Recently in our organization, the disadvantages of holding inventory have been increasingly recognized, particularly its adverse impact on supply chain and warehouse cost. Is the role of warehouses in future would be eliminated due to leaner inventories?
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A questioning of the role of inventory naturally also tends to question the role of warehouses, as inventory holding and serving customers from stock are key functions of warehouses.
Professionals are learning importance of buffer inventory and they understand that it is very difficult to eliminate the need for such inventory completely. The question is thus not whether inventory is “good” or “bad”, but how to determine the correct level. Moreover, the lead time gap tends to be varying for both ends. So, primary function of warehousing will not be eliminated from business.
In fact, roles for warehouses include shipping consolidation, final assembly / customization,
order consolidation, fully automated shipping and cross-docking is growing. These roles are further associated with relatively modern concepts such as IoT, production postponement, Just-in-Time and mass customization.