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Where, you are bringing different elements of the business together, to be able to effectively address various supply chain issues. The most notable include: the business model, inventory reduction strategies / risk reduction strategies, inventory levels and effective warehousing. The business model is: where they are examining how the current model, could help to contribute to various supply chain related issues. The inventory reduction / risk reduction strategies are: when the business is seeking out ways to reduce the inventory levels and possible risks as much as possible. Inventory levels are when you are monitoring the effectiveness of using this strategy. Effective warehousing is when the company is utilizing its different warehouse space, to effectively control the inventory levels. These different elements are important, because they illustrate how the warehouse would play a vital role in the postponement process. Where, it is playing role in helping a company to: store, maintain and control inventory levels. As a result, the warehouse is the final point, that the total effects of a company's inventory management strategy will be seen. The below example illustrates how this system would work. (Baker 2008)
Combining Different Postponement Strategies
Inventory Reduction Strategies / Risk Reduction Strategies
A Comparison of Postponement Strategies
When you compare the various systems side by side, it is clear that there are a number of different ways that this can help the warehouse adapt to the changes that are occurring. Under the form postponement system, there is one central distribution center that will distribute the different products to the various locations. The two level inventory system; is when you are using two different warehouses, to serve as a stop gap measure, to make certain that the different retail stores have the products they need. Combining the different strategies is when you are looking at the business model that is being used and the underlying inventory levels. Where, the main objective is to examine how both factors, could have an effect on inventory levels. These different strategies are significant; because they show how a shift has occurred in way warehouses are being used. Where, it is playing an increasingly important role in the management of the supply chain and inventory levels. For any organization, effectively being able to deliver the products that consumers need, at the prices they are demanding, will play a major role in determining how successful a business will be in the future. As a result, a variety of warehouse postponement strategies must be utilized, as a way to address the different changes that a business is facing, because of globalization. Where, the most profitable corporations have begun to embrace innovative warehouse postponement strategies, as a way to help improve their overall bottom line. Over the course of time, those businesses that can be able to effectively adapt their postponement strategies, to changes that are taking place in the economy, will see a dramatic improvement in the underlying levels of profitability. Where, the focus on this aspect of the business will help to give the company flexibility at all times. In many ways, one could effectively argue that the ability to control the supply chain and to adapt to changes the industry / economy are essential for continued economic growth. Therefore, it is in the best interests of the business, to utilize warehouse procurement strategies that will help it adjust, to the changes that are taking place.
Clearly, postponement is having a dramatic impact upon the role of the warehouse in an organization. This is because globalization is changing the nature of business, where changes in demand can occur quickly. Over the years, various businesses have tried carrying large supplies of various raw material and parts. However, the use of this system has led to losses and is simply not economically viable. Instead, organizations have been resorting to postponement, as a way to reduce the amount of working capital that is invested in inventory and to help reduce the underlying amounts of risk. As a result, three different postponement strategies were developed to address these issues to include: form postponement, the two level warehouse inventory system and the combination of different inventory systems. For the warehouse, each system is significant, because it plays a vital role as the distribution center and as a tool to help control costs. This is because it is the focal point of an organization's supply chain. Where, the warehouse is the place that will effectively control inventory levels and distribute products, to different locations quickly. Since consumers are demanding a variety of products quicker requires: that some kind of system is developed to address these issues. This is how the warehouse will play a vital role in postponement. As it will serve as a stop gap, that is capable of effectively monitoring and reporting to executives, key changes in supply / demand. Over the course of time, this helps an entity be able to effective adapt to changes in the economy, because they can maintain appropriate inventory levels at the warehouse. This is one of the keys in helping an entity be able to survive the changing tastes from consumers and various economic conditions. Therefore, those organizations that can effectively utilize different postponement strategies will be able to adapt, to changing economic conditions and demand.
Baker, P, 2008, Design for Postponement and Operation of Distribution Centers,
The Role, Design and Operation of Distribution Centers, PHD Thesis, Canfield University
Bates, A, 1977, 'Warehouse Retailing', California Management Review, vol. 20-page 74.
Chiou, J, 2002, 'The Adoption of Form Postponement Strategy in a Global Logistics System', Journal of Business Logistics, vol. 23, no. 1, pp. 107 -- 125.
Huq, F, 2006, 'Simulation Study', International Journal of…[continue]
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