We’ve learnt from chapter 4 talking about how important it is for procurement, now we need to know the relationship between warehouse management and the effects of the business making the wrong procurement decision.
A running business requires purchase, produce, warehouse (storage), sales and marketing, research and development, finance and accounting, human resource, and information system. With that being said, a functioning warehouse plays an important role to every business.
When the purchasing department places an orders for goods and the order is misplaced, it will result in erroneous deliveries and shortage of stock. However, an effective warehouse is the key to a successful business, because a well-managed warehouse may be the company’s largest expense and largest asset.
What will happen to a business if any of below points break down:
- Inaccurate receipts and purchase orders
- Lack of communication between employees
- Lack of cooperation between departments
- Time management
- Warehouse space and organization
To prevent this from happening, ensure accurate products coming in and out, keep reliable stock records, and create an open environment for employees to communicate; these are the various ways by virtue of which the business will run smoothly.