Strategic Warehousing?

Since warehouses house inventory (or wares), warehousing adds business and supply chain value in all the same ways including facilitating production economies of scale, optimizing factory utilization via seasonal inventory builds, and mitigating supply chain and business risk by holding contingency and disaster inventory.




Despite all efforts to reduce setup and changeover cost and time, there will always remain expensive and time consuming setups. In those situations it would be economically foolish to produce short runs. When long production runs are economical, the resulting lot size inventory must be housed; most effectively in a warehouse. For example, one of our large food and beverage clients was running lot sizes 50% below optimal, incurring excessive changeover and production costs as a result. Once corrected, an additional 150,000 square feet of warehousing space was required yielding a significant return on investment in warehousing.


Coca-Cola’s distribution center near Raleigh, North Carolina with expanded warehousing square footage to accommodate larger lot sizes and an optimal activity density. (Coca-Cola, Raleigh, USA)

Many corporations have significant peaks and valleys in their demand. One of our clients, Hallmark Cards, is an extreme example. The large majority of the demand for greeting cards falls in the Christmas and Valentines seasons. If their production capacity was designed for those peaks, their production capacity would be cost prohibitively under-utilized for 75% of the year. To balance the production and optimize their supply chain costs, Hallmark produces greeting cards at a fairly balanced pace during the year resulting in a large storage requirement for a majority of the year. That “seasonal inventory” is stored in a large seasonal warehouse pictured below.


Hallmark Cards Warehousing Complex, Liberty, Missouri, USA. Sized to accommodate inventory build ups in support of extreme seasonal peaks.

The Schwan’s food company is another one of our clients. One of their flagship products is frozen pie. They are the world’s largest manufacturer of frozen pie; the majority of which are consumed between Thanksgiving and Christmas. As was the case with Hallmark, to optimize their supply chain costs they must balance production throughout the year and utilize third-party frozen warehousing to hold seasonal build inventory January through September.

INVENTORY SOLUTIONS

Inventory Optimization

SKU Portfolio Optimization

Forecast Optimization

Lot Size Optimization

Turn & Fill Optimization

Deployment Optimization

 

 

INVENTORY

PRODUCTS

RightChain Inventory

RightChain SKUs

RightChain Forecasting

RightChain Lots

RightChain Turns

RightChain Deployment

TRANSPORTATION SOLUTIONS

 

Transportation Optimization

Lane & Flow Path Optimization

Network Optimization

Mode Optimization

Load Optimization

Fleet Optimization

TRANSPORTATION PRODUCTS

RightChain Transportation

RightChain Nodes

RightChain Shipping

RightChain Fleets

WAREHOUSING SOLUTIONS

Warehouse Optimization

Storage Optimization

Picking Optimization

Slotting Optimization

Layout Optimization

Workforce Optimization

WAREHOUSING PRODUCTS

RightChain Warehousing

RightChain Slotting

RightChain Flows

RightChain Workforce

STRATEGY

SOLUTIONS

Strategy Optimization

Service Optimization

Sourcing Optimization

Planning Optimization

Finance Optimization

Risk Optimization

 

STRATEGY

PRODUCTS

RightChain Strategy 

RightChain Sales & Service

RightChain Sourcing

RightChain Planning

RightChain Finance

RightChain Risk

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