Optimize Warehouse Operations with Strategic Product Flow | FORTNA

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Logistik optimieren mit strategischem Warenstrom

Ihre Logistik stellt Sie immer wieder vor Herausforderungen? Erfahren Sie, wie Sie durch die Optimierung des Warenflusses die Produktivität, die Effizienz und das Tempo Ihrer Auftragsabwicklung steigern können. Lassen Sie sich inspirieren von verschiedenen Strategien zur Steuerung des Warenstroms: Cross-Docking, Direct-to-Customer und Hub-and-Spoke-Modelle.

von Dan Avila

Many of today’s supply chains are global, with products manufactured or purchased overseas or domestically. There are many ways products can flow in a supply chain: from their source to consumption or use by the end user.

For example, large products manufactured overseas, such as barbecues or patio furniture, will flow differently than small cube items such as nuts, bolts and other small parts produced locally. Taking into consideration the unique characteristics of products when designing a supply chain can lead to optimized speed, flexibility and lower costs throughout the supply chain.

Visual representation of global shipping and logistics network with cardboard boxes connected by glowing lines on a world map

What is product flow?

Product flow in the warehouse is how inbound products from either an internal or external source enter a distribution network and how they are transported, processed, stored, fulfilled, and delivered to the end customer. This can also include any returns or reverse logistics that reenter the product back into the network.

When considering the design of a supply chain network, it is critical to create an optimized model based on the unique characteristics of your products, which can include:

  • Product dimensions and weight
  • Location of the sourced products (local or international)
  • Sales velocity: fast, slow or moderate movers
  • Product seasonality and promotion cycles
  • Dollar value of the product
  • Historic ordering cycles

Types of product flow

When designing a supply chain, several unique product flows should be considered. Here are several of the common product flows.

 

Direct import center

Many large retailers who procure products overseas tend to use import centers near the port of entry into the United States. The purpose of an import center is to consolidate and sometimes hold shipments from a number of overseas factories and consolidate shipments to regional distribution centers or direct to stores if there is enough volume going directly to a store. A direct import center can also ship direct to consumers if it is equipped to support direct to consumer shipments and can ship direct to a retail store bypassing a regional distribution center.

 

Mixing center

A mixing center is typically used domestically and is common in the food and beverage space. A mixing center consolidates products manufactured by a number of disparate manufacturers in a supply chain and could include internally manufactured products as well as products outsourced to a co-manufacturer. Consolidating into a mixing center allows for consolidated outbound shipments to customers, especially grocery chains and big-box retailers.

 

Hub and spoke

The hub and spoke model for a supply chain works well when there are many regional, customer-facing distribution centers, commonly referred to as branches or spokes, and there is a very high SKU count in the network. It is very costly to store all slow and some medium-moving SKUs in each of the spokes. A common strategy to reduce cost and warehouse space across the network is to deploy a consolidated warehouse, also referred to as a hub, to consolidate and store slow and medium-moving items in a hub and replenish the spokes when demand for these items exists. The real challenge in creating a hub and spoke network is understanding the velocity and variability in demand each SKU has by location. Many automotive, industrial and electronics distributors can benefit from a hub and spoke network.

 

Cross-docking

Cross-docking is the practice of bypassing product storage by unloading them from inbound trucks and loading them onto outbound trucks with little time within a facility. This process is optimal for perishable products that are prepackaged, have a high velocity, and are perishable.

FORTNA unterstützt Sie

Not all products are the same. Recognizing the need for multiple product flows into a supply chain is critical to optimizing your supply chain network. The product flows discussed in this blog are not the only flows in supply chains; by partnering with FORTNA to evaluate your unique supply chain network, we can determine the most beneficial ways to flow your products from source to end user.

Published/Updated 10/7/24

Über den Autor

Headshot of Dan Avila, FORTNA Sales Director for Distribution and Fulfillment

Dan Avila

Sales Director, Distribution and Fulfillment

Dan has over 30 years of industry experience in supply chain consulting and sales. His varied background in sales and sales management includes large-scale material handling automation, WMS (warehouse management system), WES (warehouse execution system), WCS (warehouse control system), and other products and services.