Outsourcing Warehouse Management Saves Companies Time and Money
Source: Editorial Staff
Rapid expansion of international trade has raised global logistics costs to USD 1 trillion.
Of this, transportation costs account for USD 390 billion (39%), warehousing 27%, inventory 24%, procurement 6%, and management 4%. Hence an efficient Warehouse Management System (WMS) is a key factor in managing production costs and profit – not only for wholesalers, retailers, and transportation businesses, but also for industrial plants.
Outsourced warehousing management is expected to grow as more and more private enterprises recognize potential benefits in terms of cost savings, speed, accuracy and operational efficiency by applying modern technology.
Warehouse Management and Inventory costs comprises (1) warehouse costs arising from internal services, such as storage activities, selection of plant/warehouse location and (2) inventory carrying costs, which includes interest payment and insurance premiums.
Warehouse costs represent the largest portion of logistics costs – and they are also key in maximizing customers’ satisfaction. Optimal warehousing management requires not only efficient work procedures but also modern technology and equipment, as well as professional staff, emphasized Assistant Prof. Ruth Banomyong, International Business Logistics & Transportation Division, Thammasat University.
Blue & White feel rosy over Trans Logistics
Responding to the rising demand for outsourced warehouse management and product distribution services, Blue & White Logistics Group’s subsidiary company, Trans Logistics Co., Ltd., is investing 100 million baht to expand its West Truck Terminal warehouse. Phase 1 of the project will start in April and will be followed by phases 2 and 3 to meet growing demand.
Products currently handled by TLC’s 30,000-sq m warehouses at West Truck and East Truck Terminals include agricultural chemicals, garments, innerwear, audio equipment, electrical appliances, food, diapers, sanitary napkins, and other consumer goods. Warehouse Access Points are monitored by a wireless barcode scanner system that enables the company to organize returned goods packaging and distribution, separate products into various categories, and fix barcodes.
As well as upgrading the WMS system to control incoming/outgoing cargo and storage, RF scanners and barcode systems have been installed to count inventory, monitor pallet ID and location activities, improve operational efficiency and ensure 99% accuracy.
Several TLC customers currently lease and operate warehouses to store imported products. Upon receiving orders from their own customers, they hire trucks or use their own vehicles to transport goods to final destinations. As Blue & White Logistics already operates nationwide distribution centers, a large truck fleet and transportation network, it can offer value-added activities such as warehousing and immediate distribution to final destinations, thereby saving logistics costs.
Shaving 10% off costs
“Trans Logistics Customers can cut costs by over 10% compared to in-house services. As cargo can be immediately transferred at TLC Terminals without requiring temporary storage, TLC customers can save both transportation and warehouse costs as well as inventory holding costs,” said Managing Director Sunyawit Sethapokin.
As a Full Service provider, TLC takes charge of in-coming goods from the moment that shipment arrives at a local port, and follows up with inspection and storage services. After receiving purchase orders from retailers, Blue & White Logistics customers forward such purchase orders to TLC which then starts packaging and distribution to final destinations. Over 100 trucks are dispatched each day, so goods that are stored near the distribution center can be readily delivered, Blue & White customers can minimize costs, delays and improve management efficiency. Blue & White Logistics Group’s competitive edge lies in its One Stop Service capability and the largest distribution network that covers Surat Thani, Nakorn Srithammarat, Haadyai, Phuket, and, in the near future, Trang and Pattani
JWD warehousing 99% accurate
Located 1.2 km from Laem Chabang Port, JWD InfoLogistics’ diverse and comprehensive product services include a Free Zone and general warehousing and hazardous goods storage. Fully equipped with an IT system and cargo handling equipment, Laem Chabang’s largest and most modern warehouse can be expanded, said Wichu Sangkorntanakij, Business Development Manager, JWD InfoLogistics.
After 13 years of using JWD InfoLogistics’ comprehensive logistics management, Zurich Trading can guarantees the highest degree of efficiency, customer satisfaction and effective cost management.
Having been continuously upgraded to match diverse customer needs, the existing WMS system can verify the status of incoming and outgoing products as well as accurate and complete storage and delivery information, thereby pre-empting losses and ensuring 99% accuracy and speed in product management.
“An extensive network of general warehouses, Free Zones, special facilities for hazardous materials and retail warehouses in the same area and equipped with modern WMS system and handling machines, enables JWD InfoLogistics to offer customized services to match specific requirements. In a borderless world, fierce competition based on service quality will benefit customers. Focused on speed, accuracy and HR development, JWD InfoLogistics’ revenues now exceed 200million baht,” Wichu said.
RFID shows higher growth trends
Projecting 20-30% growth, Dr. Naiyavud Wongkomet, Managing Director, IE Technology Co., Ltd., noted that investment in RFID technology is cost-effective when applied to more than two warehouses or factories. As tags need to be attached and removed from individual products that enter or leave the warehouse, it may be more useful to attach RFID to palettes for repeat usage. Current RFID applications include food and industries which require safety and traceability features for production planning and QC purposes, as well as transportation and warehouse management businesses. Warehouses that already have efficient warehousing management systems may not require RFID – but this technology can be a useful tool for improving efficiency, Naiyavud added.
New barcode system for Nippon
Nippon Paint (Thailand) Co., Ltd. has developed a WMS and Barcode system to manage seven finished goods warehouses in Samutprakarn and Chonburi.
By using the Barcode system to manage huge quantities and a wide range of paints that enter/leave the warehouses each day, and using Intermec Mobile Computer model 730 and 730 i-Safe to enter Rack data automatically in to the SAP Warehouse Management system, Nippon Paint sped up product storage/distribution, in-house inventory and Rack inspection by 70%. It also managed to cut out all errors caused by manual data recording.
This system enables access to updated online data, immediate issuance of customers’ invoice, and FIFO (First In First Out) inventory management that takes into account chemical life cycle and expiry dates.
“We now know the exact location for each product category, detailed product information, outstanding stock, and available warehouse space. The barcode system helps to improve work efficiency, management and quality control. More importantly, it enables the company to shift from Office Operating system to On-Site keying of data into the SAP system Operation,” said Surin Premchuen, Nippon Paint IT manager.
Next, the company will expand its IT system to include raw materials and work-in-progress. RFID devices will be installed to monitor work-in-progress, production processes, work areas and machines that are being utilized, as well as ingredients mixing, confirmation of goods received and QC results, and the calculation of costs.