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On receipt of an order, a regional depot would ship those high-sales-volume items in its stock by surface methods to its dealer. These items were packed immediately for next-morning shipment by air in containers destined for each regional depot. However, it is possible to achieve a required service level for low-volume critical parts using high-speed communication and transportation methods instead of a large number of market-oriented inventories. An alternative is to concentrate all available stocks of slow-moving items at a single location. This requires only one reserve stock for unusually large customer demands and offers greater control over a greatly reduced inventory.
- Government regulation, the health of the nation’s transportation system, energy restrictions, and technological developments all represent important considerations in the formulation of a business strategy.
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Rapid corporate growth conceals many blemishes of poor decision making and operating inefficiencies. And while individual organizations will continue to wax and wane in the future, in general there will be fewer growth opportunities on which to rely in a stable population increasingly concerned about its consumption rates. This will lead to a shift from emphasis on growth per se to what might be called the quality of earnings, obtained through the prudent http://www.logisticsinc.com/ control of costs required to serve relatively slow-growing markets and sales bases. Logistical considerations will weigh heavily in programs designed to improve the quality of earnings. Answers may lead to alterations in buying and stocking policies as well as in warehouse and store location. For traders and manufacturers alike, service goals will influence inventory levels and locations as well as transport and customer order processing methods employed.
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