Taking advantage of independent warehouse providers

Taking advantage of independent warehouse providers

Sudibyo M. Wiradji
Contributor
Jakarta

Warehousing can not be separated from the operation of a
manufacturing company. This is why many industrial estates have
provided warehousing facilities for their tenants.

In addition to inhouse warehouse facilities provided by an
industrial estate, tenants or other companies operating outside
the estate could also benefit from professionals to manage their
distribution and supply activities.

Major warehouse providers generally use more advanced
technology in their warehouse management such as through the
implementation of the Internet enabled warehouse management
system (WMS). The use of advanced technology such as Barcoding,
ASRS (Automatic Store and Retrieval System), Cross-docking,
Warehouse Management System, Vendor Managed Inventory and
Efficient Consumer Response (ECR) are also on the increase.

Several warehouse service providers such as RPX warehouse,
DHL-run warehouse, TNT-run warehouse and PT ABX Logistics
Indonesia-run warehouse are already familiar with the WMS system
and several others are on the way. RPX Warehouse handles
warehouse services for Federal Express (FedEx).

"We are currently implementing a warehouse management system
which is fully Internet enabled. This will enable our staff and
our customers to view and transact in the system anywhere with
Internet access," said PT ABX Logistics Indonesia's General
Manager Saut Simanjuntak.

DHL's Commercial Technical Advisor John Benshop said that DHL
is constantly researching and enhancing the use of information
technology (IT) in warehousing management.

There are many aspects included in warehousing from simple
storage to complex inventory control and supply chain management.
This can include a "Virtual Warehouse" system which enables users
to access stock levels and complete orders from anywhere in the
world even to rerouting shipments.

RPX Group's CEO Hasha E. Joesoep said that efforts are now
underway to provide RPX Warehouse with modern material-handling
equipments including shelving, pallet racking, work benches,
warehouse accessories and electronic/diesel forklift, storage
system (racking and shelving) and the supporting IT system (WMS)

Indonesia's warehouse providers that have adopted WMS remain
small or about 30 percent. But the awareness of the need to adopt
it has grown.

The warehousing management activities include the receipt of
goods, quality checks on goods, storage of goods in a suitable
environment, inventory counts, retrieval and consolidation for
customer orders and labeling and repacking for transporting.

Security is also a major concern for the warehouse providers.
"We are responsible for the safe storage and delivery of our
clients' goods. We provide a dedicated secure area and access
control along with 24-hour, 7-day-a-week physical security and
closed circuit TV," John Benshop said.

Saut said that PT ABX Logistics Indonesia placed inventory
accuracy as its utmost priority. "We are fully accountable for
the goods we store for our customers and we will do our best to
ensure safe-keeping. A good warehouse management system is also
required so that goods can be located quickly and inventory
reports provided to the customers promptly if required," he
added.

For TNT, the main aspects in managing warehouse are accuracy,
speed, cost-effectiveness and reliability. "With high accuracy of
records and documentation, TNT can improve the speed of orders
and avoid stock obsolesence.

"In every process of order fulfillment, from receiving, put-
away, picking to dispatch, the speed will shorten the time to
convert orders into cash, which, in turn, will improve a
company's cash flow. Sometimes high speed means high cost and to
minimize cost, every process of order fulfillment must be lean
and minimize non-value added activities. And, last but not least,
all must be consistent or reliable," said TNT's Marketing Service
Manager Safitri Dmayanti.

Currently, TNT manages 110,000 square meters of warehouse
space with 200 trucks moving out per day.

In the past decade, almost all multinational companies have
taken advantage of using the warehouse service provided by
logistics providers or commonly known as 'Third Party Logistics
Provider' (3rd PLP) when they are engaged in production, import
and export activities. Dozens of logistics providers can be found
in the Tanjung Priok sea port in Central Jakarta, Tanjung Priok
in East Java and the Soekarno Hatta Airport in North Jakarta.

Producers or manufacturers spend up to 3.5 percent of the
total value of products on warehouse services.

Before being transported to distribution points like
hypermarkets, supermarkets, shops or traditional shops locally
known as warung, the finished products should first be stored in
a warehouse, depending on the nature of the products. For goods
that easily decay like food or medicine, they should be stored in
a refrigerated warehouse with cool temperature or a cold storage.

Only advanced industries have equipped themselves with their
own warehouse. For cost considerations, many companies outsource
their warehousing activities to professional companies.

According to Hasha E. Joesoep, services provided by
professional warehouses operators include inventory control and
management, order fulfillment and processing, packaging and
crating services and integrated logistics call center as a single
contact point.