Logistic storage systems have the constant support of information and communication technologies. In spite of this, the development of these disciplines is so fast that they produce the obsolescence of many systems in a very short time, even without reaching their total implementation or without having fully satisfied the expectations of the users.

In the last decades of the last century, logistic operators emerged. These are external companies, independent from the producing companies, which are created with the aim of performing logistical tasks that the production companies need to develop their activities. Thanks to logistics operators, the production companies reach three goals. The first is the standardization of the cost of logistics, the second is the reduction of inventories, and the third is the adaptation of production to demand.

These operators are responsible for solving all kinds of logistical problems that would prevent the full functioning of the supply chain in any organization. This includes internal and external transport, as well as the distribution and storage of raw materials, fully finished products, or, are in an intermediate process of production.

Image courtesy of Province of British Columbia at Flickr.com

Also, one of the functions of logistics operators is the post-sale of manufactured products to production companies. In all these activities, these operators must work together with the engineering, production, distribution, marketing, and sales departments.

The role of logistics operators requires a high degree of specialization. For this reason, there are many specialties for any task developed in this field of logistics. One of them, perhaps one of the most important, is warehousing. At this point, it is important to consider that the dislocation and the subcontracting in terms of warehousing are the two of the main causes of the boom of logistic operators when it comes to this field.

Another relevant point in this topic is the assumption of logistics platforms. There is no specific legal regulation that includes all the activities developed within a logistics platform. However, it has traditionally been found that logistics platforms repeatedly perform certain functions. A logistics platform, also known as “freight transport center,” is a perfectly delimited area in which several logistics operators carry out activities related to the transportation, storage, and distribution of goods. This, both for national transit and for international trade.

Read also: How To Understand Inventory? by David Kiger

Logistic operators working within a logistics platform may be owners, renters, or simple users of available facilities. They may be warehouses, piers, storage areas, offices, parking lots, or workshops. A logistics platform is usually open to anyone. This means that they can work for different production companies (even if they compete with each other.) What is important here is that a logistics platform must be equipped with all the necessary equipment.

Logistics platforms are really fundamental elements for the development of logistics throughout the storage and distribution process. They incorporate the requirements of integral logistics, such as the concentration of services, computerization, and telecommunication techniques. In addition to that, they generate synergies, reduce operating costs, and build economies of scale.

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As such, logistics is not a new element, but the introduction of logistics in the field of storage and production is an event that occurred during the last decades of the last century. Planning and developing the supply of all kinds of elements necessary for the execution of an action is something that, paradoxically, was not thought systematically for a long time, not even during the industrial revolution.

The concept of storage has been changing and expanding its scope of competence. Warehousing is, nowadays, a service and support unit in the organic and functional structure of a company, commercial or industrial, with well-defined purposes of custody, control, and supply of materials and products. At present, what was once characterized as a space within the company destined to the exclusive use of merchandise, now is a key structure that provides physical and functional elements capable of generating added value.

I hope it has been useful. See you next time!

* Featured Image courtesy of Pixabay at Pexels.com

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