Warehouse management in the twenty-first century provides manufacturers and distributors with unique avenues for competitive advantage. In the past, warehousing was looked upon as purely an operational business function charged with the task of storing production materials and finished goods. Someone once defined a warehouse as “inventory at zero velocity.” The role of warehousing was to ensure that individual companies possessed sufficient stock and processing capacity to respond to anticipated customer requirements while acting as a buffer guarding against the “bullwhip effect” produced by uncertainties in supply and demand characteristic of linear supply chains. The operating philosophy was to search for the appropriate trade-offs between warehouse costs on the one hand and customer serviceability targets on the other.
David Frederick Ross