With costs and competition rising faster than ever, only businesses that find new ways to improve and increase value to both their customers and shareholders will survive let only thrive in today’s market. Only certain activities within a business represent opportunities for adding value to the product or service the business provides. In general, these activities are profit-generators that can be distinguished from the overhead and support functions of commercial/wholesale distributors web-based retailers and company warehouses.
Value added functions often relate the specifics of a particular business. The following are some value-adding functions that are common to most business and should be familiar to anyone who depends on their warehouse as a critical part of their operation:
- Kitting Services
- Marketing and sales
- Production/operations
- Inbound logistics
- Outbound processes
Warehouses are generally seen as cost-centers to a business and rarely are considered as an area for profit creation. Yet some businesses have discovered ways to turn their warehouse into a significant competitive advantage. Of the value-adding functions listed above, inbound/outbound processes relate directly to wholesale distributors or distribution centers. In addition the quality of these processes along with storing, delivering and moving inventoried products can impact sales, production and services in a positive or negative manner. In my next post I will discuss warehousing practices in the value chain and how a warehouse management system plays a significant role in creating revenue inside the warehouse.
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