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A critical summary of the paper - Integrating the Warehousing and Transportation Functions of the Supply Chain.
The old operational models in the order-fulfillment business, i.e., discreet, separated modules along the supply chain – separate operations of order management, warehouse management, and transportation management – are rapidly becoming obsolete given the communication and information management systems available due to digital communications, particularly the Internet. Excess inventory, sluggish response times to orders, inflexibility in responding to variances in customer demand or outside supply of product, are all pitfalls which can now be avoided and significant cost savings enjoyed through an integration of these modules/processes.
The paper advocates a new model: a fully integrated process along the supply chain, a comprehensive combination of -- and communication between -- order management, warehouse management, and transportation management. The paper proposes a ‘virtual warehouse’ (VW), in which processes at every stage in the supply chain are tracked and managed in real time, using sophisticated computer algorithms to track the status of any element in the process – the customer’s order in its various components, the company’s workers, the trucks or planes used to deliver supplies to the warehouse or deliver orders from the warehouse to the customer, the amount of inventory on hand at any given point, etc. The status, quantity, and efficiency of any or all of the above components can be both monitored and adjusted in real-time using the VW model.
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