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Distribution, Transfer Centers, and Warehousing Case Study

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Updated: Jun 23rd, 2020


The sustainability of many businesses depends on their ability to ensure effective distribution of their goods to sales outlets and clients. In turn, warehouses and transfer centers play a critical role in the movement of goods across the supply chain. Overall, they can be regarded as critical points in the logistics network. They are critical for the temporary storage of goods (Glessner & Moller, 2011, p. 65). More importantly, they are important for the flow and timely delivery of products (Glessner & Moller, 2011, p. 65). This is one of the issues that should be taken into account. Nevertheless, the management of these facilities is often accompanied by several important difficulties such as the slow picking of goods and stock discrepancies that can make the distribution of goods much more expensive and time-consuming. This problem necessitates the transformation of many practices used by businesses. In particular, supply chain managers are supposed to optimize the use of existing resources. These are the main details that should be discussed in greater detail.


It should be mentioned that in many cases, manufacturers and distributing companies have to spend an excessive amount of time on the location of products that has to be picked. Additionally, workers can occasionally pick the wrong items. This issue is particularly relevant to those situations when the picking order includes a great number of items. This problem occurs provided that the space of a warehouse or a transfer center is poorly organized (Seiler, 2012). Moreover, this difficulty can be attributed to the lack of an effective tracking system that can identify the place in which a particular item is stored. The short-term consequences of this problem include increased labor costs and significant delays. As a rule, the operational expenses of companies increase significantly. Thus, it is important to examine various implications of this issue.

Significance of the problem

In order to understand the significance of this problem, one should mention that the price of a product partly reflects the cost of distribution, while warehouses and distribution centers can be viewed as the central components of the distribution system. In turn, the issues that have been identified can eventually make many products less affordable and undermine the ability of a company to withstand price competition and retain its clients (Thompkins & Smith, 1998). This increase in prices can be explained by the growing labor costs. Moreover, delays and increased labor costs can also threaten the economic performance of many businesses. The effects of this problem can manifest themselves in the long term (Glessner & Moller, 2011). As it has been noted before, a company may lose its competitive position. Furthermore, this issue can be relevant to various stakeholders such as buyers, employees, and stockholders. Thus, it is possible to say that poor management of warehouses and transfer centers can profoundly affect the distribution system. This is why one should not overlook the dangers of slow picking and stock discrepancies.

Development of alternate action

It is possible to adopt several techniques that be used to address this problem. For instance, one should mention that the most required items can be located at the center of the warehouse. In this way, one can reduce the amount of time which is necessary to locate a particular item. Additionally, the key principle is that slow-moving objects should be placed in the most convenient locations (Seiler, 2012, p. 24).To a great extent, this approach can be beneficial because it can reduce the amount of travelling time (Emett, 2011). Nevertheless, this approach may not be fully effective at the time when it is necessary to pick a great number of different items as quickly as possible. Moreover, it is possible to consider the use of automated storage and retrieval system or ASRS (Hinkelman, 2009). This technology reduces the labor costs of a business and ensures quick retrieval of goods (Hinkelman, 2009). Nevertheless, this solution requires considerable investment, and some of the businesses may not afford these technologies. Furthermore, this approach requires considerable changes in the layout of warehouses and transfer centers (Emett, 2011). However, the process of distribution can be significantly disrupted. This is one of the pitfalls that should be avoided by business administrators.


On the whole, it is possible to provide several recommendations that can benefit companies operating warehouses and transfer centers. Provided that this organization has sufficient resources, the management can invest capital in the procurement of ASRS system. In the long term, this investment can be fully justified. Nevertheless, it is possible to identify to apply the so-called pick-to-light technologies (Emett, 2011). The main element of this technology is that the locations, in which certain items are stored, are lit; therefore, an employee can quickly find them. This is one of the advantages that should be considered. These technologies can speed up the retrieval of goods. Moreover, it is less expensive. Overall, the exact solution may depend on the availability of financial resources and time constraints. These are the main arguments that can be put forward.

Reference List

Emett, S. (2011). Excellence in Warehouse Management: How to Minimize Costs and Maximize Value. New York, NY: John Wiley & Sons.

Glessner, H., & Moller, K. (2011). Case Studies in Logistics. New York, NY: Springer Science & Business Media.

Hinkelman, E. (2011). Glossary of International Trade. New York, NY: World Trade Press.

Seiler, T. (2012). Operative Transportation Planning: Solutions in Consumer Goods Supply Chains. New York, NY: Springer Science & Business Media.

Thompkins, J., & Smith, J. (1998). The Warehouse Management Handbook. Boston, MA: Tompkins Press.

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