Question

Describe how the warehouse can impact total cost and customer perception of a brand with an example.

Answer 1

The warehouse can impact total cost and customer perception of a brand with an example.

The role of warehousing has become very important over the last few years. The role of the warehouse has changed from maintaining the storage of material and products to supporting economies of purchasing, production, and transportation. This includes light manufacturing and facilitates time-based supply chain strategies.

The warehouse is contributing to the overall total cost of managing a supply chain. It acts as a tradeoff between warehousing costs and services to that of other important functions of the firm which must be evaluated. It is when warehousing contributes to a reduction in cost, improves services, flexibility and responsiveness that warehousing will become valuable to the organization and the supply chain.

Taking the example of an e-commerce business like Amazon. Warehousing has taken a different dimension. Amazon has 75 fulfillment and 25 sortation centers across North America which lease and employs 125,000 full time hourly employs. They promise tens of millions of customers and serve 100 million products within 2 days of the order being received. This improves the brand image as a reliable and efficient brand which serves the customers. Customers find the company dependable.

Warehousing is providing value by:

• Storing products to fulfill customer’s demands and protect against uncertainties in demand and the lead time.
• The customers get a wide range of products
• Achieves low total cost and improvement in lead-time by consolidating multiple orders.
• Performing light manufacturing, assembly and kitting

We can conclude that frontline warehousing is the final customer service defense. It will ensure product accuracy, quantity, the timing of shipment and delivery. It also ensures the accuracy of documentation and overall product condition. All these factors impact the total cost and total perception of the brand.