Warehousing is a big issue for a Logistics Manager (SCM can be assimilated to Logistics Manager). In my experience of SCM of Spare Parts in Iveco (trucks) this issue has been analyzed and dealt with the perspective of the Clients. If the Clients need a response time of some hours you need to establish some distribution/warehousing points/spaces in the territory, integrating the transport means and delivery performances with the whole supply chain response time, including the supplier performances and the desired stock investments. You need a modeling of the service level. We used the outcomes of a System dynamics (Forrester model) to decide what to do. Analyzing the problem in a long term perspective I think we should take into accounts some weak signals of change we are perceiving today. There are at least two trends you can foresee; the first is the "inverse manufacturing" which provides a better management of recycling/reuse of products and a new strategy for plants; the second is the "maker" or 3D printing (something more complex but close) which is allowing a local production of parts without storing the finished products but only the raw material.

I stop her, I do not want to be boring ! Bye.

Keeping products in warehouses costs money. The best system is to build the supply chain with fast replenishment from the warehouse to the store or customer. In the fashion business it is crusial to minimize the inventory much because fashion is fresh products that must be sold quickly, otherwise there is risk that products become out of fashion and un-sold, or sold to reduced price. Therefore, it is important to strive for a high stock-turn rate. This is working today in some fashion companies but not everyone is good at this.

Adam, I disagree on the assumption that, by definition, to eliminate warehouses is the SCM best practice. There is not such thing as ONE SCM best practice, there are different SCM best practices that fit different SC types.

One thing is true however, the global trend is towards:

- a reduction of the number of distribution levels, and the degree of parallelism found at each level, or in other terms we are progressively switching from more decentralized to more centralized SC

- the shift from direct ownership of the distribution network to (just) the control of the distribution process

Yet, the choice should favour the number of levels and degree of parallelism that fits customer requirements while minimizing costs, whatever number of warehouses it requires.

Dear Marco, I agreed with your assessments on parallelism that fits the customers requirements and thus minimizing the costs reflecting the number of warehouses required in SCM practices. However, to have such global trends as it decentralized the operations from centralizing the distributions of materials in SCM thus create lot of problems and inefficiency involved as to create the human capital management (HCM) in adjusting such process. It may not be actualize to the maximum. I may agree if the case of manufacturing productions outputs are amounting to small quantities. It may justify to that requirements. But having a massive production output may cause lot of problems and inefficiencies in the SCM operations process linking to the global needs. They may produce more and more as a sign of good productivity but it could or may create bigger problems for SCM and warehousing practitioners. I think this is the main issue for SCM to look into. Arguing that warehousing is not prominent role for such SCM activities may tantamount to bigger gap and problems. One of the best examples are companies practicing contract manufacturing globally as producing a good inventory audit results is difficult produce.

Warehousing is needed both in theory and practice. Warehousing acts as a buffer by which customer demand and production volumes can be synchronized. Warehousing also helps in decoupling production and supply .

Many supply chains strive to shorten the time between a customer’s order and the actual delivery of the ordered goods, i.e. the response time. However, a shorter response time may induce a higher volatility in goods flows. Despite the challenges and trends, warehousing still revolves around the same core activities: receive, pick, pack and ship, and elimination of Warehouse is out of question, however the pipe line inventories has an upper edge to warehousing.

I agree with sh S.G. Deshmukh. warehousing is definitely a cushion in supply & demand. Many items are available/ produced in a particular time/ season  like agri crops but required by consumers through out the year, this function requires buffer stocking through warehouses. It however should be done by  having least inventory to minimize cost.

i do agree with Hermann Gruenwald.