Some supply chain management professionals take the warehouse for granted. According to Materials Handling World contributor Gideon Hillman, this is a key mistake. He compared the warehouse to the heart in a body, noting that it is essentially a pump, taking in goods at different stages of their life cycles and distributing them to other links on the chain.
The main faults that Hillman has observed in warehouses center on a lack of priority. Company officials in a hurry to cut budget put the warehouse in line for reduction, leading to a systematic weakness. He stated that some firms tell him they have placed money in every other area but intentionally have overlooked their storage facilities.
Lack of warehouse funding can lead to slowdowns. Hillman noted that one of the leading signs of a poorly-managed, underfunded warehouse is a lack of warehouse management systems and dearth of accepted procedures. He supported the idea that warehouse professionals should make sure the rest of the company’s operations are visible and they are part of the overarching plan.
The poorly operated facilities Hillman mentioned were largely overstuffed with product. This problem could become worse if companies do not change course. According to the National Retail Federation, imports for U.S. companies were set to rise 1.6 percent in July 2012, compared to the same month in 2011.