University of Cebu – Banilad Campus

Banilad, Cebu City, Philippines 6000

2nd Semester – A.Y. 2013-2014

Major Essay

In Partial Fulfillment of the Requirements of the Course

Distribution Management

Submitted by:

Canama, Janvic Jan

Nudalo, Felipe

Quiñones, Marlyn

MM3 5:00-6:30 TTH

Submitted to:

Mrs. Elouis Tejada

March 2014

Theory vs. Interview

The italicized paragraphs are theoretical statements taken from the

book Logistics Management. They are placed after the interviewee’s

answers that match with the theories.

Question 1: What is the importance of warehousing?

First, having a warehouse, you will have the opportunity of

consolidating the products. So to provide service to our customers, we need

a variety of items. Before we deliver them to the customers, we have to

consolidate those products. Without the warehouse, we can’t do that. If you

can consolidate the items in the warehouse, it will be cheaper than sending

each item to your customer.

Second is the buffer lead time. With the warehouse, you can reduce

the lead time in delivering your service to customer because you have the

materials available already. Unlike if you will order your items every time you

receive order from your customer, it will take time.

The third one is the transportation mode trade off. Meaning to say, if

you have a warehouse, you can take advantage of the economies of scale in

transportation. You can optimize the use of transportation. You can send

your materials in bulk orders and whatever quantity you desire.

The fourth one is you will have the opportunity to save due to bulk

orders. When you buy a particular item from a supplier, more often than not

you can avail of discounts.

Last one; it gives you protection from unforecasted price upsurge.

There are times in a year; suppliers decide to increase the price of their

commodity. So when you have the warehouse, most likely you will not be

affected for that year.

Warehousing has traditionally provided storage of products (referred to

as inventory) during all phases of the logistics process. Two types of

inventory can be placed into storage: [1] Raw materials, components and

parts (physical supply); and [2] Finished goods (physical distribution).

Warehousing of products has occurred for one or more of the following

reasons – to:

Achieve transportation and production economies

Take advantage of quantity purchase discounts and forward buys

Maintain a source of supply

Support the firm’s customer service

Aside from that, warehouses can be used to support manufacturing, to

mix products from multiple facilities for shipment to a single customer, to

break-bulk or subdivide a large shipment of product into many smaller

shipments to satisfy the needs of many customers, and to combine or

consolidate a number of small shipments into a single higher-volume

shipment.

Question 2: What are the requirements needed in choosing a

warehouse?

You have to know what goods you are going to store in the

warehouse. Like for instance, you need a warehouse which controls

temperature. First and foremost, you have to know what you need to store.

Then space requirement and capacity, accessibility, safety, security and

location.

In general, firms have a number of warehousing alternatives. Some

companies may market products directly to retail customers thereby

eliminating warehousing in the field. The selection, design and management

of warehouse operation depend on the purpose and operation of a company

or business. Below are important things must be taken into account to

choose and decide what type of warehouse to be used:

Type of goods to be stored as well as the characteristics of the goods.

The main thing to consider is whether the goods to be stored are food

or non food items or both

Total quantity will be stored in order to calculate total space / area

required

The storage time requirement

The security perimeter of the building and warehouse areas should

provide adequate protections for the building, goods and vehicle also

equipment in the warehouse compound

Site location and access. Warehouse compound should be free of

flooding and access/road to the warehouse should be passed or

suitable for large truck

As a company levels increase, it typically requires more warehousing

space to provide storage for higher level of inventory. When a firm has

multiple products or product groupings, especially if they are diverse, it

needs larger warehouses to maintain at least minimal inventory levels of all

products. In general, greater space requirements are necessary when;

products are large; production lead-time is long; manual materials handling

systems are used; the warehouse contains office, sales or computer

activities; demand is erratic and unpredictable.

Question 3: Who make decisions in choosing a warehouse?

For us, it can be decided by the logistics and coordination with our safety. That is if your company has a safety department.

(I NEED HELP WITH THIS THEORY)

Question 4: Do you consider the warehouse layout and design in

choosing a warehouse?

Layout and design is very important in choosing a warehouse. In

warehouse loss and prevention, it is very critical in choosing a good layout in

the warehouse. But nowadays, warehouse has not become the core

competence of many companies. That’s why most companies no longer build

their own warehouses. So they lease their own warehouse.

The optimal warehouse layout and design for a firm will vary by

the type of product being stored, the company’s financial resources, the

competitive environment and the needs of customers. In addition, the

warehouse manager must consider cost trade-offs between labor equipment,

space and information.

A good warehouse layout can [1] increase output, [2] improve

product flow, [3] reduce costs, [4] improve service to customers and [5]

provide better employee working conditions.

Question 5: Who is in-charge in the warehousing operation?

It depends on the organizational setup of your company. If

centralized or decentralized, regionalized, it depends. In the case of Globe, I

don’t know if I can tell you. Our warehouse now is being run by a third party.

(No theory)

Question # 6: What are the primary functions of warehousing in

your company?

Just like any other warehouse, we have receiving, identification

and sorting, storage, picking, packing, shipment and then recording.

Warehousing has three basic functions: Movement, Storage, and

Information Transfer. Recently, the movement function has been receiving

the most attention as organization focus on improving inventory turns and

speeding orders from manufacturing to final delivery. Fast and efficient

movement of large quantities of raw materials, component parts and finished

goods through the warehouse, coupled with timely and accurate information

about the products being stored, are the goals of every logistics system.

Question # 7: Do you consider warehousing important in the

logistics system of your company?

Yes it’s very important, in day to day operations and as well as

keeping good service to our customers.

Warehousing is an integral part of every logistics system.

Warehousing plays a vital role in providing a desired level of customer

service at the lowest possible total cost. Warehousing activity is an important

link between the producer and the customers. Over the years, warehousing

has developed from a relatively minor facet of a firm’s logistics system to

one its most important functions.