The role of warehousing in logistics cost management

First, the position of warehousing management in logistics

In a sense, warehousing management occupies a core position in logistics management. From the history of logistics development, we can see that the research of logistics began with solving the "bullwhip effect", that is, in the process of multi-link circulation, because there are errors in forecasting the demand of each link, with the increase of circulation links, the errors are amplified, and the inventory deviates from the actual final demand more and more, which leads to the increase of storage cost and market risk. The way to solve this problem is to start with the study of reasonable safety inventory, and end with the change of technology and the establishment of centralized distribution center, so as to change the production mode, implement order production, change static inventory management into dynamic JIT distribution, and achieve the purpose of reducing inventory quantity and cycle. In this process, although warehouses are becoming more and more concentrated, the service scope covered by each warehouse is getting bigger and bigger, the goods handled by warehouses are getting more and more, and the operation is getting more and more complicated, but the storage cycle is getting shorter and shorter, and the trend of decreasing costs has not changed. According to the statistics of developed countries, the development history of modern logistics is a history in which the proportion of inventory cost in total logistics cost is gradually decreasing.

From many microscopic cases, warehousing management has become the core link of supply chain management. This is because warehousing always appears at the junction of logistics links, such as between purchasing and production, between primary processing and finishing of production, between production and sales, between wholesale and retail, between different modes of transportation and so on. Warehousing is the manifestation of the imbalance in all aspects of logistics, and warehousing is also a means to solve this imbalance. Warehousing links concentrate all the contradictions in the integration of upstream and downstream processes, and warehousing management is to realize the integration of logistics processes. If the position of warehouse management in logistics is described in the language of operational research, it can be said that under the condition of constrained transportation conditions, the optimal inventory (including layout) scheme is sought as a control means to achieve the goal of the lowest total cost of logistics. In many specific cases, the integration and optimization of logistics actually comes down to the scheme design and operation control of warehousing.

It must be explained here that the biggest difference between traditional logistics and modern logistics is also reflected in the inventory link. Based on the business model of charging storage fees, the traditional warehousing industry hopes that its warehouses will always be full, which runs counter to the purpose of logistics. Modern logistics takes it as its responsibility to integrate processes and coordinate upstream and downstream, and the less static inventory, the better. Its business model is also based on the evaluation of the total cost of logistics. Because these two kinds of warehouse management have essential differences in business models, it is difficult to distinguish them in specific operations such as warehousing, warehousing, sorting and tally, so we must pay attention to their similarities and differences when analyzing and studying, and these similarities and differences will also be reflected in the structure of the information system.

Second, the main content of warehouse management

The content of warehousing management should include three parts: layout design of warehousing system, optimal inventory control and warehousing operation. This is a three-level problem, which is interrelated.

Warehouse system layout is the top-level design and the core of supply chain design. It is through the layout design of the hub that a complex and chaotic logistics system is transformed into a model of "trunk transportation+regional distribution", and the hub is a distribution center based on warehouses. In the design of the corresponding information system, it shows the mode of "joint database management", which is divided into three categories: centralized, distributed and hybrid, among which the selection and design of distribution center is the key to the whole system layout. This part of the content is usually not included in WMS, but its adaptability and universality to layout changes will also become an important basis for customers to choose WMS.

The optimal control part of inventory is to determine the business model of the warehouse, that is, to determine the management objectives and management model of the warehouse (according to the requirements of the upper design). If it is the implementation link and cost center in the supply chain, it is based on service quality and operating cost, and pursues reasonable inventory or even zero inventory; If it is an independent accounting profit center, it is a completely different goal and management model. In addition to service quality and operating costs, we are more concerned about profit accounting. Therefore, billing system and customer relationship management have become extremely important components, because marketing strategies and tactics have been solidified in the billing system.

The operation of warehousing operation is the most basic part, and it is also the most important part of all WMS. Because of this, the information part of warehousing operation has become a symbol that WMS is different from other management software such as invoicing and ERP. This part of the content should be implemented as a workflow according to the control target and management mode determined by the previous layer, and it should be connected with the automatic control system of many special storage devices, so it is the most complicated part in technology. The biggest gap between domestic WMS and foreign advanced storage software may be here, and the market price will differ by dozens or even hundreds of times, which is also the truth.

Third, the application of WMS in China

Warehouse Management System (WMS) is a concrete form of warehouse management informatization, and its application in China is still in its infancy. At present, there is a dual structure in China's market: the high-end market represented by multinational companies or a few domestic advanced enterprises has a high proportion of WMS applications, and the system is also concentrated in mainstream brands that are basically mature abroad; The low-end market represented by domestic enterprises mainly applies WMS products developed in China. Based on the excellent cases of logistics informatization collected by China Federation of Logistics and Purchasing, this paper analyzes the general situation of WMS in domestic enterprises from the perspective of application.

The first category is the application system based on typical distribution center business, which can be seen in sales logistics, such as the distribution center of chain supermarkets, and also in supply logistics, such as the spare parts distribution center of production enterprises. The modern logistics center of Beijing Pharmaceutical Co., Ltd. is such a typical example. The goal of the system is to implement the national drug logistics management control standard GSP, optimize the process and improve efficiency. The system functions include purchasing management, inventory management, order management, picking, acceptance, distribution, RF terminal management, basic information management of goods and cargo spaces and other functional modules; Through networking and digitalization, the level of library work control and task arrangement can be improved. The system has shortened the delivery time by 50%, and the order processing capacity has more than doubled, which has achieved remarkable social benefits and become a model of medical logistics. This system is mainly used for supply chain management in manufacturing or distribution industry, and it is also the most common type of WMS.

The second type is a system with the main goal of warehouse technology integration, which solves the integration and optimization problems between information systems of various automation equipment. The production logistics information system of WISCO Second Hot Rolling Plant belongs to this category, which mainly solves the problem of coordinated operation among raw material warehouse (billet), semi-finished product warehouse (rough rolling plate) and finished product warehouse (finish rolling plate), otherwise it will not keep continuous operation, not only emptying productivity, but also wasting energy. The difficulty of the system lies in the seamless connection between the logistics system and the rolling line automation equipment system, which makes the inventory become the flow link of the production line and the production line become an integral part of the inventory operation. All kinds of special equipment have their own information systems. WMS should integrate not only the equipment system, but also the process system and the wider enterprise information system. The process involved in this kind of system is relatively standardized and specialized, which appears in large-scale ERP systems and becomes an important part.

The third category is the application system that focuses on the management decision of the warehousing industry. Its notable feature is that it has a very flexible billing system, an accurate and timely accounting system and a fully functional customer management system, which provides decision support information for the warehousing industry. Runfa Warehouse Management System of China Resources Logistics Co., Ltd. is such a case. This kind of system is mostly used in some enterprises that provide storage services for public warehouses, and its process management and storage operation technology are many, with few features, so the requirements are not high, and it is suitable for providing general services for most customers. After the company adopted a set of WMS suitable for its own characteristics, the labor cost was reduced, the warehouse utilization rate was improved, and the economic benefits were significantly increased.

The above three WMS are simply classified from the perspective of application. The first WMS is more standard, but not all enterprises can use it at once. The second category is often used for the development of internal logistics. When production enterprises or commercial enterprises promote informatization, the logistics part often starts with automation and then integrates with other information systems of the enterprise. The third category is the situation that traditional warehousing enterprises often see in the process of transformation to modern logistics industry. These classifications of WMS reflect the current situation that the logistics demand in China is not very mature, so each has its own position.