How Can Distribution Reports Help Maintain Warehouse Metrics for Each Other?

When talking about a corporation with warehouses stationed across the United States and worldwide, allocation of inventory products at hand must be reported to keep warehouse product levels balanced. This distribution is needed for checks on all warehouses and is used to figure out warehouse metrics. In the book?The Goal?by Eliyahu Goldratt, warehouse metrics are described as operational expense, throughput, and inventory. I have seen these metrics play a large part in my work with my internship at Corbion, and I will dive further into how these metrics impact warehouses and inventory distribution.

Operational Expense

Operational expense is the expense invested into making more money in the long run. One significant operating expense is trucking. Trucks and truck drivers are staples for making certain products flow from each warehouse and eventually generate more revenues and profits from selling products in a specific location. Upon looking at how products can get on and off the truck, warehouse workers are another operational expense Corbion cannot avoid. These employees will put the effect on the proper shelving until it is ready to ship out. However, there is a lack of warehouse workers, causing inefficiencies and delays in the supply chain.

Trucks and truck drivers are staples for making certain products flow from each warehouse

Throughput

Throughput is the amount of money that products or services can make with the given services or products a company provides. I currently work in the ingredients branch of Corbion; we make ingredients for companies such as Flowers, Bimbo, and Hostess. We make the products that can be made to order or made in advance (based on the forecasts and the company buying) sold, and we gain the revenues. Products are our only source of income as we do not provide any service for customers. Distributing resources helps Corbion with forecasts in the throughput category. Once a customer has bought a product multiple times, we can analyze the patterns and make forecasts based on what they will buy. However, our predictions are not always accurate as some customers stop producing certain products thus do not need our ingredients, or customers have less demand for a particular product. It can be tricky, and some of the elements will go to waste if forecasts don’t align with customer needs, given the shelf life for each product is independent of one another in the inventory.

Inventory

Inventory is the amount of money a company has waiting to be sold off. It is crucial to know the ins and outs of the inventory your company produces, as some inventory may expire, and some shelves may need more inventory for future orders. At Corbion, when I am distributing inventory and resources for supply planning, I have to consider the specific lead time of each product with production and transportation. Producing and transport can take up to 8 days combined; my team finds ways around this problem by ordering products 2-3 weeks in advance to avoid upsetting customers. In an article from Inventory Ops, they suggest that optimizing safety stock is preferred so that if there happens to be a late distribution, there is still product on hand.

Cash flow is the driver of any for-profit organization at the end of the day. When breaking down operations into an operational expense, throughput, and inventory, it is more precise as to where money is and how money Is made. Corbion has mastered reporting on operation expenses, throughput, and inventory as my team and surrounding employees continue to teach and show me new methods and procedures.